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Table Outlining Differences Between Human Resource Management and Personnel Management

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					                       Organization of
                       American States
                                Management Study of the
                     Operations of the General Secretariat

            Part II – Detailed Observations and Options
                                      November 3, 2003

                                        Final Report
Final Report – November 3, 2003
 Table of Contents
Part I – Executive Summary

Part II – Detailed Observations and Options
 Project Overview
 Overall Option Analysis
 Findings, Observations, and Options
        Organizational Structure
        Business Processes
        Human Capital
        Technology

Part III – Appendices
        Appendix A:  Project Timeline
        Appendix B:  Current OAS Organizational Structure
        Appendix C:  Member State Delegation Meetings
        Appendix D:  Organizational Unit Meetings
        Appendix E:  Facilitated Session Participants
        Appendix F:  Current OAS Grade and Salary Structure and Description of United
                                   Nations Compensation System
        Appendix G: OAS Personnel Register (June 2003) with detailed OAS demographics
        Appendix H: OAS Performance Appraisal Form
        Appendix I: Detailed Deloitte Research Findings Related to OAS Human Capital Issues
        Appendix J: Series of Charts Reflecting Deloitte Analyses of OAS Human Capital
                     Issues

                       Final Report – November 3, 2003                                         2
Project Overview - Scope
The management study is an analysis of the General Secretariat's organizational
framework and personnel structure being performed by an independent
organization. The objective of the study is to improve the effectiveness and
control the costs of the General Secretariat. The study is being conducted on
behalf of the Member States and the Permanent Council, who are the primary
clients on the project.

The project includes four elements:

     Assess the current organizational framework
     Analyze the current workloads, personnel structure, and processes
     Identify areas for reallocation of resources
     Identify strategies to increase effectiveness and efficiency, and enable the
      correct composition of staff to meet the organizational mandates in a cost-
      effective and efficient manner

- Draft Report by September 16, 2003 (Originally November 30, 2003)
- Final Report by September 30, 2003 (Originally March 1, 2004)
- Presentations to the General Secretariat, the Permanent Council, and the
  Committee on Administrative Matters from October 2003 – May 2004


                     Final Report – November 3, 2003                                 3
Project Overview - Approach
 Develop a clear understanding of the organization’s mission, mandates, and
  strategic objectives.
 Conduct an activity-based analysis to develop a detailed understanding of
  current business processes, organizational structure, and resource allocations
  (people and expenditures).
 Analyze how the organization is currently using technology to enable its
  processes and resources.
 Develop an optimal "model" for processes, technology, organizational structure,
  and resource allocations to achieve short-term and long-term objectives.
 Compare the current state against the model and prepare a series of findings
  and options for the organization to consider with regard to:
         streamlining business processes
         leveraging technology
         redesigning the organizational structure to improve efficiency
         reallocating employees and other resources -- including outsourcing
          where appropriate
         new creative approaches to reduce/control operating costs (e.g.,
          employee benefit costs)



                   Final Report – November 3, 2003                                  4
Project Overview – Data Collection
•   Met with 14 Member State delegations to discuss project objectives and
    expectations (see Appendix C for participants)
•   Solicited information from more than 400 personnel across the General
    Secretariat:
      – Interviewed 78 senior directors, managers, and staff in 54 organizational
         units (see Appendix D for a list of interviewees)
      – Conducted 12 facilitated sessions with 72 staff and managers in the
         Secretariat for Management (see Appendix E for a list of attendees)
      – Administered an electronic survey of 250 employees in the Technical
         Areas and IACD
      – Administered an electronic survey of 54 Directors and Technical
         Assistants in 28 Offices in the Member States
•   Collected and reviewed a wide range of OAS/GS materials, e.g., financial
    statements, budgets, policies and procedures, staff allocations, etc.
•   Developed database of staffing information and historical financial data
•   Collected comparative benchmark data
•   Collected information and conducted interviews with representatives of the
    United Nations, PAHO, World Bank, IDB, and U.S. Government
•   Attended various Permanent Council and CAAP meetings
•   Attended the 2003 General Assembly
•   Interviewed donor and permanent observer state




                    Final Report – November 3, 2003                                 5
    Overall Option Analysis
                 Introduction
            Summary of Options
        Option Evaluation Framework
            Option Dependencies
        Transition Management Office
Change Management and Communication Strategy




         Final Report – November 3, 2003       6
Introduction
Embarking on a major organizational and operational transformation should be viewed as a journey, not a series
of quick fixes. The options described in this document are not intended to be viewed independently, but rather as
interrelated and building upon one another. Many of the options presented in this document may take months or
even years to implement and realize benefits. This section was developed to promote an overall picture of the
options and their implementation, including:
• A summary description of all 22 options.
• A high-level evaluation of all of the options with regard to cost and benefit, ease of implementation, and time
  to implement.
• A description of the potential linkages and dependencies of the options over the duration of the transition.
• A description of a transition management office to be used to manage and coordinate the overall transition
  effort.
• A listing of change management and communication strategy steps to assist in transitioning the organization
  and implementing changes.




                                           Final Report – November 3, 2003                                          7
Summary of Options: Organizational Structure
Focus Area       Sub Area                    Option                   Description
Organizational   Strategic Planning          Implement Strategic      Implement a strategic planning process to develop a strategic framework
Structure                                    Planning Framework       including strategic objectives and vision. The framework would enable the
                                                                      OAS/GS to become more focused and align resources with objectives as well
                                                                      as provide direction for decision-making.
                 Overall Organizational      Redesign Organization    Design and implement an organization structure that aligns business areas
                 Structure                   Structure                performing similar functions. With the creation of a more streamlined
                                                                      organization, the GS could realize a reduction in duplicative activities,
                                                                      increased efficiencies, and better alignment with strategic objectives.
                 Chief Operating Officer     Establish Chief          Institute an executive-level COO to coordinate all of the activities of the GS
                 (COO)                       Operating Officer        and report directly to the Secretary General. The COO would provide
                                             Position                 leadership and facilitate the coordination of activities and resource sharing
                                                                      among units within the GS and not have a formal political role.
                 Offices of the General      Implement Regionalized   Initiate a regionalization strategy for the OGSMS that would centralize field
                 Secretariat in the Member   OGSMS                    office operations, increase effectiveness of the offices, and decrease the level
                 States (OGSMS)                                       of resources required to maintain OAS presence throughout the hemisphere.
                                                                      If a presence is required in a member state without a direct OAS presence,
                                                                      options can be explored for establishing a General Secretariat Office
                                                                      colocated with other multilateral organizations in the country.




                                                    Final Report – November 3, 2003                                                                      8
Summary of Options: Business Processes
 Focus Area   Sub Area              Options               Description
 Business     Budgeting             Implement Results-    Implement a results-based budgeting system to more effectively align resources with
 Processes                          Based Budgeting       the strategic objectives and mandates of the OAS, resulting in a shift in focus from
                                                          inputs and processes to results and outcomes. This process would include specific
                                                          funds.
              Donor Relations and   Implement Donor       Centralize the external fundraising function to coordinate the solicitation, negotiation,
              Administration        Relations Function    administration, and reporting of specific fund projects. Centralization would decrease
                                                          redundancies, increase economies of scale, and improve customer service to the
                                                          donor community.
              Specific Fund         Implement Cost        Implement a cost recovery plan for specific fund projects to recover the full direct
              Administration        Management and        and indirect administrative costs they generate. The current strain on Regular Fund
                                    Recovery Plan         resources to support the growing volume of specific fund projects could be managed
                                                          and reduced.
              Quotas                Adopt Formal Quota    Agree upon a formal quota policy based on a set of quantifiable metrics. As a result,
                                    Assessment Policy     Member State quotas could be determined more consistently.
              Mandate               Implement Strategic   Based on the strategic plan, adopt and implement a mandate development and
              Development and       Mandate Framework     implementation framework that ties mandates directly to the desired results of the
              Implementation                              OAS. Consequently, the mandate tracking process would be more accountable and
                                                          quantifiable.
              Procure-to-Pay        Streamline Procure-   Implement procurement and payment improvements such as Procurement Cards,
                                    to-Pay Process        automatic payments, and electronic fund transfers to gain efficiencies. Doing so
                                                          would allow resources to focus on more strategic initiatives such as strategic sourcing
                                                          and cash management, instead of transaction processing.




                                              Final Report – November 3, 2003                                                                         9
Summary of Options: Human Capital
Focus Area      Sub Area       Options                                   Description
Human Capital   Compensation   Continue to use the United Nations        While salary increases have been unexpectedly high in some
                               compensation system.                      years, the OAS' overall salary levels are comparable and
                                                                         competitive with the Washington market. As market
                                                                         competitiveness is a primary guiding principle for any
                                                                         compensation system, there is no reason to change from the UN
                                                                         system unless salary levels begin to exceed the local market.
                                                                         However, OAS should work closely with the UN to more
                                                                         accurately project future salary and post-adjustment increases for
                                                                         OAS budgeting purposes.
                Compensation   Link staff compensation more to           The current OAS compensation system tends to reward longevity
                               performance than to tenure.               more than performance. Salary increases and step increases are
                                                                         given to employees with little or no linkage to performance
                                                                         appraisal. To the extent possible within the UN system, OAS
                                                                         should link salary increases to staff performance.
                Compensation   Conduct an audit to ensure that OAS       While OAS has used the UN classification system for several
                               post classifications are consistent       years, there appears to be little coordination between OAS and
                               with the UN.                              PAHO (which also uses UN parity) with regard to the
                                                                         classification of comparable positions. An audit of OAS positions
                                                                         with PAHO will ensure that the UN classification standards are
                                                                         being applied appropriately.
                Benefits       OAS should maintain its current           Overall, the OAS should strive to maintain its current benefit
                               benefit levels, but consider options to   levels as they are consistent with the competitive market in the
                               manage future benefit costs.              Washington area. However, there are a number of options noted
                                                                         in our report the OAS should consider to constrain future benefit
                                                                         costs.




                                         Final Report – November 3, 2003                                                                      10
Summary of Options: Human Capital
 Focus Area      Sub Area       Options                                 Description
 Human Capital   Performance    Improve the performance                 Create a performance management system that (1) identifies each
 (Cont.)         Management     management system to use it as a tool   manager’s and employee's most critical job requirements, (2)
                                for strategic management.               links those requirements to the organization's strategic priorities,
                                                                        and (3) holds managers and employees accountable for meeting
                                                                        their requirements and objectives. The completed appraisals
                                                                        should be used as a key factor in evaluating staff for promotion,
                                                                        salary increases, reassignments, and potential disciplinary action.
                                                                        Unsatisfactory performers should be identified, given an
                                                                        opportunity to improve, and removed from the organization if
                                                                        they do not improve to a satisfactory level.

                 Training and   Implement a management training         Effective management is a primary driver of productivity and
                 Development    program.                                organizational success. Many OAS/GS managers and supervisors
                                                                        possess the technical skills needed to perform their duties, but
                                                                        lack training in critical areas of project management, financial
                                                                        management, budgeting, and managing human resources.
                 Training and   Offer targeted training and             OAS/GS currently has very few opportunities available to staff
                 Development    development opportunities to enhance    for developmental assignments and outside training. The
                                staff competencies.                     organization needs to create a systematic program for enhancing
                                                                        staff competencies, including needs assessment, in-house training,
                                                                        internet-based e-learning, university training, and other sources –
                                                                        depending on the nature of the need.
                 Career         Facilitate career advancement.          Explore options to more clearly define career paths and promotion
                 Advancement                                            opportunities for high-performing staff. Career paths will
                                                                        improve the organization’s ability to attract and retain its best
                                                                        performers.
                 Types of       The OAS should continue its current     The current use of term contracts is cost effective and is serving
                 Appointments   practice of using term contract         the OAS’ interests well. The Organization’s interests are served
                                appointments to meet its human          by using multiple appointments, including CPRs, short-term
                                capital needs.                          appointments, and long-term appointments. The decision to phase
                                                                        out Career appointments is appropriate.



                                        Final Report – November 3, 2003                                                                        11
Summary of Options: Technology
 Focus Area   Sub Area                  Options                         Description
 Technology   IT Organization           Reorganize IT Functions         Redesign the IT function to incorporate all technology-related
                                                                        business areas under a Director of IT. In addition, consolidate
                                                                        database and application support of the Oracle system to
                                                                        standardize processes, coordinate and streamline activities, and to
                                                                        focus on increased delivery and customer satisfaction.
              Reporting and Data        Streamline Reporting and Data   Implement procedures to improve the timeliness and accuracy of
              Integrity                 Integrity                       the Oracle reporting process. Better coordination among the
                                                                        stakeholders of report development as well as documented
                                                                        procedures for data reconciliation would improve the quality of
                                                                        reports as well as reduce distrust of the data.
              Automation and Employee   Implement Automation and        Implement Oracle self services and other automation functions to
              Self Services             Employee Self Services          lower costs and increase efficiencies.




                                           Final Report – November 3, 2003                                                                    12
 Option Evaluation Framework
The following option evaluation framework presents high-level ratings of different criteria that can be used for
comparing the options, including:


  • Implementation Cost — This criteria measures the financial impact associated with implementing the option. A full ball ( ) is
    considered ―expensive to implement‖ i.e., a high financial cost, and an empty ball ( ) represents a low financial cost to the
    Organization.
  • Difficulty to Implement — This criteria measures the difficulty to implement the option, defined by a combination of cost,
    effort, and intangible factors, such as political or cultural resistance. A full ball ( ) is considered difficult to implement, and an
    empty ball ( ) is considered relatively easy to implement.
  • Time to Implement — This criteria measures the amount of time required to implement the option. A full ball ( ) is
    considered a year or longer to fully implement, and an empty ball ( ) is considered something that could be implemented
    relatively quickly.



                                          High                     Moderate                    Low


  • Potential Benefit —This criteria indicates the level of potential benefit the OAS could realize by implementing the option.




                                                     Final Report – November 3, 2003                                                         13
Option Evaluation Framework—Organizational Structure



                                              Option                                        Implementation             Difficulty to            Time to                    Potential
                                                                                                 Cost                  Implement               Implement                    Benefit

               Implement Strategic Planning Framework                                                                                                                         High
               Redesign Organization Structure                                                                                                                                High

               Establish Chief Operating Officer Position                                                                                                                  Medium
               Implement Regionalized OGSMS                                                                                                                                   High




• Implementation Cost —This criteria measures the financial impact associated with implementing the option. A full ball ( ) is considered ―expensive to implement‖ i.e., a high financial cost,
  and an empty ball ( ) represents a low financial cost to the Organization.
• Difficulty to Implement—This criteria measures the difficulty to implement the option, defined by a combination of cost, effort, and intangible factors, such as political or cultural resistance. A
  full ball (    ) is considered difficult to implement, and an empty ball ( ) is considered relatively easy to implement.
• Time to Implement—This criteria measures the amount of time required to implement the option. A full ball (         ) is considered a year or longer to fully implement, and an empty ball ( ) is
  considered something that could be implemented relatively quickly.


• Potential Benefit —This criteria indicates the level of potential benefit the OAS could realize by implementing the option.




                                                                          Final Report – November 3, 2003                                                                                                14
Option Evaluation Framework—Business Process


                                             Option                                        Implementation             Difficulty to           Time to                    Potential
                                                                                                Cost                  Implement              Implement                    Benefit

              Implement Results-Based Budgeting                                                                                                                            High
              Implement Donor Relations Function                                                                                                                         Medium

              Implement Cost Management and Recovery Plan                                                                                                                Medium

              Adopt Formal Quota Assessment Policy                                                                                                                       Medium

              Implement Strategic Mandate Framework                                                                                                                        High

              Streamline Procure-to-Pay Process                                                                                                                          Medium




• Implementation Cost —This criteria measures the financial impact associated with implementing the option. A full ball ( ) is considered ―expensive to implement‖ i.e., a high financial cost,
  and an empty ball ( ) represents a low financial cost to the Organization.
• Difficulty to Implement—This criteria measures the difficulty to implement the option, defined by a combination of cost, effort, and intangible factors, such as political or cultural resistance. A
  full ball (    ) is considered difficult to implement, and an empty ball ( ) is considered relatively easy to implement.
• Time to Implement—This criteria measures the amount of time required to implement the option. A full ball (         ) is considered a year or longer to fully implement, and an empty ball ( ) is
  considered something that could be implemented relatively quickly.


• Potential Benefit —This criteria indicates the level of potential benefit the OAS could realize by implementing the option.




                                                                          Final Report – November 3, 2003                                                                                                15
Option Evaluation Framework—Human Capital
                                             Option                                             Implementation             Difficulty to            Time to                      Potential
                                                                                                     Cost                  Implement               Implement                      Benefit

       Continue to use the United Nations compensation system                                                                                                                    Medium
       Link staff compensation more to performance than to tenure                                                                                                                  High
       Conduct an audit to ensure that OAS post classifications are                                                                                                              Medium
       consistent with the UN
       Consider options related to employee benefits                                                                                                                             Medium

       Improve the performance management system to use it as a tool                                                                                                               High
       for strategic management
       Implement a management training program                                                                                                                                     High

       Offer targeted training and development opportunities to enhance                                                                                                            High
       staff competencies
       Facilitate career advancement                                                                                                                                             Medium

       Continue current practice of using term contract appointments to                                                                                                            High
       meet most human capital needs.


• Implementation Cost —This criteria measures the financial impact associated with implementing the option. A full ball ( ) is considered ―expensive to implement‖ i.e., a high financial cost,
  and an empty ball ( ) represents a low financial cost to the Organization.
• Difficulty to Implement—This criteria measures the difficulty to implement the option, defined by a combination of cost, effort, and intangible factors, such as political or cultural resistance. A
  full ball (    ) is considered difficult to implement, and an empty ball ( ) is considered relatively easy to implement.
• Time to Implement—This criteria measures the amount of time required to implement the option. A full ball (         ) is considered a year or longer to fully implement, and an empty ball ( ) is
  considered something that could be implemented relatively quickly.



• Potential Benefit —This criteria indicates the level of potential benefit the OAS could realize by implementing the option.




                                                                          Final Report – November 3, 2003                                                                                                16
Option Evaluation Framework—Information Technology




                                            Option                                       Implementation             Difficulty to            Time to                     Potential
                                                                                              Cost                  Implement               Implement                     Benefit

            Reorganize IT Functions                                                                                                                                        High
            Streamline Reporting and Data Integrity                                                                                                                      Medium
            Implement Automation and Employee Self Services                                                                                                              Medium




• Implementation Cost —This criteria measures the financial impact associated with implementing the option. A full ball ( ) is considered ―expensive to implement‖ i.e., a high financial cost,
  and an empty ball ( ) represents a low financial cost to the Organization.
• Difficulty to Implement—This criteria measures the difficulty to implement the option, defined by a combination of cost, effort, and intangible factors, such as political or cultural resistance. A
  full ball (    ) is considered difficult to implement, and an empty ball ( ) is considered relatively easy to implement.
• Time to Implement—This criteria measures the amount of time required to implement the option. A full ball (         ) is considered a year or longer to fully implement, and an empty ball ( ) is
  considered something that could be implemented relatively quickly.


• Potential Benefit —This criteria indicates the level of potential benefit the OAS could realize by implementing the option.




                                                                          Final Report – November 3, 2003                                                                                                17
Option Dependencies
Description:
While many options can be implemented independently at any time, other options are dependent and/or linked (i.e., it would be
beneficial to implement after or during the implementation of other options). The following flow chart highlights dependencies
with certain options, as well as an estimate on the amount of time to implement.

                                                           Option Dependencies
                              Implement Strategic Planning Framework
                                        Implement Management Training Program
                                       Link Compensation to Performance
                 Explore Options Related to Benefits
           Conduct Audit of UN and OAS Post Classifications
    Continue Using UN Compensation System
    Continue Using Term Contract Appointments
                                                                     Redesign Organization Structure
                                                                                Implement Donor Relations Function
                                                                                    Implement Cost Management and Recovery Plan
                                                                        Improve Performance Management System
                                                                                                               Offer Targeted Training and Development
                                                                              Facilitate Career Advancement
                                                                   Implement Regionalized OGSMS
                                                 Reorganize IT Functions
                                                               Implement Results-Based Budgeting
                                                     Implement Strategic Mandate Framework
                                        Adopt Formal Quota Assessment Policy
                 Establish Chief Operating Officer Position
                     Streamline Procure-to-Pay Process
                       Streamline Reporting and Data Integrity
                         Implement Automation and Employee Self Services
0            6               12             18                24               32              36             42           48            54              60


Timeline (Months)
                                                              Final Report – November 3, 2003                                                                 18
Transition Management Office (TMO)
Description:
To coordinate and manage the changes adopted by the OAS/GS, the Organization could create a Transition Management Office
(TMO). In general, the function of this office would be to serve as a coordination mechanism for all of the projects initiated as a
result of the Management Study. A typical TMO for this type of effort has three to five full-time employees dedicated to
coordinating the change. Responsibilities include periodic and ad hoc communications, coordination of resources, monitoring of
budgets and timelines, provision of best practices and management resource, and other general duties as assigned. The TMO
should report to top management and have an indirect report to the Political Bodies, likely through the CAAP.


Benefits:
• Implementing a TMO would allow the OAS/GS to build, maintain, and improve the project management mechanism to drive
  completion of multiple projects and keep them on schedule and budget.
• A TMO structure supports project managers and implementation teams by providing organization-wide coordination, which enables
  more accurate quality control measures and cohesiveness across all projects and new initiatives.
• A TMO would serve as a central repository for project management expertise, best practices, and knowledge.


                                                                                        CAAP and
                                                                                      Political Bodies



                                              Secretary General/Assistant
                                                                                         TMO
                                              Secretary General/Other GS
                                                                                      TMO Lead
                                                       Executive
                                                                                   TMO Staff (2-4 FTEs)


                                                  General Secretariat
                                                     Operations


                                                              Possible TMO Structure

                                                   Final Report – November 3, 2003                                                    19
Change Management and Communication Strategy
Description:
Change management and communication are integral components of a successful implementation or change to an organization’s
structure, processes, technology, or human capital. Due to the political nature of the OAS, it is of particular importance that the
changes are managed carefully to promote support and commitment and reduce stress. Change management, which is the active
management of a change or transition, is a crucial component of transitional phases that increases understanding, cooperation, and
acceptance by stakeholders.

A communication strategy is an important component of an organizational change management process. Effective and consistent
communication during a transitional period educates all stakeholders on what changes are taking place, why the change is occurring,
and their consequences or outcomes. In the short term, the management study steering committee should play a role in both change
management and communication in order to provide continuity and to keep the Permanent Council and CAAP engaged in the process.

 Critical Steps in Change Management:                                   Critical Steps in Communication Strategy:
 • Demonstrate commitment to change in the Permanent                    • Establish open communication lines and a sense of
   Council by providing resources and direction for                       dedication to work collaboratively toward a common goal
   transition.                                                            between the General Secretariat and the Permanent Council.
 • Establish a detailed rollout plan that specifies the time,           • Establish a communication strategy that makes stakeholders
   resources, and responsibilities of all those involved, and             aware of the advantages, disadvantages, and challenges they
   distribute throughout the Organization.                                will face as a result of the proposed change. Stakeholders
 • Where possible, maintain existing programs or processes                include Permanent Council, Staff Association, Donors, etc.
   in parallel for a period of time to promote a seamless               • Develop framework for communicating to the
   transition.                                                            Organization’s external customers to educate them on the
 • Develop strategy and guidelines for managing the human                 effects the changes will have on their relationship with
   capital effects that result from the changes to job                    OAS.
   classifications, staff location, job title, job description,         • Develop and distribute newsletters during the initial stages
   etc., and suggest methods of maintaining and improving                 of change implementation to demonstrate success and
   morale and motivation.                                                 encourage participation of staff in the new initiative.
 • Develop training and implementation guidelines and
   policies for adoption among business areas.

                                                    Final Report – November 3, 2003                                                      20
Findings, Observations, and
          Options
          Organizational Structure
            Business Processes
              Human Capital
               Technology




     Final Report – November 3, 2003   21
Organizational Structure
 • Implement Strategic Planning Framework
 • Redesign Organization Structure
 • Establish Chief Operating Officer Position
 • Implement Regionalized OGSMS




                                     Final Report – November 3, 2003   22
Organizational Structure: Implement Strategic Planning Framework
Observations:
• The General Secretariat does not have a strategic plan that provides an operational vision for the OAS Charter and mandates.
• Multiple bodies have input into the development of OAS strategic direction and mandates, which the General Secretariat is then
  tasked with implementing. Consequently, the strategic vision and mandates are not significantly coordinated, and have created a
  fragmented strategic message for the General Secretariat.

                                                                                                                     Time     Target
                                        Background                                                    Document      Frame      Area                Focus

• The General Secretariat (GS) does not have a single, formal, organization-wide strategic         OAS Charter-
                                                                                                   Chapter 1:
  planning process that can be used to determine its goals and objectives.                         Nature and                           High level strategic
• Although each program area within the GS is required to develop a mission and                    Purposes         1997      OAS       direction for mandates

  justification statement for budgeting purposes, there is no process to connect these to an       OAS Charter-
                                                                                                   Chapter 2:
                                                                                                                                        High level strategic
                                                                                                                                        direction to drive focus for
  overall strategic vision or to the OAS’ Charter.                                                 Principles       1997      OAS       mandates

• Mandates are developed independently of the GS’s operations, resulting in a disconnect                                                Discussion of influences of
                                                                                                                                        the past decade and areas of
  between the mandates and the ability to execute them. In addition, the GS operates               A New Vision                         focus within major strategic
  without clear information about the priorities of the political bodies.                          of the OAS       1995      OAS       areas

• While several documents provide strategic direction, there are differences among them            Toward the New                       Discussion of influences of
                                                                                                   Millennium:                          the past decade and areas of
  in terms of timeframe and area of coverage that may make strategic objectives and                The Road                             focus within major strategic
                                                                                                   Traveled         1999      OAS       areas
  priorities unclear to the organization (see table).
                                                                                                                                        Discussion of the strategic
                                                                                                                                        initiatives for the
                                                                                                                                        Partnership for
                                            Issues                                                 CIDI-IACD        2002-               Development outlining
                                                                                                   Strategic Plan   2005      IACD      IACD objectives

• Due to the fragmented strategic message, there is no clear organizational vision or              Inter-American
                                                                                                                                        Discussion of democracy
                                                                                                                                        related priorities of the
  direction known by all levels of staff. As a result, there is no prioritized set of objectives   Democratic
                                                                                                   Charter          2001      UPD
                                                                                                                                        Member States that drives
                                                                                                                                        the activities of the UPD
  and resource allocation to corresponding priority areas.
• The lack of strategic planning at OAS leads to a lack of overall accountability, as it is        The above table shows some of the documents that define
                                                                                                   OAS strategy and are currently referred to by the GS staff.
  difficult to determine the level of success a completed mandate has brought to meeting           They were developed during different timeframes and,
  the strategic objectives of the Organization.                                                    although they overlap, they define different focuses, goals,
                                                                                                   objectives, and are not coordinated in any formal process.


                                                        Final Report – November 3, 2003                                                                                23
Organizational Structure: Implement Strategic Planning Framework
 Description:
 Implement a strategic planning framework to help the General Secretariat (GS) better define ―what it is,‖ ―what it does,‖ and ―why
 it does it.‖ The framework should be designed to help the organization become more focused and align resources with core
 competencies (―core competencies‖ are areas in which an organization has a comparative advantage or an inherent capability). In
 addition, the document should leverage and clarify the operational message of existing OAS strategy documents. By coordinating
 multiple OAS strategy documents into a focused GS strategy, a strategic plan serves as the common thread for linking the
 Organization’s overall direction with its activities, budgeting, planning, performance measurement, and accountability. A
 formalized strategic planning process provides a framework to focus energy and allocate appropriate levels of resources to priority
 areas. Criteria that can be used in evaluating organizational areas include:
 • Charter Focus – Assessment of the extent each focus area adheres to one or more of the OAS "essential purposes" as stated in the
    OAS Charter.
 • Mandate Focus – Assessment of the mandate volume currently assigned to each business area as well as over the past five years.
 • Comparative Advantage – Assessment of the extent each area is uniquely positioned to meet its mandates and strategic objectives
    more effectively than other similar organizations operating in the hemisphere.

 Advantages:                                                            Disadvantages:
  Strategic planning allows an organization to adjust its focus        • The strategic planning process can be time consuming
   and resources in response to a changing environment.                   during the initial cycles as the organization adjusts and
  A strategic planning framework could serve as the driving              learns to operate in a more strategic manner.
   force for all GS initiatives and help effectively support the
   monitoring of productivity and accountability.
  A strategic plan could unite the Organization and its
   stakeholders under a shared vision and set of values.
  A strategic plan would serve as a means to limit or
   reallocate resources from functions determined to be non-
   strategic.
  A strategic plan could provide the OAS/GS with the
   flexibility and information needed to respond to operational
   and budgetary changes.

                                                    Final Report – November 3, 2003                                                    24
 Organizational Structure: Implement Strategic Planning Framework
Action Steps for Implementation Plan:
1) Define a representative team of stakeholders consisting of six to twelve members to form a committee that will participate in the formal
   strategic planning session (this should be done by a committee of the Permanent Council such as the Committee on Administrative and
   Budgetary Affairs). Members should include representatives from both the Permanent Council and the General Secretariat, such as
   Member State representatives, General Secretariat Directors, Staff Association representative, and other stakeholders. In addition, the
   Secretary General and Assistant Secretary General should also participate as either full members or, at the very least, sources for guidance.
2) Agree on the process and method to be used for developing the framework.
3) Conduct strategic planning sessions (typically over one to two weeks), to include development of:
     • A mission and vision statement, which describes purpose, business, and values. The vision statement should provide a guideline of
       what the Organization will look like as a result of the strategic planning process.
     • An analysis of the current environment and issues to be addressed by the plan. It is useful to perform a SWOT analysis (Strengths,
       Weaknesses, Opportunities, and Threats) to identify strategic situation and position
     • Core strategies, goals, and objectives to establish an outline of the strategic plan.
4) Develop and distribute the written strategic plan for the Organization to use as a guide for decision making and resource allocation. To
   assist with dissemination and increase awareness, develop and distribute user friendly versions of the strategy, e.g., pocket versions, etc.
5) Educate stakeholders on the components of the strategic plan and communicate the process of how the plan will be used.
6) Monitor and occasionally revisit strategic plan throughout its lifespan, and make adjustments to account for minor changes in the operating
   environment and organizational priorities.
7) Periodically repeat entire strategic planning process to adjust for major changes to the environment and organizational priorities.
  Timeframe for Implementation Plan:
                                                 Implement Strategic Planning Framework
           Appoint Strategic Planning Committee
                  Develop Mission and Vision Statement
                  Perform SWOT Analysis
                    Establish Goals and Strategic Objectives
                                 Develop and Distribute Strategic Plan
                                                         Educate Stakeholders
                                                                 Monitor and Adjust as Necessary
                                                                                                                         Begin Process Again
   0          3              6               9             12             15            18         21     24           27           30
   Timeline (Months)
                                                               Final Report – November 3, 2003                                                 25
Organizational Structure: Implement Strategic Planning Framework
 Implementation Costs
    Direct costs associated with implementing a strategic planning framework include:
       The cost of an outside facilitator to conduct planning sessions.
       Production costs of the strategic plan and supporting materials.
       If interpreters, translators, and other support services are required for the sessions, these costs should also be included.

    Indirect costs associated with implementing a strategic planning framework include:
        The time commitment of the strategic planning committee for the plan’s development.
        Costs that will be incurred as the organization learns to operate in a more strategically focused manner.

   • These costs may be absorbed by the organization and offset by a reduced effort in other areas such as non-strategic
     management meetings and other activities that will hopefully decrease.



                  Barriers                                                               Critical Success Factors
                                                                    The General Secretariat and the Permanent Council must work
Consensus between the political bodies and the GS may                collaboratively on the process. This can be encouraged by
be time consuming to obtain.                                         establishing common goals and values for both entities early in the
                                                                     process, and letting the goals and values drive the process instead of
                                                                     individual politics and opinions.
                                                                    The strategic plan must be revisited and adjusted periodically to
Without dedication and commitment to successful                      evolve with the changing environment of the Organization. It should
adoption of a strategic plan from top leadership down, it            be stressed that revisiting the strategy must be the result of a
is difficult to successfully complete a strategic planning           compelling change in the environment or capabilities of the
initiative.                                                          organization, and not simply to reopen discussion on past decisions.
                                                                    The Organization must be willing to make hard decisions.



                                                     Final Report – November 3, 2003                                                          26
 Organizational Structure: Redesign Organization Structure
Observations:
• The Office of the Secretary General has nineteen direct reporting lines that make it difficult to provide operational direction
  and coordination across the Organization (see chart on following slide).
• The organizational structure is not aligned functionally or by customer, resulting in a fragmented structure that is difficult to
  coordinate and limits collaboration.

                         Background                                                                   Issues

 The General Secretariat (GS) organizational structure has              There is no centralized conduit between General Secretariat
  evolved through the creation of new units and areas of focus            operations and the General Assembly, Permanent Council, and
  over the years.                                                         other political bodies, resulting in a disconnect between actual
 While there is strong political leadership within the General           and desired outcomes.
  Secretariat, there is limited centralized operational leadership.      The lack of cooperation and communication between
 Technical Areas that perform similar functions operate                  autonomous program areas that perform similar or related
  independently, resulting in a lack of ability to coordinate and         activities results in limited sharing of knowledge and best
  increased instances of duplicative activities.                          practices.
 Certain activities, such as project accounting and reporting,          Fragmented organizational areas decrease effectiveness and
  fundraising, and website development, are performed in                  ability to coordinate by limiting specialization, decreasing
  multiple organizational areas with limited coordination.                economies of scale, and increasing duplication of activities.

                                                                                            Public
                     Functional Area:    Policy   Project     Support      Administrative   Affairs       The table shows the major Offices and
                                                                                                          Secretariats of the GS, and some of the
 Office of the Secretary General                                                                          functions they perform. Organizational
 (including Technical Areas)                                                                              areas often perform similar functions.
 Office of the Asst. Secretary General                                                                    Areas performing the function are
                                                                                                          marked with a      . Area(s) performing
 Secretariat for Legal Affairs                                                                            the function who also have primary
                                                                                                          responsibility for the function are marked
 Secretariat for Management
                                                                                                          with a     .
 Secretariat for IACD

                                                       Final Report – November 3, 2003                                                                 27
  Organizational Structure: Current Organizational Structure
  Numbers indicate the
    number of direct
  reporting lines to the
Secretary General, which
     total nineteen.

                                                                           1



                           5                  8                       12
                 2
                                              9                       13
                 3         6
                                              10                      14
                 4         7                  11                      15
                                                          16



                               17                              18          19




                                    Final Report – November 3, 2003             28
Organizational Structure: Redesign Organization Structure
Descriptionu
Design and implement an organizational structure that groups similar functions, increases efficiency, rationalizes overhead, and
aligns the organizational units with the strategic objectives identified by the strategic planning process. The key areas addressed by
the redesign options are the Technical Areas, Support Areas, and Administrative Areas. By grouping the organizational units that
perform similar functions together and rolling them up to an executive office, the Organization could realize a reduction in
duplicative activities as well as an increase in knowledge sharing and collaboration among the units within each organizational area
and across the functional areas. While the organizational structure should reflect the results of the strategic plan, the following
pages present some alternatives to illustrate different approaches the Organization could pursue:

• Option 1: Option 1 reorganizes the current General Secretariat structure, keeping most organizational units largely intact.
• Option 2: Option 2 reorganizes the current General Secretariat structure by realigning most functions into new organization units.

It should be noted that these options are not mutually exclusive, and that Option 1 could be a transitional structure that evolves into
Option 2 or that elements of each could be incorporated into a third hybrid option. What is critical, however, is that the new
structure reflects and is aligned to the strategy of the organization.

  Advantages:                                                             Disadvantages:
   Grouping the Support and Administrative functions                      As a result of a functional instead of a divisional design,
    together could enable the units to focus on their                       Administrative and Support areas would not be closely
    common customers (typically, the other parts of the                     aligned to, or experts in, supporting any one particular
    General Secretariat and the Permanent Council), likely                  Technical Area’s business needs.
    providing an overall increase in customer service.
   By grouping the Technical Areas and the IACD
    functions into larger subject matter areas, economies
    of scale could be gained and the Organization could
    present a stronger service capability to donors in the
    program areas.



                                                    Final Report – November 3, 2003                                                       29
Organizational Structure: Redesign Organization Structure – Option 1




                            Final Report – November 3, 2003            30
Organizational Structure: Redesign Organization Structure – Option 2




                 The technical areas (including IACD) would be staffed by a combination of
                 subject matter experts and project managers, both supported by a staff of
                 generalists that have general skills in both policy and project execution. The
                 structure would encourage collaboration and provide flexibility for peak and down
                 times on projects.

                                      Final Report – November 3, 2003                                31
Organizational Structure: Redesign Organization Structure
Action Steps for Implementation Plan:
1) Develop committee consisting of representatives from stakeholder groups including all major areas of the General Secretariat and
    the political bodies. Keep the political bodies informed of potential changes that may require amendment to the OAS Charter.
2) Based on the results from the strategic planning process, identify impact on the Organization design.
3) Develop inventory of the key areas of the Organization with a description of their functions.
4) Determine the primary activities of the Organization that contribute to the provision of key outputs (e.g., Technical Areas
    delivering mandate-driven projects).
5) Determine the support activities that assist the primary activities as well as each other (e.g., Public Information, Protocol, Library,
    etc.).
6) Determine the administrative activities that assist the primary activities as well as each other (e.g., HR, Financial Services,
    Procurement, etc.).
7) Examine these activities and identify activity linkages, inefficiencies, and areas of improvement in relation to how well they
    support the Organization in achieving its strategic objectives.
8) Design and evaluate Organizational design options.
9) Develop management and personnel structure including levels of hierarchy and spans of control as well as analysis of the
    requirements according to job level.
10) Design and implement an Organizational structure for implementation. Pursue amendments to the OAS Charter as required.


Timeframe for Implementation Plan:
                                            Reorganization of Organization Structure
        Appoint Committee of Stakeholders
                   Identify Strategic Objectives impact on Organization Structure
                           List and Describe Organizational Areas
                                        Determine Primary, Support, and Administrative Activities
                                               Identify Linkages and Inefficiencies
                                                            Design and Evaluate Organizational Design Options
                                                                      Develop Management and Personnel Structure
                                                                                                    Implement and Train Personnel

 0           3            6             9             12            15            18            21            24            27       30
 Timeline (Months)
                                                      Final Report – November 3, 2003                                                        32
  Organizational Structure: Redesign Organization Structure
Implementation Costs

  Direct implementation costs associated with reorganizing the General Secretariat (GS) organization structure include:
     Costs associated with the actual implementation of the desired organization structure, which include human resource costs,
        information technology, etc.
     Costs associated with the development and delivery of training programs for personnel with new job roles and responsibilities.
     Costs associated with the physical reorganization such as personnel relocation, furniture moving, etc.

  The indirect costs associated with reorganizing the GS organization structure include:
     Depending on the ease of transition, the major business areas may experience a period of inefficiency. However, these costs
        could be recovered as the new organization gains efficiencies.




                  Barriers                                                              Critical Success Factors
 The reorganization could have a negative effect on
 employee morale, productivity, and sustained
 commitment to the Organization.                                   A successful strategic planning process that clearly determines the
                                                                    strategy and objectives of the Organization must be completed to
                                                                    serve as a foundation organizational design decisions.

                                                                   All OAS stakeholders should be engaged and used to solicit
                                                                    feedback during the design of the organization structure.
 An unclear migration strategy could lead to resistance
 and lack of understanding from staff.



                                                      Final Report – November 3, 2003                                                     33
   Organizational Structure: Establish Chief Operating Officer Position
Observations:
• There are multiple senior level executives focusing on the internal operations of the GS.




                          Background                                                                  Issues

 The General Secretariat (GS) has strong political leadership in      The Secretary General and Assistant Secretary General are
  the Offices of the Secretary General and Assistant Secretary          focused on political issues and crises, and not day-to-day
  General. Both of these positions tend to focus externally on          operational matters, resulting in a disconnect between the
  political and policy related issues, leaving limited time for         political and operational sides of the organization.
  internal operations of the General Secretariat.                      Operational and management initiatives are diffused among
 There is not a clear operational leader of the organization to        different executives and directors.
  interact with the Secretary General, Assistant Secretary General,    Without an operational senior-level executive, other executives
  and political bodies on issues of organizational resources and        often play the role on a de facto basis, although they lack the
  capability.                                                           authority and resources to succeed in the position.




                                                      Final Report – November 3, 2003                                                     34
Organizational Structure: Establish Chief Operating Officer Position
Description:
Institute an executive-level Chief Operating Officer (COO) position with associated staff to coordinate all of the activities of the
General Secretariat and report directly to the Secretary General. The COO would provide operational focus and leadership to
manage the resources of the entire organization based on overall strategic objectives. The COO should have a negotiated
performance contract to achieve certain goals of the political bodies. The COO role should be insulated from undue political
influence through longer terms and specific removal authority (e.g., a five-year term subject to removal by Permanent Council vote
or failure to meet performance agreement). The COO should receive strategic direction and mandates from the political bodies, but
be given operational and tactical flexibility in achieving those goals. The COO role could be achieved by a new position, or by a
reconfiguring and refocusing the current Assistant Secretary General role (while the current Assistant Secretary General position is
conferred certain operational and administrative functions, the position tends to still focus externally, and internally only in specific
aspects of day-to-day operations).

  Advantages:                                                              Disadvantages:
   A high level executive focused on operations could                      A COO may limit the authority and flexibility of the
    free up the Secretary General and Assistant Secretary                    current executive structure that empowers individual
    General to focus on urgent policy and political                          Secretariats and Departments.
    functions, and give them more flexibility to spend
    time away from GS headquarters working on                               A COO may distance the Secretary General and Assistant
    hemispheric issues and crises, and also more time to                     Secretary General from the day-to-day operations of the
    coordinate political matters within the units.                           GS.
   A COO could encourage coordination of GS efforts
    and resources, and creativity in achieving the
    mandates of the political bodies.
   By insulating the COO, the GS operations could avoid
    excessive political and national influences that can
    distract operations and personnel.
   The first set of priorities of the COO could be the
    implementation of the approved initiatives of this
    study.


                                                    Final Report – November 3, 2003                                                         35
Organizational Structure: Establish Chief Operating Officer Position

Action Steps for Implementation Plan:
1) Develop the institutional structure and role of a COO, including term, appointment procedures, performance agreement, reporting
   lines (upward and downward), and incorporate into the Charter of the General Secretariat.
2) Interview candidate(s) and appoint a COO with the background, skills, and experience to play a leadership role in the organization.
   The first COO should have experience in overseeing organizational transitions and should probably be external to the organization
   to avoid institutional history that might hinder the transition. Eventually, the COO role could be migrated into the Assistant
   Secretary General role, although careful consideration should be given to avoiding the politicizing of the role by electing a COO.
3) Develop and negotiate performance agreement with new COO, including goals, outcomes, outputs, and measures. The initial
   performance agreement should be focused on the objectives of the transition in addition to operational objectives.
4) Monitor the performance of the COO through the Permanent Council and CAAP, and provide feedback and direction balanced with
   flexibility and resources to achieve goals.




Timeframe for Implementation Plan:

                                              Establish Chief Operating Officer Position


                Develop COO Institutional Structure
                              Interview candidates and appoint COO
                                   Develop COO performance agreement

                                        Monitor COO performance

 0          3             6               9            12            15       18           21         24           27           30

 Timeline (Months)



                                                        Final Report – November 3, 2003                                                  36
  Organizational Structure: Establish Chief Operating Officer Position
Implementation Costs
  Direct implementation costs associated with establishing a COO include:
     Salary cost of the COO and an immediate staff (one to two FTEs).

  Indirect costs associated with establishing a COO include:
      Cost of institutionalizing the role of COO (likely time of the Permanent Council, CAAP, Director of Legal Services, and
         Secretariat of Legal Affairs).




                  Barriers                                                             Critical Success Factors

 Undue political influence on the operational role
 of the COO.
                                                                  Strike an appropriate balance between operational flexibility and
                                                                   political direction and oversight. Define this balance clearly in the
 A lack of authority and resources to effectively                  beginning of a COO term and adhere to the terms.
 perform the role of COO.                                         Carefully define the COO position description, qualifications, and
                                                                   appointment process to encourage selecting the appropriate
                                                                   candidate.
 Lack of clarity around the role of the COO.




                                                     Final Report – November 3, 2003                                                       37
    Organizational Structure: Implement Regionalized OGSMS
 Observations:
 • While the Offices of the General Secretariat in the Member States (OGSMS) are generally considered useful by the GS HQ
   operations, they are used inconsistently, have varying levels of capability, and represent a major commitment of resources.

                                          Background
  The three primary purposes of the OGSMS are to:
      Represent the GS in Member States.
      Serve as a liaison between OAS HQ and Member States.
      Provide technical project support and execution.
  In 2002, the budgets of the 28 OGSMS consumed 7.8% of the Regular Fund budget for an
   average of $212,000 per office, approximately 80% of which is for human capital expenses.
  There is no detailed framework outlining the intended interaction between the OGSMS and
   General Secretariat HQ operations.                                                             Graph shows the frequency of interaction with
  Personnel turnover at the OGSMS is limited.                                                    OGSMS of surveyed technical area staff based on the
  Technical areas tend to interact with OGSMS frequently—but not on a day-to-day basis—          74 employees who responded to this question. Over
                                                                                                  50% of respondents interact with OGSMS on at least a
   and generally find interaction useful (see graphs).                                            monthly basis, although less than 10% interact daily.

                                              Issues

 Although one of the stated purposes of the OGSMS is to provide technical support in the field
  for General Secretariat projects, utilization of OGSMS resources is sporadic and technical
  support capacity may not be fully realized.
 Currently, the OGSMS purpose and capabilities are not widely understood and the perception
  of them throughout the technical areas at GS Headquarters varies.
 Currently, there are no metrics used to determine the level of success each OGSMS achieves
  in helping the OAS meet its strategic objectives.                                               Graph shows the perception of OGSMS usefulness of
 As a result of longer terms for OGSMS personnel, the perception is that over time they lose     surveyed technical area staff based on the 72
                                                                                                  employees who responded to this question. Over 70%
  momentum or become linked more to the socio-political culture in the host country than the      of respondents consider the Offices either Useful or
  OAS mission.                                                                                    Very Useful, while only 3% consider them Not Useful.

                                                       Final Report – November 3, 2003                                                                    38
Organizational Structure: Implement Regionalized OGSMS
Description:
Implement a regionalization strategy for the OGSMS to operate in a more centralized fashion in the major OAS geographic regions.
By implementing a regionalization strategy, the OAS could reduce the operating budget of the OGSMS while still meeting their
intended objectives. The proposed structure would establish regional offices throughout the major regions of the hemisphere
including the Caribbean, Central America, and South America. All OAS field operations and supervision would be headquartered in
these regional offices. Under this structure, the regional offices could be rotated on a periodic basis (e.g., a five-year cycle), which
would allow all Member States within each region the possibility of hosting an OGSMS regional office. The Offices should receive
clear direction on the Organization’s expectations of them, and have their performance evaluated against these expectations. In
addition, to maintain a healthy rotation of directors, provisions could be included for term limits of office directors concurrent with
the rotation of offices. If a presence is required in a member state without a direct OAS presence, options can be explored for
establishing a General Secretariat Office collocated with other multilateral organizations in the country.

  Advantages:                                                             Disadvantages:
   Regionalization would allow the OAS to maintain a
                                                                           Due to the large span of control within the regionalized
    presence in the major regions of the Hemisphere and
                                                                            offices, the effectiveness of hands-on project support would
    retain the relationships and cultural understanding
                                                                            require more travel and resource costs.
    developed throughout the years of maintaining
    OGSMS in individual Member States.                                     Due to the fact that the OGSMS represent the ―face‖ of the
   Consolidation of the OGSMS would increase the                           OAS in the Member States, regionalization would decrease
    levels of utilization and sharing of staff and overhead                 the on-site presence of the OAS in countries without
    costs.                                                                  offices.
   Implementing a rotation plan for Office Directors                      The cost of relocating the OGSMS as part of the rotation
    would lead to a fresh cycling of leadership within the                  throughout the region will have to be absorbed every
    OGSMS.                                                                  rotation, and this may also hinder staff continuity in the
   Regionalizing the OGSMS would decrease the volume                       offices.
    of staff and resources required to operate in the field,
    thereby reducing costs.
   By implementing a cyclical rotation of OGSMS within
    each region, all Member States could benefit from
    hosting the OAS regional office within their borders.

                                                    Final Report – November 3, 2003                                                        39
Organizational Structure: Implement Regionalized OGSMS

     2002 Regular Fund Executed (USD 000’s)                           Estimated Future Costs (USD 000’s) for
             for 28 Office Structure                                       6 Regional Office Structure

       Approved Posts                 $4,436                          Approved Posts                 $1,451
       Travel                         $8                              Travel                         $240
       Documents                      $7                              Documents                      $7
       Equipment and Supplies         $237                            Equipment and Supplies         $200
       Building Mgt/Maintenance       $607                            Building Mgt/Maintenance       $450
       Performance Contracts          $18                             Performance Contracts          $18
       Other Costs                    $32                             Other Costs                    $32
       TOTAL                          $5,345                          TOTAL                          $2,398

  Assumptions
  • Costs are for ongoing operations and do not include transition/implementation or rotation costs.
  • Staff level would decrease from 110 to 36 (6 per office). Straight per-person averages used to determine future
    personnel costs.
  • Travel costs would increase due to requirement for more travel throughout region. Assumption is $10,000 in
    travel per professional employee (4 professional employees per office x 6 offices x $10,000 in travel)
  • Equipment and Supplies would decrease due to decreased requirements in fewer offices.
  • Building Management and Maintenance would decrease due to lower volume of office space to rent and maintain
    and potential increase in in-kind contributions because of high profile of hosting an office.



                                               Final Report – November 3, 2003                                        40
Organizational Structure: Implement Regionalized OGSMS
Action Steps for Implementation Plan:
1) Develop a working group for the regionalization of the OGSMS consisting of stakeholders from current OGSMS, General
   Secretariat, and Permanent Council.
2) Analyze the current OGSMS structure to determine the strengths and weaknesses of each office and identify aspects of the
   structure that should be carried forward to the regionalized environment. In addition, do a detailed cost analysis of current
   structure to establish baseline for future comparison and to develop a business case for regionalization.
3) Develop formalized regional OGSMS framework, guidelines, performance measures, and plan of action that outline the structure,
   intended function, term characteristics, location and rotation of each office, and communication strategies between the OGSMS
   and Headquarters. Develop business case to sell the idea within the Organization and to other stakeholders.
4) Create regionalized offices as a result of lottery or other agreed upon approach to determine location and staff.
5) Establish a memorandum of agreement with other organizations to receive services when needed.
6) Monitor the use and performance of the offices to maximize their effectiveness in their role. Also, communicate the services of the
   offices to the rest of the OAS to increase understanding of their usefulness.


Timeframe for Implementation Plan:

                                               Implement Regionalized OGSMS
         Develop Working Group
                  Identify Strengths and Weaknesses of Current OGSMS
                                            Develop OGSMS Regional Framework (structure, performance measures, staff, etc.)
                                                         Create Regionalized OGSMS Based on Lottery
                                                                Establish Memorandum of Agreement

                                                                          Monitor Operations and Make Changes as Necessary

   0          3           6            9            12             15           18           21            24            27      30

    Timeline (Months)


                                                   Final Report – November 3, 2003                                                       41
  Organizational Structure: Implement Regionalized OGSMS
Implementation Costs
  Direct implementation costs associated with regionalization of the OGSMS include:
     Cost of phasing out current offices such as travel, moving, liquidation, severance, etc.
     Cost of establishing the new offices throughout each region every five years, such as travel, leases, establishing office
       infrastructure, human resource activity, etc. These costs may be reduced by seeking in kind contributions from host countries,
       who stand to benefit by having the regional offices located in their countries.
     Costs associated with developing policies and procedures for utilization of the regional offices and interaction between the
       OGSMS and GS HQ staff.

  Indirect costs associated with regionalization of the OGSMS include:
      The time spent supporting the working group establishing the offices.



                  Barriers                                                             Critical Success Factors

 The difficulty of cycling the location and directors
 within each OGSMS as well as the expenses associated
 with it every five years may cause a burden on the OAS,           It is important not to group too many countries with active current
 especially during the first few iterations.                        OGSMS operations together into one regional office in an effort to
                                                                    balance workload throughout the regional offices.

                                                                   Effective transition and operation guidelines must be established
 The loss of staff that would result from the closing of            and understood by all parties.
 several OGSMS may lead to resistance among certain
 stakeholders.




                                                     Final Report – November 3, 2003                                                      42
Business Processes
  • Implement Results-Based Budgeting
  • Implement Donor Relations Function
  • Implement Cost Management and Recovery Plan
  • Adopt Formal Quota Assessment Policy
  • Implement Strategic Mandate Framework
  • Streamline Procure-to-Pay Process




                                   Final Report – November 3, 2003   43
   Business Processes: Implement Results-Based Budgeting
Observations:
• Specific funds are not part of the formal organization-wide budgeting process, yet total close to half of the total operating budget.
• Budgeting is focused on the consumption of resources, and not the outputs and objectives of the organization.



            Background                                     Issues

• The current operating budget,           • There is little correlation between
  which has been declining in real          resource allocation and
  terms for the past several years, is      organizational objectives, strategic
  determined using a resource-              priorities, and mandates.
  based budget process. As a              • As a result of the increased mandates
  result, resource allocations are          combined with a flat Regular Fund
  based on staff level within each          budget, there has been an increasing
  unit and historical data as               reliance on specific funding, which is
  opposed to strategic priorities and       not part of the current budget process
  desired results.                          (see graph).
                                          • As a result of the increased demand
                                            on administrative and support
                                            activities funded by the Regular
                                            Fund, as well as the blending of
                                            Specific and Regular Funds across
                                            the organization, it is difficult to
                                            determine budget allocations and             Graph shows the trend in Regular Fund versus Specific
                                            controls, as well as accurate tracking       Fund contributions over the past six years. While total
                                            of resource expenditures across the          funding has been increasing, the Regular Funding has
                                            Organization.                                declined.




                                                    Final Report – November 3, 2003                                                                44
 Business Processes: Implement Results-Based Budgeting
 Description:
 Implement a Results-Based Budgeting system (also known as Performance-Based Budgeting) to more effectively allocate resources
 according to the desired outcomes and strategic objectives of the OAS. A Results-Based Budgeting (RBB) system is a method that
 shifts accountability from a focus on inputs, processes, and projects to one on results, outcomes, and performance. The system
 requires an organization to concentrate on the relationship between objectives, results, and resources, thereby encouraging a focus
 on operational performance. A Results-Based Budget would allow the OAS to identify its desired outputs along with the business
 areas responsible for those outputs in accordance with a strategic plan. Resource allocation would be shifted toward aligning costs
 with strategic initiatives. In the case of areas that respond to mandates, results and outcomes could be defined by desired mandate
 results and outcomes, allowing resources to be better coordinated to meet the objectives of the mandates of the GS (as well as
 providing an understanding of when resources cannot achieve the desired results of a mandate).


Advantages:                                                             Disadvantages:
• A shift from the current budgetary focus on inputs to one that        • Expressing objectives in quantifiable terms is difficult for
  aligns the resources and activities of the Organization toward          certain program areas that do not have easily measurable
  obtaining the desired results would allow the OAS to more               results.
  efficiently meet strategic objectives.
                                                                        • Implementing RBB requires a larger time investment on
• A RBB would increase the level of accountability of business
                                                                          the part of program managers and directors in formulating
  managers in meeting the Organization’s objectives within
                                                                          performance plans and training.
  budgetary constraints.
• A RBB would assist the OAS in implementing better fiscal
  control mechanisms, thus eliminating the policy of extending
  resources to program areas who over execute their budgets.
• Implementation of evaluation mechanisms allows for the
  assessment of program merit, determination of resource
  allocation, and activities performed by OAS.
• Implementation of performance plans helps prioritize
  activities and resources according to the desired results of the
  Organization, improving the ability to meet objectives with
  limited resources.

                                                      Final Report – November 3, 2003                                                    45
Business Processes: Implement Results-Based Budgeting
Action Steps for Implementation Plan:
1) Define a budget transformation committee coordinated by DMAPSS (or successor organization) consisting of representatives from
   all program areas of the General Secretariat as well as the Permanent Council. Due to the close relationship between the strategic
   planning process and budgeting, the same committee that was nominated to participate in the strategic planning process could be
   used for budgeting.
2) Based on strategic plans, develop specific performance measures to be used in measuring how well objectives are being met. In
   the case of mandates, develop mandate outcomes and define the activities required to achieve them, and base measures on these
   activities.
3) Work with HR to incorporate measures into professional development and performance measurement process.
4) Implement Results-Based Budgeting system to link objectives to performance measures.
5) Establish accountability framework to assess the success of achieving the desired objectives.
6) CAAP to work with budgeting function to monitor progress and assist business areas in implementation, as well as serve as the
   governing body over the budget to which program managers are accountable.


Timeframe for Implementation Plan:

                                             Implement Results-Based Budgeting

        Establish Budget Transformation Committee
                      Develop Specific Performance Measures
                                  Incorporate Performance Measures into Professional Development Process

                                                               Implement RBB and Link Objectives to Measures
                                                                           Establish Accountability Framework
           CAAP to Monitor Progress

 0          3             6             9            12            15            18           21            24      27           30
  Timeline (Months)


                                                     Final Report – November 3, 2003                                                    46
  Business Processes: Implement Results-Based Budgeting
Implementation Costs
  Direct costs associated with implementation of a Results-Based Budgeting system include:
     If new budget software is required, the software implementation costs.
     The development and delivery costs of training courses to educate personnel of the principles of the system as well as timelines,
       responsibilities, and how to operate the new software system.

  Indirect costs associated with implementation of a Results-Based Budgeting system include:
      The cost of operating both the current Resource-Based Budgeting system and the Results-Based Budgeting system in parallel
        until the Organization fully adopts the Results-Based Budgeting system.
      The cost of the time spent by the committee and stakeholders designing, agreeing upon, and supporting the implementation of the
        new budgeting system.


                   Barriers                                                              Critical Success Factors

 Current OAS culture focused primarily on resources, not
                                                                   • Create a Strategic Planning framework that clearly identifies OAS
 results.
                                                                     organization objectives and links performance metrics to
                                                                     objectives.

 Lack of clearly identified strategic objectives to link           • The OAS must achieve Organization-wide adoption and adherence
 with activities and operations.                                     to a strategic planning framework to lay the foundation for the
                                                                     mapping of resources according to desired results.

                                                                   • The Organization must determine and implement key performance
 Difficulty determining appropriate performance                      measurements to ensure accurate assessment of success and
 measurements.                                                       guarantee that resources are properly aligned.



                                                       Final Report – November 3, 2003                                                    47
Business Processes: Implement Donor Relations Function

Observations:
 The dollar amount and number of Specific Funds in the organization has continued to grow; however, there is no formal
  coordination of the activities associated with raising and managing these funds.




                   Background                                                                     Issues

  As a result of the effective decrease in the Regular                   • Due to the fact that all fundraising initiatives are
   Fund budget and the increase in mandates during                          handled independently of one another, there is
   recent years, the OAS has relied more heavily on                         little coordination of donor relations resources
   specific funds to supplement project activities.                         and redundant tasks being performed by
  All core fundraising initiatives are the                                 personnel throughout the Organization.
   responsibility of individual areas, which develop                      • The fragmented fundraising environment leads to
   their own relationships with donors, negotiate                           competition for the same donor dollars.
   agreements, solicit funds, provide customized                          • Uncoordinated and unorganized appeals to
   project reporting, etc. According to survey results                      donors undermine the professional reputation
   from a sample of Technical Area personnel, staff                         and credibility of the organization, and
   are spending approximately 10% of their time                             ultimately reduce the ability to forge strategic
   supporting the aforementioned activities.                                alliances and engage in co-financing with
                                                                            donors.




                                                   Final Report – November 3, 2003                                                 48
Business Processes: Implement Donor Relations Function
Description:
Implement a donor relations function to coordinate activities relating to the solicitation, negotiation, administration, and reporting of
Specific Fund projects throughout the OAS. The proposed Donor Relations Office would consist of full time development
managers who would be in charge of coordinating existing and identifying new fundraising opportunities, and developing a
consistent message and point of contact with the donor community. In addition, this group would establish protocols and guidelines
for proposal development and standard reporting package creation. To support the Donor Relations staff, relevant personnel within
the Technical Areas would be appointed to serve as liaisons to help manage the donor relationships and solicit funds. In addition,
designated staff from the Administrative and Support areas would provide support such as standard and customized report creation
using the Oracle system, recruitment efforts, procurement, payroll processing, etc. A centralized Donor Relations function could
also more easily coordinate fund raising efforts with other similar organizations, such as PAHO.


  Advantages:                                                             Disadvantages:
  • A coordinated donor relations function could decrease                  There is the potential for Technical Areas to sense a loss of
    redundancies, increase economies of scale, reduce                       autonomy in obtaining funding for their own specific
    competition among Units, and improve timeliness of                      initiatives.
    donor reporting. The issue of competition for donor
    funds could be managed by tracking and targeting
    potential donors in a coordinated manner.
  • Centralized fundraising could enable the OAS to
    establish more brand recognition and credibility with
    the donor community.
  • Areas that currently rely heavily on Specific Funds
    and dedicate a large amount of resources to soliciting
    and managing Specific Funds could benefit by
    leveraging these resources to focus on more technical
    and project related activities. Areas that do not
    currently solicit specific funds due to a lack of
    resources could also benefit from the services.


                                                    Final Report – November 3, 2003                                                         49
Business Processes: Implement Donor Relations Function
Action Steps for Implementation Plan:
1) Define a working group of senior staff from the Technical Areas and Secretariat for Management to determine the specific size and
   resource needs of the Donor Relations Office.
2) Define a committee made up of personnel from the Technical Areas and the Secretariat for Management to identify and appoint
   appropriate staff to the new Donor Relations Office (likely areas of potential staff would be External Relations and the Units).
3) Coordinate and catalogue the current OAS-donor relationships.
4) Appoint business development managers to specific ―donor accounts‖ and establish baseline services and shared materials.
5) Develop and deliver training to personnel in the Technical Areas, Fundraising Office, and Secretariat for Management on new
   services and materials.
6) Establish roles and responsibilities for staff in the Technical Areas, new Donor Relations Office, Secretariat for Management, and
   other applicable stakeholders (e.g., Public Information, External Relations, etc.) to eliminate duplication of efforts and streamline
   processes
7) Follow up with donors and Technical Areas to assess the level of customer satisfaction and quality of service to determine what is
   working successfully and what needs to be corrected.


Timeframe for Implementation Plan:

                                              Implement Donor Relations Function
       Establish Representative Working Group to Shape Office
            Appoint Staff to Fundraising Office
                           Migrate Current Donor Relationship
                                       Appoint Business Development Managers
                                                                 Develop and Deliver Training to Organization
                                                                               Establish Roles for Affected Personnel
                                                                         Monitor Level of Success and Customer Satisfaction

0          3            6              9              12         15             18            21             24         27       30
Timeline (Months)


                                                       Final Report – November 3, 2003                                                     50
 Business Processes: Implement Donor Relations Function
Implementation Costs

  Direct costs associated with the coordination of the donor relations function include:
     Cost of restructuring organizational units to form the Donor Relations Office, including personnel relocation and facility costs.
     Training costs incurred for training internal GS personnel and informing the donors of changes in the donor relations process.
     Communication costs associated with notifying the donor community of the change in fundraising policies and guidelines.

  Indirect costs resulting from the coordination of the donor relations function include:
      Account migration and transition costs incurred due to the possible downtime resulting from the new donor relations processes.




                    Barriers                                                            Critical Success Factors

  The Technical Areas may be resistant to the Donor
  Relations office and still rely solely on their own               The staff in the Donor Relations Office, Technical Area
  individual fundraising efforts to secure specific funds.           representatives, and the liaisons from the Secretariat for
                                                                     Management must establish a collaborative approach and open
                                                                     lines of communication for the intended coordination to be
                                                                     achieved.
  The external donor community may resist the Donor
                                                                    The core Technical Area liaison and the Donor Relations
  Relations Office due to a loss of comfort gained through
                                                                     representative must successfully share the donor relationship
  establishing relationships within the Organization’s
                                                                     responsibilities and maintain open lines of communication.
  Technical Areas.




                                                      Final Report – November 3, 2003                                                     51
  Business Processes: Implement Cost Management and Recovery Plan

Observationsb
• As the volume of specific fund projects continues to increase, the current method for identifying and recording the management
  costs of administering Specific Fund projects is not sufficient.


            Background                                      Issues

  As a general requirement set at the     • As the number of Specific Fund
   signing of an agreement, the OAS          projects increases and the cost to
   is obligated to provide customized        the GS to administer them
   financial and operational reporting       increases, the ability to support the
   to specific fund donors, based on         projects with only the interest
   their individual requirements.            received on fund balances is
  Currently, the interest earned on         declining (see graph).
   specific fund deposits is allocated     • It is difficult to solicit overhead and
   to support the administration costs       administrative funds from donors,
   of specific fund projects, which is       as they perceive project
   estimated to cost approximately           administration to be the
   $2.6M per year.                           responsibility of the OAS.
  Regardless of the level of              • Donors who submit intricate               Graph depicts the administrative support costs for
   reporting specificity required by         reporting requirements are not            Specific Fund projects versus the interest income
   the donor, the OAS devotes                required to provide a subsidy for         from Specific Funds allocated to support project
   necessary resources to meet the           additional time and resources             administration. (Source: Secretariat for
   demand.                                   provided by the OAS/GS.                   Management)
                                           • The GS is not structured to capture
                                             or estimate additional
                                             administrative costs required to
                                             manage Specific Fund donor
                                             projects.

                                                   Final Report – November 3, 2003                                                          52
Business Processes: Implement Cost Management and Recovery Plan
Description:
Design and implement a formal Cost Management and Recovery Plan to identify and recover the full direct and indirect costs
associated with delivering projects. The Recovery Plan, which has been suggested previously by the Secretariat for Management,
would provide a mechanism for the Organization to recover (or, if not recoverable, to assess) the costs it incurs for administrative
support of specific fund projects. The cost recovery plan would implement provisions for the OAS to charge back the costs of
providing standard services such as Oracle-related requests, processing of payroll, AP, AR, etc. In addition, all optional services
such as specialized financial statements, budgeting, investments, and project management would have a cost associated with them.
Technical Area project management would be required to assess the optional services needed and decide whether to absorb them or
pass them along to the donor requesting these services. Consideration of these costs would be part of the Organization’s evaluation
of the acceptance of Specific Funds. The proposed cost management and recovery plan can be considered both in tandem with the
suggested coordinated Donor Relations Office as well as independently, should the OAS elect not to implement the Donor Relations
Office structure.

 Advantages:                                                           Disadvantages:
 • The cost management and recovery plan would enable                   Specific fund donors typically have been resistant to built in
   the Organization to identify and cover the                            overhead allocations earmarked for overheard support and
   administration of Specific Fund projects. As a result,                project administration. The common opinion of the donor
   the current strain on the Regular Fund to support                     community is that these costs should be absorbed by the
   specific fund projects could be identified and alleviated.            receiving Organization as their financial contribution to the
 • By building an overhead charge into the payroll of all                project.
   staff funded by specific funds, the overhead may be
   more appealing to donors due to the perception that it is
   a cost of doing business.
  The Organization stands to significantly reduce the
   costs incurred for specific fund project administration.
   The dollars generated through the cost recovery
   program would enable Specific Fund project
   administration to generate revenue and break even.

                                                    Final Report – November 3, 2003                                                       53
Business Processes: Implement Cost Management and Recovery Plan
Action Steps for Implementation Plan:
1) Develop a Working Group of representatives from the Secretariat for Management, Technical Areas, and Donor Relations Office (if
   implemented).
2) Determine the specific list of activities that are deemed to be standard and those that are optional, as well as the specific costs
   associated with each optional service.
3) Finalize the cost recovery framework and educate affected personnel.
4) Develop cost recovery guidelines for all current and future Specific Fund donations to ensure consistent communication and cost
   allocations to donors. Clear cost criteria should be provided to potential donors, and the appropriate personnel should be given
   authority to reject or renegotiate agreements that do not comply.




Timeframe for Implementation Plan:

                                        Implement Cost Management and Recovery Plan


       Establish Representative Committee

               Determine Standard and Optional Support Activities

                              Finalize Framework and Educate Personnel

                                              Develop Cost Recover Guidelines for Future Transactions

0          3              6               9               12            15            18            21   24       27           30




                                                           Final Report – November 3, 2003                                               54
 Business Processes: Implement Cost Management and Recovery Plan
Implementation Costs
  Direct costs associated with implementing a cost management and recovery plan include:
     Communication costs associated with notifying the donor community of the change in fundraising policies and guidelines.
     Costs incurred through the development and delivery of training programs for both Technical Area and administrative area staff.
     Cost recovery guideline development costs associated with production, printing, distribution, etc.

  Indirect costs associated with implementing a cost management and recovery plan include:
      Costs related to the transitional period that the GS will endure as they migrate to the new cost recovery system.




                   Barriers                                                           Critical Success Factors
 The donor community may resist the idea of paying
 an overhead contribution for administrative project
 activities, and, as a result, may direct their donations
 to other organizations who do not have such a policy.


                                                                      OAS Management must introduce the suggested cost management
 Current specific fund project agreements may be
                                                                       and recovery plan to the outside donor community in a manner
 difficult to migrate to the cost recovery program, and, as
                                                                       that does not give the perception that the GS does not desire to
 a result, may have to remain on the current structure
                                                                       contribute to the project in an equitable manner, which is an
 until the project is complete.
                                                                       expectation held by many donors.


  Current donors, who do not participate in a cost
  recovery model, may be resistant to entering into
  agreements with a cost recovery program.


                                                       Final Report – November 3, 2003                                                    55
Business Processes: Adopt Formal Quota Assessment Policy
Observations:
• There is not a mechanism to update the OAS quota system in a periodic and comprehensive way. As a result, quotas are
  largely determined by isolated negotiations among the member states. This approach has made updating quotas difficult, and
  as a result quotas have not changed significantly despite changes in the ―ability to pay‖ by individual members and increased
  demands placed on the Organization in the form of additional mandates.


                                   Background                                                                            Issues

  The OAS quota structure was once based on the UN quota                             • As a result of the non-standardized quota system, it is
   guidelines, which took into account a country’s GDP, per                             difficult to determine if OAS Member States contribute
   capita income, and adjustments for items such as a closed                            based on their ability to pay. This results in certain
   economy. This system was abandoned in 1981. A similarity                             dissatisfied member states not paying in a timely manner
   between the two Organization’s quota policies is the                                 and has limited the ability of the OAS to increase the
   consideration of the Member’s ability to pay.                                        Regular Fund.
  While the minimum and maximum contributions have been                              • While past proposals have been based on mathematical and
   established at .02% and 59.47%, respectively, recent quota                           statistical foundations, they have been vetoed due to a lack
   scales for Member States have been determined through                                of consensus among the Member States.
   negotiations without the use of standardized formulas.                             • Due to the issues with the current quota, Member States
  As new members have joined the OAS, the quota ceiling and                            tend to prefer to contribute funds in the form of specific
   quota percentages have remained unchanged, while current                             fund donations instead of increasing quotas.
   Member States adjust their contributions downward with the
   addition of the new Member’s contribution.

                                                               Timeline of Major Quota Milestones
 1940                       1950                   1960                      1970                     1980                       1990                         2000

1948: Pan American Union                        1960: Adoption of the                      1981: UN Quota Scale     1990: Resolution 1071    Present: Quotas remain largely
 method based strictly on                          UN Quota Scale                               abandoned         establishing maximum and   unchanged, still determined by
       population                                                                                                      minimum quotas               past negotiations




                                                               Final Report – November 3, 2003                                                                                56
Business Processes: Adopt Formal Quota Assessment Policy
Description:
Design, adopt, and implement a quota policy that periodically recalculates the quotas of Member States based on a set of agreed
upon quantifiable metrics. The process should enable Member States to periodically adjust the quota ceiling based on inflation and
the volume of mandates, as well as to adjust the quota scale based on the ability of Member States to pay. The OAS could be aided
in this objective by utilizing the scales used by similar organization such as the UN or utilizing external organizations, such as the
observer nations, to assist in determining the scales. The new quota policy should be based on logical, standardized, and mutually
agreed upon methods that reflect the ability of Member States to contribute.


  Advantages:                                                            Disadvantages:
   By taking into consideration those quota resolutions
                                                                          Updating the process and determining a standard set of
    that have already been proposed as well as those of
                                                                           metrics will remove the flexibility that each member had in
    similar organizations such as the UN, the OAS is
                                                                           ―negotiating‖ their quota.
    leveraging the research, best practices, and precedents
    already established.
   The proposed quota assessment process could result in
    an increased level of funding from quotas as well as an
    overall decrease in the costs incurred for conferences,
    meetings, and human capital currently being dedicated
    toward negotiations and proposing resolutions for new
    quota policies.




                                                   Final Report – November 3, 2003                                                       57
Business Processes: Adopt Formal Quota Assessment Policy
Action Steps for Implementation Plan:
1) Establish and nominate a Committee of Member State representatives to participate in the development of the new quota policy.
2) Appoint a working group of General Secretariat staff to provide the political decision-making Committee with accurate
   organizational and historical data on cost of operations and mandates.
3) Assess past outstanding quota resolutions as well as policies and guidelines from external organizations such as the UN to leverage
   best practices and begin to derive options for consideration.
4) Based on best practices and input from the GS working group and Member State Committee, collectively derive framework and
   quantifiable set of metrics to be used for determining quotas, including consideration of raising the ceiling if necessary.
5) Implement quota policy and adjust Member State quotas accordingly (if necessary).
6) Develop and distribute detailed guidelines and procedures explaining in detail the principles and foundation for the new quota
   structure.




Timeframe for Implementation Plan:

                                                Adopt Formal Quota Assessment Policy
          Establish and Nominate Representative Committee from Stakeholders
                   Appoint GS Committee to Provide Accurate Data
                          Evaluate Past and Outstanding Quota Resolutions
                                                     Develop Framework and Metrics to Determine Quota
                                                                   Implement Quota Policy Upon Election

                                                                                 Distribute Guidelines

   0           3              6             9            12             15           18             21    24        27           30

   Timeline (Months)



                                                       Final Report – November 3, 2003                                                   58
  Business Processes: Adopt Formal Quota Assessment Policy
Implementation Costs
  Direct costs associated with the adoption of a formal quota assessment policy include:
     The cost of scheduling and conducting the conferences and meetings, etc., that would be required during the decision-making
       process.
     The cost of research and education of the decision committee of both the proposed resolutions of the past as well as the quota
       policies of similar organizations such as the UN.
     The cost of communicating the newly elected quota policy to the Member States.

  Indirect costs associated with the adoption of a formal quota assessment policy include:
      The cost of the human capital resources dedicated to determining the new quota structure instead of directing efforts to other
        areas of the organization for which they were originally assigned.



                   Barriers                                                             Critical Success Factors
If the proposed quota structure is perceived to not
benefit enough Member States, the proposal might be
vetoed and no progress will be made.                                The OAS Committee must determine and agree upon a
                                                                     quantifiable set of metrics that accurately determine the
                                                                     contribution level of each Member State.
 The potential that there are no formulas or quantifiable
 metrics that determine quotas that are satisfactory to all
 Member States.




                                                      Final Report – November 3, 2003                                                   59
  Business Processes: Implement Strategic Mandate Framework
 Observations:
 • The number of mandates have increased considerably; however, there is not a formal acceptance, planning, or monitoring
   process for managing the mandates.


           Background                                   Issues

 During the past several years, the      The volume of mandates has
  number of mandates assigned to           increased, but the number of
  the General Secretariat has              completed mandates has declined.
  increased considerably.                 Currently there is no method for
 Once approved by the General             prioritizing mandates.
  Assembly or Summit of the               It is difficult to assess mandate
  Americas, mandates are assigned          completion due to the lack of
  to the corresponding business area       quantifiable metrics and
  within the GS to complete without        milestones associated with the
  accurately quantifying the               mandates.
  resources required to execute
  them.
 Although mandate status is
  monitored by the GS (specifically,
  DMAPPS), the tracking does not                                                  Graph shows the total number of mandates over the past
  provide sufficient information to                                               five years with their completion status. As the in-
  prioritize or budget by mandate.                                                process mandates increased considerably, the completed
                                                                                  mandates have declined, leaving a backlog of mandates
                                                                                  that creates a perception that the organization is not able
                                                                                  to complete its mandates.




                                                Final Report – November 3, 2003                                                                 60
Business Processes: Implement Strategic Mandate Framework
Description:
Implement a framework for adopting, prioritizing, funding, and tracking OAS mandates in relation to the strategic objectives,
Charter, and desired results identified in the proposed Strategic Planning and Results-Based Budgeting systems. The change is
required to adopt and align the mandates of the OAS with its strategic objectives to deliver the desired results of those objectives
and allocate resources accordingly. In addition, the mandate tracking procedures need to be improved by designating more
quantifiable results and milestones to accurately measure completion and level of success.


  Advantages:
   By using a set of quantifiable metrics to assess                      Disadvantages:
    mandate completion, the proposed framework would                       The mandate evaluation and adoption process would be
    enable more accurate and outcome-focused tracking of                    more sophisticated and potentially time consuming since
    mandates.                                                               there would be more scrutiny before being acted upon by
   Resources would be allocated to those mandates that                     the General Secretariat.
    align with the high priority areas and strategic
    objectives of the OAS.
   Mandates would be developed and adopted in line
    with the core set strategic objectives of the
    Organization and will therefore contribute toward
    delivering the desired results of the OAS.




                                                   Final Report – November 3, 2003                                                     61
Business Processes: Implement Strategic Mandate Framework
Action Steps for Implementation Plan:
1) Develop a working group within the Permanent Council to chair and coordinate the mandate development and implementation
   process (mandate prioritization will largely continue to be done by the political bodies; however, aligning resources to these
   mandates will be the role of the working group). This committee would work closely with representatives from Budget
   (DMAPSS), the Strategic Planning Committee, and staff in the GS to oversee the mandate execution process.
2) Develop methodology for evaluating proposed mandates to assess compliance with Organizational strategic objectives and desired
   results. This would enable the OAS to determine whether a mandate will contribute to the OAS meeting its goals and, if so, to
   what extent.
3) Develop framework for prioritizing mandates once they have been adopted and assigned to technical areas for completion.
4) Allocate budgetary resources according to the prioritized list of mandates that align with the strategic objectives and goals of the
   OAS, and based on the level of funding that will be required to complete the mandate.
5) Develop framework for tracking the completion of mandates based on quantifiable measures and tracked by the business area
   completing the mandate.
6) Modify the current database inventory to include metrics to measure results. In addition, identify opportunities to consolidate
   mandates.
7) Hold periodic evaluation sessions to assess the completion of mandates, track budgetary execution and alignment with strategic
   priorities, and make changes as necessary.

Timeframe for Implementation Plan:
                                          Implement Strategic Mandate Framework

       Establish Representative Chair Committee
                  Develop Mandate Evaluation Methodology
                               Develop Mandate Prioritization Framework
                                       Allocate Budget Resources According to Priorities
                                                     Develop Framework for Tracking Mandate Completion
                                                                   Modify Current Mandates Database

                                                                                       Conduct Evaluation Sessions

0          3            6             9             12             15            18            21           24       27          30
    Timeline (Months)
                                                     Final Report – November 3, 2003                                                      62
  Business Processes: Implement Strategic Mandate Framework
Implementation Costs
  Direct costs associated with implementing a strategic mandate framework include:
     Costs associated with making adjustments to the current mandate tracking system or adopting a new system.
     Costs of developing training, policies, and procedures to facilitate the organization-wide adoption of the strategic mandate
       framework.

  Indirect costs associated with implementing a strategic mandate framework include:
      Cost tied of the time spent implementing the new strategic mandate framework.




                  Barriers                                                              Critical Success Factors


                                                                   The strategic planning process, budgeting process, and mandate
 Inadequate implementation of the strategic planning                development and implementation process must be closely aligned
 process and the Results-Based Budgeting process would              and coordinated with one another.
 greatly inhibit the ability of the Organization to change
 its approach to mandate management and execution.                 Mandates need to be more specific and the metrics used to assess
                                                                    mandates must be measurable and standardized.




                                                     Final Report – November 3, 2003                                                   63
     Business Processes: Streamline Procure-to-Pay Process
 Observations:
 The ―Procure-to-Pay‖ process, which includes all activities associated with acquiring and paying for goods and services, has a high
 volume of low dollar transactions (approximately 88% of transactions are under $2,500) and also relies on checks for most
 disbursements (approximately 85% of payments are via check). As a result, resources must be devoted to processing low-value and
 paper-based transactions that could be automated.



              Background                                           Issues                           2002 Payment Threshold           Payments

                                                                                                    <= $500                                 29,243
• Procure-to-Pay activities can be          • In 2002, there was a high volume of low dollar        > $500 and <= $2,500                    19,145
  divided into transactional activities       purchases processed by the Procurement and
                                                                                                    > $2,500 and <= $5,000                   3,377
  (mechanical activities associated with      Accounts Payable areas. Each of these
  the processing of a transaction) and        transactions consume about the same amount of         > $5,000                                 3,294
  strategic activities (negotiating           resources as higher dollar transactions, resulting    TOTAL                                   55,059
  contracts, managing vendors, cash           in a high level-of-effort devoted to processing
  management, strategic sourcing, etc.).                                                           There is a high volume of low-dollar transactions.
                                              transactions (see table).                            Approximately 88% of all AP transactions are for
  The time allocation of the Accounts       • There is a high volume of recurring transactions     less than $2,500.
  Payable Department is focused on            (similar transactions with the same vendor).
  transactional activities more than          These transactions are not automated or                    Payment Methods          Payments
  strategic activities, likely due to the     consolidated and cause an increase in the
  high volume of transactions                                                                           Check                          46,727
                                              workload of the AP function.
  processed.                                • Processing the common cost payments through               Clearing                        5,191
• There is a high volume of ―common           AP increases the processing workload of the               EFT                             2,636
  cost‖ payments, which are overhead          function.
  type allocations that are treated like    • The volume of checks being processed far                  Wire                              505
  traditional payments.                       exceeds the number of wire transfers and EFTs,            Total                          55,059
                                              which traditionally are more efficient forms of
                                                                                                   There is a high volume (approximately 85%) of
                                              payment (see table).                                 disbursements made via check.


                                                      Final Report – November 3, 2003                                                                64
Business Processes: Streamline Procure-to-Pay Process
Description:
Modify several key procurement and payment processes within the Procurement and Accounts Payable areas to minimize
processing time and improve efficiencies. These modifications include:
• Use of Procurement Cards for low-dollar transactions – purchases made under a certain dollar level can be executed using a
  purchase card, which would be paid similar to a credit card bill with a single invoice for multiple transactions.
• Automated payment for recurring transactions – For expenses incurred on a regular periodic basis, implement periodic billing or
  payment schedules to eliminate individual processing of invoices.
• To the extent possible, migrate vendor disbursements to EFT – In order to reduce the level of check processing, transition
  applicable disbursements to electronic funds transfer (EFT), especially for recurring purchases at the same vendor.



  Advantages:                                                          Disadvantages:
   By implementing the three options, the AP function                  Certain vendors may not have the technical capability to
    could free resources to focus efforts on more strategic              receive payments via EFT, thus mandating invoice payment
    initiatives such as cash management.                                 by check or change of vendor.
   Purchase cards could decrease the volume of                         Upfront time and effort is required to set up vendors for
    transactions processed by the AP group as well as                    EFT payments.
    streamline the purchasing process for low value
    transactions by the Procurement group. In addition,                 Procurement cards may require additional training of
    Purchase Cards can provide flexibility in making                     program staff who would be executing transactions.
    purchases in the OGSMS
   By establishing automatic payments for recurring
    transactions, the volume and processing time involved
    with repetitive invoices could be reduced.
   In addition to reducing the amount of time spent in
    paper check processing, EFT’s require less touch
    points, less paper, and are less expensive to execute.
   The suggested improvements could be implemented
    relatively quickly to reduce workload.

                                                   Final Report – November 3, 2003                                                   65
Business Processes: Streamline Procure-to-Pay Process
Action Steps for Implementation Plan:
1) Review accounts payable transactions to identify specific opportunities to improve the process.
     • Recurring transaction at the same vendor—Approach vendors about periodic billing and/or automatic payment
     • Determine the number of transactions that could be placed on a purchase card, i.e., the transactions below a certain
       micropurchase threshold ($2,500 is typical), and where they are occurring, i.e., what areas are making the purchases.
     • Identify internal transactions that could be automated in the general ledger, e.g., common cost payments.
2) Develop a plan of action for implementing process changes and enablers, and develop baseline and goal performance measures to
   monitor progress.
3) Implement changes and enablers, e.g., the purchase card and automated transactions. (Note: purchase card implementation will
   require training and guideline development to improve controls and reduce risk of fraud and abuse.)
4) Monitor spend on an ongoing basis to continually improve the process and reduce or automate transactions and increase time spent
   on more strategic activities.




Timeframe for Implementation Plan:

                                                 Streamline Procure-to-Pay Process


           Review Accounts Payable Transactions
                  Develop a Plan of Action

                                 Implement Changes and Enablers
                                      Monitor Spend on an Ongoing Basis to Continually Improve the Process

   0          3              6               9          12            15            18           21          24   27          30
   Timeline (Months)

                                                       Final Report – November 3, 2003                                                66
  Business Processes: Streamline Procure-to-Pay Process
Implementation Costs
  Direct costs associated with streamlining procure-to-pay processes include:
     Direct costs will vary depending on the specific improvement; however, generally these improvements are relatively inexpensive
       to implement and result in quick and quantifiable benefits. There is also the potential for generating revenue through purchase
       card rebates (many offer rebates for quick payment of invoices).

  Indirect costs associated with streamlining procure-to-pay processes include:
      Training and change management will be required for certain changes.
      Updating of procurement and payment policy may be required for certain improvements, e.g., purchase card.




                  Barriers                                                             Critical Success Factors


                                                                  Encourage cooperation and communication between procurement
 Reluctance of procurement and accounts payable                    and accounts payable to encourage an end-to-end view of the
 personnel to assume new strategic roles and activities as         procure-to-pay process.
 the transaction workload declines.                               Use freed resources to perform more strategic roles, such as
                                                                   vendor management, cash management, strategic sourcing, etc.




                                                     Final Report – November 3, 2003                                                     67
Human Capital
 • Overview of OAS’ Current Human Capital Policies and Practices
 • Overview of OAS Staff Demographics
 • Human Capital Practices at Leading Organizations
 • The Major Questions that Drove Our Analysis
 • Our Methodology
 • Our Observations about Human Capital Practices at OAS
 • Human Capital Appendices:
         F. Current OAS Grade and Salary Structure
             Description of United Nations Compensation System
           G. OAS Personnel Register (June 2003) with detailed OAS demographics
           H. OAS Performance Appraisal Form
           I. Detailed Deloitte Research Findings Related to OAS Human Capital Issues
           J. Series of Charts Reflecting Analyses of OAS Human Capital Issues

                                 Final Report – November 3, 2003                        68
Overview of OAS’ Current Human Capital Policies and Practices

 Following is a brief overview of the OAS’ current Human Capital policies and practices. A more detailed
 description is incorporated in the OAS Staff Rules (available from DHRS) and in the appendices that appear at
 the end of the report.

 GOVERNING LAWS AND REGULATIONS
 As is the case with other multilateral organizations, OAS is exempt from the laws of the host country and the
 other Member States. Accordingly, the OAS Charter, directives from the General Assembly, and directives from
 the Secretary General provide the foundation for the organization’s Human Capital policies and practices.
 Human Capital policies are captured in the OAS Staff Rules and in policy instructions published periodically by
 the Secretariat for Management. The Staff Rules and other instructions are available in DHRS.

 NATURE OF APPOINTMENTS
 The General Secretariat consists of approximately 650 employees who support a wide range of programs and
 administrative operations approved by the Member States. At present, 538 are funded by the Regular Fund and
 about 112 are funded by Specific Funds. Staff are employed under several different types of appointments.

 • Trust – Certain posts are reserved for trust appointments, which are filled by appointment of the Secretary
   General for an indefinite period. Either a career or non-career employee may fill a trust appointment. These
   appointments end when the Secretary General leaves office or terminates the appointment.

 • Career Service – Career status is independent of the post, and members can only be separated for cause.
   This category is currently being phased-out and replaced with ―Continuous Contracts‖.




                                           Final Report – November 3, 2003                                         69
Overview of OAS’ Current Human Capital Policies and Practices

 • Fixed-Term Contracts – Employment under this category is for a fixed term. There are two subcategories of
   fixed term contracts:
        • Short-Term Contracts (Series A) – Maximum length of contract, or series of contracts, is three years
            unless funded with specific funds.
        • Long-Term Contracts (Series B) – Can be issued for up to five years. Individuals must compete for
            appointment to a long-term contract.

 The following is a profile of OAS staff by type of appointment.
              Type              Length           % of      Average      Average       Average         U.S.        Non-U.S.      Male     Female      Total
               Of                 of             Staff       Age        Years of       Salary       Nationals     Nationals
           Appointment        Appointment                               Service

            Long-Term           1-5 Years        42%         42.7          6.2        $58,538          110           165         125       150       275
             Contract

              Career            Residual         33%         55.6         24.2        $73,247          85            131         100       116       216

            Short-Term          < 3 Years        14%         35.6          1.9        $50,520          31            57          42         46        88
             Contract

             Trust /            Indefinite        9%         49.1          5.4        $99,277          17            42          40         19        59
           Non-Career

              Trust /           Indefinite        2%         60.2         27.6        $124,000          2             9           9          2        11
              Career

              Totals                            100%         46.8         11.9        Average          245           404         316       333       649
                                                                                      $67,542

         Figures are as of May 31, 2003 and do not include individuals appointed to Local Professional, Associate, or Temporary Support positions.
         U.S. Nationals = U.S. Citizens and Permanent Residents in the U.S.
         Non-U.S. Nationals = A-2, G-4, and G-1 visa holders, expatriates outside the U.S., and local staff in member countries

                                                              Final Report – November 3, 2003                                                                70
Overview of OAS’ Current Human Capital Policies and Practices

 Other categories: In addition to employing staff who are appointed to the above categories, the OAS employs
 individuals in other categories of employment that are designed to fulfill a variety of short term or specialized
 needs. Individuals in the following categories are not entitled to the rights and benefits provided to staff in the
 categories listed above.

       Local Professionals – Specialists who are recruited locally to work at the duty station where they are
                             recruited. Local Professionals are subject to the labor laws of the country where
                             they provide services.
       Associate Staff Member – Temporarily appointed to perform specific administrative, scientific, support,
                                  or other functions through agreements with other institutions.
       Temporary Support Personnel – Contracted locally to provide support services to temporary projects.

 Independent Contractors (CPRs): Individuals are also hired under Performance Contracts to serve as
 contractors or independent consultants to the OAS. CPRs are not staff members or employees of the General
 Secretariat. The Performance Contract does not create an employment relationship between the General
 Secretariat and a person. CPRs do not receive the benefits provided to staff members of the organization. There
 are two broad categories contracts.

       Task Based – Contracted to complete a defined task within a defined time frame (for example, installing
                    an upgrade to the Oracle system). Task-based contracts are typically less than 11
                    consecutive months in duration.

       Individual – Contracted to perform staff type work on a short-term basis (for example, performing year-
                    end maintenance on the Oracle system). These contracts are typically less than six
                    consecutive months in duration.
                                              Final Report – November 3, 2003                                          71
Overview of OAS’ Current Human Capital Policies and Practices

 CPR Rules -- The most recent rules governing the use of CPRs are contained in Executive Order 01-4,
 Performance Contracts Rules, issued in May, 2001. A procedure is in place for hiring CPRs, with checks and
 balances built in to control the process. These checks and balances include a performance contract which
 identifies CPR candidates that have family relationships that conflict with the rules; the requirement that a
 department head sign a requisition indicating that funds are available prior to hiring a CPR, a resume review by
 the procurement department; and a DHRS review of any requests to issue time based contracts for periods that
 exceed six consecutive months in duration. Further, contracts over $50,000 require review by the legal
 department, and contracts over $70,000 must go out for competition. A copy of Executive Order 01-4 is attached
 at APPENDIX K, as is a copy of a blank performance contract.

 Use of CPRs -- The organization uses a substantial number of CPR’s to provide a wide range of services. In
 2002, 1188 purchase orders for CPRs were processed at a total cost of $14,698,405. 21% of this cost was paid
 by regular funds, and the remaining 79% was paid by specific and other funds. For the period between January
 and September of 2003 the organization issued 935 purchase orders for CPRs at a total cost of $12,348,032. 23%
 of the cost was paid by regular funds, and the remaining 77% percent was paid by specific and other funds. Chart
 II at APPENDIX J shows the number of CPRs requested by funding source. The majority of CPRs are hired to
 work on specific projects and to perform specific functions on a short term basis. It does appear, however, that
 approximately 30% (our best estimate) of CPRs may be performing staff work that would normally be assigned to
 term contract or career staff if staffing levels permitted.




                                            Final Report – November 3, 2003                                         72
Overview of OAS’ Current Human Capital Policies and Practices

 CPR Management -- The organization appears to be making progress towards better managing the CPR hiring
 process. In addition to the controls mentioned above, a new training program was recently rolled out to educate
 managers on the policies and procedures for hiring CPRs. The Oracle system has helped expedite request
 processing and broadened reporting capabilities. Despite this progress, there is still some resistance to following
 the guidelines. Primary responsibility for managing and monitoring the CPR program resides with the Office of
 Procurement.




                                             Final Report – November 3, 2003                                           73
Overview of OAS’ Current Human Capital Policies and Practices
 COMPENSATION
 In 1995, the OAS adopted the United Nations (UN) ―common system‖ of salary administration, which is used by
 UN agencies around the globe. The OAS grade and salary structure and post classification standards are identical
 to the UN. The OAS also updates its salary structures in sequence with the UN. A description of the
 compensation system is attached in APPENDIX F.
 OAS has two grade and salary structures: one for Professionals/Directors and one for General Service employees.
 Copies of the current structures are included in APPENDIX F. Following is a brief description.
 Professionals/Directors
 • 5 grade levels for Professionals, each with 10 -15 steps, depending on the grade.
 • 2 grade levels for Directors, with 9 and 6 steps respectively.
 • 2 salary levels for each grade -- one for staff with dependents and one for staff without dependents.
                                     (dependents structure is slightly higher).
 • The salary structure is identical across all geographical boundaries.
 • A post adjustment, which reflects cost of living differences between duty stations, supplements the salary
   structure to promote equilibrium in purchasing power across all duty stations.
 General Services
 • 7 grades with 13 steps in each grade.
 • Salary ranges vary for each geographic area.
 • No post adjustment added to basic salary.
 • Structure is updated annually by local UN offices in each country, based upon a survey of the local market.

 A profile of the OAS staff by salary structure is provided on the following page.



                                            Final Report – November 3, 2003                                         74
Overview of OAS’ Current Human Capital Policies and Practices
              Salary                Number        Number          Percent        Average       Number        Number
              Structure               of            of              of            Salary         of            of
                                    Grades       Employees       Workforce                      Males        Females

              Director                  2             36             6%         $122,764          26            10
              Professional              5            349            54%          $80,897         192            157

              General Services          7            259            40%          $39,405          93            166
             Profile of staff by salary structure
             Data as of May 31, 2003
             Average salary includes basic pay, post adjustment, and applicable allowances
             Figures do not include the Secretary General, Assistant Secretary General, and 3 Executive Secretary positions. These
             positions are not slotted into the salary structure.


 TAXATION

 As employees of a multilateral organization, most OAS staff are exempt from taxation in both the U.S. and their
 country of nationality. Those staff who are subject to taxation -- such as Mexico, Barbados, and the U.S. --
 receive a reimbursement of their taxes from the host country through OAS. This tax reimbursement costs OAS
 nothing: funds for the reimbursements are provided by the State Department of the Member State where the
 employee’s post is located.

 BENEFITS

 OAS offers a comprehensive collection of benefits to its employees. The benefits provided to employees is
 determined by their appointment type. The following page provides an illustration of the benefits available to
 employees by type of appointment.
                                                   Final Report – November 3, 2003                                                   75
Overview of OAS’ Current Human Capital Policies and Practices




a. Benefits will be one half of those that correspond to fixed contracts of the same duration.              g. Six months of continuous services carries with it right to annual leave.
b. Benefits granted to staff members in grades P1 and above who fulfill the requirements of the Rule - Away h. Applicable only if the staff member has been recruited internationally for a period longer than two years and
         from Headquarters.                                                                                    if it is expected that the staff member will continue in service with the General Secretariat for at least six
c. Benefits granted to staff in grades G1 through G7 who meet the requirements of the Staff Rules.             months after returning home.
                                                                                                            i. Benefit acquired after completion of one year of service.
d. Benefits granted to staff members in Grades P1 and above and those in any grade who have been recruited j. Contracts of one year or more or short-term contracts with one year of continuous service.
         internationally if on board before April,1 2003. Mandatory for those on board after April 1, 2003. k. Benefits granted to staff members in grades P1 and above and those in any grade who have been recruited
e. Benefits granted to staff members in grades P1 and above who fulfill the requirements of the Rule.          internationally if on board before April 1, 2003.
f. Occurs when transportation of personal effects has been granted away from headquarters.                  l. Benefits granted to staff members in grades P1 and above and those in any grade who have been recruited
                                                                                                               before April 1, 2002.
                                                                                                            m. Limited to persons who were on board by December 31, 1970.

Source: OAS Department of Human Resource Services
                                                                                 Final Report – November 3, 2003                                                                                                        76
Overview of OAS Staff Demographics

 Following is a brief overview of OAS Staff demographics by Nationality, Gender, and Location:

 BY NATIONALITY:

 A detailed listing of OAS staff by nationality is included in the Personnel Register in APPENDIX G. The
 organization is highly diverse, with staff representing all of the Member States and several other countries. The
 Member States with the greatest number of nationals at OAS (as of March 31, 2003) are listed below:

   U.S.     124           Venezuela     23           Brazil              17
   Peru      50           Chile         18           El Salvador         15
   Columbia 46            Ecuador       18           Mexico              13
   Uruguay 34             Guatemala     18           Trinidad & Tobago   13
   Argentina 25           Bolivia       17           Canada              12

 BY GENDER:

    MALE:   316 (49%)
    FEMALE: 333 ( 51%)

 BY LOCATION:

    U.S. (Washington): 582
    Other Member States: 77 (typically one professional and two general service staff per country).


                                             Final Report – November 3, 2003                                         77
Human Capital Practices at Leading Organizations

 Research shows that leading (high-performing) organizations recognize that high-quality executives,
 managers, staff, and contractors are critical assets who contribute directly to the organization’s success.
 Accordingly, they design their human capital practices to focus on attracting the best talent possible and
 then aligning that talent with the organization’s strategic objectives. Following are eight human capital
 practices these organizations use that are most relevant to OAS.


 1.    The organization’s mission, objectives, and priorities are clear and permeate the organization.
       Leading organizations have clearly defined missions, objectives, and priorities that are understood by
       managers and staff (and contractors) across the organization. These overall objectives and priorities
       cascade down to department goals and priorities, to unit goals and priorities, and ultimately to each
       manager’s and employee’s individual goals and priorities. If done correctly, each employee understands
       exactly how his/her job aligns with and contributes to the organization’s overall objectives – and success.
       There is also constant communication – from the top down, across departments, and from the bottom up –
       to ensure that important information is flowing to the right people at the right time.

 2.    Human capital practices are designed to support the organization’s mission and strategic objectives.
       Human capital practices with regard to organizational analysis, needs assessment, workforce planning,
       sourcing (staff or contractors), recruitment, compensation, benefits, types of appointments, performance
       management, training and development, and employee relations are all designed to ensure that the
       organization has the right people with the right skills at the right time and at the right cost to achieve its
       objectives.




                                             Final Report – November 3, 2003                                            78
Human Capital Practices at Leading Organizations

3.   Compensation and benefits are competitive with the market. Leading organizations constantly survey
     the market to ensure that their compensation and benefit levels are comparable to their most likely
     competitors for talent. Those competitors are typically other organizations in the same locale that need
     talent with the same kinds of education, skills, and competencies they need. Once an organization
     understands the market, it then decides whether to set its compensation levels to match, lead, or lag its
     competitors. This decision is typically made based on the organization’s financial situation and how
     important it is to be able to recruit and retain high-quality talent. Leading organizations also actively
     monitor their compensation and benefits programs and look for innovative ways to constrain costs without
     sacrificing their competitive position.

4.   Compensation is tied to performance. Leading organizations set specific objectives for managers and
     employees (tied to the organization’s overall objectives) and then link salary increases to their success in
     achieving those objectives. Compensation is a reward for superior performance and a motivator for future
     performance – not an entitlement for longevity. These systems can significantly improve productivity, but
     require a considerable investment by both managers and employees to establish specific objectives and to
     measure performance in a valid manner.

5.   Identifying and developing the organization’s future leaders is a top priority. Leading organizations
     are proactive in identifying and grooming future leaders. Formal succession plans serve as blueprints that
     guide training and assignments for managers who are expected to rise to high levels within the
     organization. Such plans also aid in the transfer and retention of institutional knowledge that is often lost
     with departing employees.



                                             Final Report – November 3, 2003                                         79
Human Capital Practices at Leading Organizations

6.   Improving staff competencies is an integral part of the culture. Leading organizations dedicate
     considerable resources to maintaining, updating, and broadening staff competencies (knowledge, skills,
     abilities). These organizations usually have clearly defined competency requirements for each position, a
     process to assess the staff’s current competency levels, and a wide range of training and development
     programs that include in-house programs, e-learning, university careers, and development assignments.

7.   Technology and knowledge management are used to leverage talent. Leading organizations make a
     significant investment in technology and knowledge management systems to make their people more
     productive and efficient. These investments typically take the form of networked PCs available to every
     staff member, e-mail, integrated HR and Financial management systems (ERPs), special knowledge-
     capture systems (such as shared drives and on-line libraries), employee self-service HR processes, and
     manager self-service for budget, HR, and financial management processes.

8.   Performance management is a critical function. Leading organizations view performance management
     not as a perfunctory duty but as a crucial tool for driving strategic objectives and priorities through the
     organization. As noted earlier, the organization’s overall strategic objectives and priorities cascade down to
     each department and unit and, ultimately, into the performance plans for each manager and staff member.
     Every individual in the organization understands how his/her job ties to the organization’s overall
     objectives and why his/her performance is important to achieving those objectives. Managers and staff are
     trained to analyze roles, set objectives and priorities, monitor progress, and evaluate success. Staff are
     given continuous feedback and are encouraged to succeed. Those who are not performing well are
     counseled and given an opportunity to improve. If they don’t improve, they are released from the
     organization. Managers and staff recognize that poor performers damage the effectiveness of the entire
     unit.
                                            Final Report – November 3, 2003                                           80
The Major Questions that Drove our Analysis
Based on our discussions with the Member States, we focused our analysis of OAS’ Human Capital practices
around six basic questions:


      1.    Are OAS’ current Human Capital programs and practices aligned with the organization’s mission
            and strategic objectives?

      2.    How do OAS’ compensation and benefit levels compare with similar organizations?

      3.    Are the current compensation and benefits systems serving the best interest of the organization
            with respect to recruitment, retention, and budgetary constraints?

      4.    How do OAS’ Human Capital programs compare with leading practices in the areas of
            performance management, pay-for-performance, competencies, staff development, diversity, and
            other areas?

      5.    What options should OAS consider to improve the efficiency and effectiveness of its Human
            Capital policies and programs?

      6.    What steps can the OAS take to constrain future salary and benefits increases?




                                            Final Report – November 3, 2003                                   81
Our Observations About Human Capital Practices at OAS
Question 1 - Are OAS’ current Human Capital programs and practices aligned with the organization’s
             mission and strategic objectives?

      1.    No – primarily because OAS’ mission, strategic objectives, and priorities are not clearly
            understood by managers and employees across the organization. Consequently, there is little
            foundation for the development of human resource programs that are strategic rather than simply
            tactical, such as competency analysis, workforce planning, incentive compensation, selective
            outsourcing, and change management.

      2.    However, the OAS does have some useful HR programs that meet most day-to-day needs of
            the organization. These include recruiting support, compensation and benefits administration,
            dispute resolution, job evaluation and classification, and a number of other services. Many of
            these programs are well documented and have matured over the course of several years, which has
            enhanced their effectiveness in supporting the operational needs of the organization.

      3.    Human Capital practices will need to transition from ―tactical‖ to ―strategic‖ if the
            organization is to succeed in any major transformation effort. If the OAS implements a
            strategic planning process, the organization’s Human Capital programs will need to be reviewed
            and revised to support the organization’s short-term and long-term strategic objectives. The
            Department of Human Resource Services will also need to play a key role in developing
            communications and change management plans to drive the changes throughout the organization.




                                           Final Report – November 3, 2003                                    82
Our Observations About Human Capital Practices at OAS
Question 2 - How do OAS’ compensation and benefit levels compare with similar organizations?

      1.    OAS’ compensation and benefit levels are reasonable – neither too high nor too low – when
            compared with similar employers in the Washington, D.C. area, including PAHO, the IDB,
            the World Bank, the U.S. Government, and the private sector. The benchmark analysis we
            conducted with other organizations indicates that OAS salary and benefit levels are in the middle
            of the group – lower than some and higher than others. The average salary for OAS staff is
            approximately $67,500 and the average total compensation (salary, benefits, and allowances) is
            about $88,500. These averages are consistent with other professional organizations in the
            Washington area. OAS’ benefit load for pension, health, life, and disability insurance is about
            23%, and its benefit load including allowances is approximately 31%. These benefit numbers are
            also comparable to other professional organizations. We believe OAS’ current position in the
            middle of the market is appropriate to remain competitive for the types of skills OAS needs, and
            to manage staff costs. A detailed analysis of OAS compensation and benefit expenditures is
            included in APPENDIX J.

      2.    OAS’ annual salary structure adjustments have been reasonably consistent with the
            benchmark group. Chart III in APPENDIX J shows that over the course of the last five years
            (1999 – 2003), salary scale increases (including post allowance) for OAS and PAHO professional
            staff have averaged 4.91%. This is approximately 1.25% higher than the other benchmark
            organizations: World Bank, IDB, the U.S. Government, and the private sector. This difference is
            not significant, however, given the fact that OAS does not offer incentive compensation (bonuses)
            as do the other benchmark organizations. The increase to the OAS General Service structure
            averaged .85% below the benchmark group.

                                            Final Report – November 3, 2003                                     83
Our Observations About Human Capital Practices at OAS

   3.   The types of benefits offered by the OAS are also very comparable to similar organizations.
        All of the benchmark organizations offer a full range of high quality benefits to their employees.
        The type of benefits offered by the OAS is very similar to the group, and OAS appears to be
        managing benefit costs very effectively.

        •     OAS provides a high quality benefits plan for its employees. OAS offers high quality
              medical, dental, life, and disability insurance to its employees, as well as a defined benefit
              retirement plan. The coverage provided by these plans are fairly similar across the
              benchmark group, as are employee contributions to participate in the benefits. Chart IX in
              APPENDIX J outlines the major OAS benefits.

        •     OAS’ costs for benefits are lower than industry averages. At an average cost of $5,205
              per employee, OAS’ medical and prescription costs are lower than local and national
              average costs. The OAS has managed to avoid the trend of double-digit increases in
              medical costs over the past two years. During this period its costs have increased by 3%
              and 5% respectively. Comparative benefits cost data is illustrated in Charts X, XI, and XII
              in APPENDIX J.

        •     OAS’ expatriate benefits are competitive when compared with similar organizations.
              The OAS provides a variety of benefits for expatriates who are given certain appointments.
              These benefits are comparable to those offered by similar organizations. A summary of
              expatriate benefits is included in Chart XIII in APPENDIX J.


                                         Final Report – November 3, 2003                                       84
Our Observations About Human Capital Practices at OAS
Question 3 - Are the current compensation and benefits systems serving the best interest of the organization
             with respect to recruitment, retention, and budgetary constraints?

      1.     The OAS compensation and benefit programs are serving the organization’s interests. As
             discussed earlier, OAS’ salaries and benefits are reasonable in comparison with the benchmark
             group and the average cost per employee for both salary and benefits are comparable to other
             employers in the Washington area. Further, DHRS reports that the organization is not
             encountering difficulties recruiting and retaining employees in any area. At 8.1%, OAS’ turnover
             is comparable to the average of the benchmark group. An illustration of turnover across the
             benchmark group is provided in Chart XX in APPENDIX J. The only major area of concern we
             identified is the difficulty OAS has had in recent years projecting the size of the annual UN pay
             structure and post adjustment. We recommend that OAS work much more closely with the UN in
             the future to more accurately project the increase for budgeting purposes.

      2.     The use of term contracts is also serving the organization’s interests. Salary and benefit data
             indicate that term contractors are cost-effective for the OAS in terms of average salary and benefit
             costs compared to career employees. Further, we were told by the vast majority of managers we
             interviewed that there is no significant difference in performance or work quality between contract
             staff and career staff. Accordingly, the decision to phase out the career staff was a good one. We
             believe OAS should continue to use contract staff to the maximum extent possible, relying on
             long-term staff only where continuity and corporate memory are critical.




                                             Final Report – November 3, 2003                                        85
Our Observations About Human Capital Practices at OAS
Question 4 - How do OAS’ Human Capital programs compare with leading practices in the areas of
             performance management, pay-for-performance, competencies, staff development, diversity, and
             other areas?

    1.    Performance management is a strategically important management tool in leading organizations, yet
          in the OAS performance management appears to be a low management priority. The OAS has a
          policy and procedures regarding employee performance management; however a substantial number of
          employees do not receive performance feedback. In 2003, only 35% of eligible employees received an
          appraisal by the appraisal deadline, in 2002 only 43%, and in 2001 only 68%. There are three major
          distinctions in how employee performance is managed at the OAS and at high-performing organizations.
          These distinctions may likely contribute to the low priority exhibited by the OAS:
          1. High-performing organizations hold managers accountable for conducting performance appraisals, and
              discipline them for non-compliance; the OAS does not.
          2. High-performing organizations administer pay increases based upon the results of the performance
              appraisal; OAS staff members receive a step increase even if an appraisal has not been conducted.
          3. High-performing organizations train managers and supervisors on how to conduct performance
              appraisals; the OAS does not.

    2.    The link between pay and performance is clear at leading organizations; however, it is very obscure
          at the OAS. Linking pay and performance is a standard practice at leading organizations. As illustrated in
          Chart IV in APPENDIX J, all of the organizations in our benchmark group have a merit based pay system
          that tie pay increases to employee performance. On the other hand, OAS’ pay system fails to create a
          discernable link between pay and performance. As noted above, employees receive a pay increase even in
          the absence of receiving a performance evaluation. The current pay system may actually provide an
          incentive for poor performers to stay with the organization.

                                            Final Report – November 3, 2003                                            86
Our Observations About Human Capital Practices at OAS
   3.   Leading organizations identify competencies that drive organizational performance and
        weave these into their recruiting, employee development, and performance management
        programs. ―Competencies‖ are the specific knowledge, skills, abilities, and behaviors an
        employee needs to be successful in his/her job. The OAS has identified some competencies that
        are used in the hiring and the evaluation process. This is a step in the right direction, but it is
        difficult to trace a core set of competencies from the hiring through the evaluation and
        advancement processes. Further, the absence of a clear mission and strategy makes it difficult for
        the organization to develop competencies that can be correlated to organizational results.

   4.   Staff development is a strategic human capital practice in leading organizations, yet the OAS
        does not commit sufficient financial resources to develop the staff. Leading organizations
        recognize that a link exists between the investment in employee development and organizational
        results. Consequently, they provide employees with defined career paths, specialized training
        opportunities, and ongoing consultation on career development. The OAS, on the other hand,
        provides few resources to aid with career development. Career paths are not defined, performance
        feedback is sparsely provided, and less than $90 per person is allocated to the budget for training
        purposes.

   5.   Leading organizations value and actively promote diversity in their workforce, as does the
        OAS. The OAS has a very diverse workforce, with a large percentage of females and individuals
        from a wide range of cultures. No bias is evident in its recruiting, compensation, and promotion
        practices. The proportion of females in almost all categories of employment has risen steadily
        over the past few years, and two resolutions have been passed to increase the promotion of women
        into senior management roles. A breakdown of staff at OAS by gender appears in the Personnel
        Register included in APPENDIX G.
                                        Final Report – November 3, 2003                                       87
Our Observations About Human Capital Practices at OAS
Questions 5 - What options should OAS consider to improve the efficiency and effectiveness of its Human
              Capital policies and programs?
Question 6 - What steps can OAS take to constrain future salary and benefit increases?

 Because Questions 5 and 6 are closely related, we have combined them in one section. Following is a summary of
 the options OAS should consider to improve its Human Capital practices and to constrain costs for the future. A
 detailed discussion of each option appears on the pages the follow.

 Summary of Options:

 1. Improve the performance management system to use it as a tool for strategic management
 2. Link compensation increases for managers and employees more closely to performance
 3. Implement a management training program
 4. Review potential cost-saving options for employee benefits
 5. Offer targeted training and development opportunities to enhance staff’s competencies
 6. Facilitate career advancement
 7. Conduct an audit to ensure that OAS post classifications are consistent with the UN




                                             Final Report – November 3, 2003                                       88
Option 1: Improve the Performance Management System to Use
          It as a Tool for Strategic Management
Description:

One of the most effective ways for any organization to improve productivity is to effectively manage employee performance. The
OAS has a performance appraisal system in place, but it is not routinely and consistently applied throughout the organization.
Employees at all levels should receive guidance on standards of performance and timely and constructive feedback. Also, pay
practices should be linked to the performance management program. Supervisors should be held accountable for delivering timely
and constructive appraisals, and training should be provided to managers, supervisors, and employees in the appraisal process.




  Potential Advantages:                                                Potential Disadvantages:
   Clearly links each employee’s performance goals to
                                                                        Effective performance management requires a commitment
    the OAS’ overall strategic objectives.
                                                                         of time by executives, managers, supervisors, and staff.
   Institutionalizes a culture that values employee effort
    and contribution towards the achievement of                         The current performance management system will probably
    organizational goals.                                                need to be redesigned to be more strategic than tactical.

   Creates a platform for career development.                          Training for all executives, managers, supervisors, and staff
                                                                         will require time and expense.
   Contributes to the development of critical people
    management skills for supervisors.




                                                    Final Report – November 3, 2003                                                      89
Option 1: Improve the Performance Management System to Use
          It as a Tool for Strategic Management
Action Steps for Implementation Plan:
1) Create a committee of DHRS, managers, staff, and the Staff Association to review the current performance management system
   and develop a plan to make it more effective and to link each employee to the OAS’ overall objectives and priorities.
2) Focus performance appraisal on competencies and measuring results.
3) Develop a process to train all managers, supervisors, and employees on the process.
4) Make timely and effective performance management a critical requirement for all managers and supervisors.
5) Use performance appraisals as a primary factor in decisions regarding compensation, extending appointments, advancement, and
   retention (removal).
6) Monitor the process the first year and provide remedial assistance to managers and employees having difficulty.




Timeframe for Implementation Plan:
                                            Improve Performance Management System
          Create committee

                       Focus performance appraisals on competencies (on-going)

                                                  Develop a process for training all staff

                                                          Make timely and effective performance management a requirement
                                                                               Use the performance appraisal in
                                                                               compensation and advancement decisions (on-going)

                                                                                             Monitor the process (on-going)
   0          1              2          3             4              5              6           7             8               9    10

   Timeline (Months)




                                                    Final Report – November 3, 2003                                                     90
Option 1: Improve the Performance Management System to Use
          It as a Tool for Strategic Management
  Associated Costs


  There is little direct cost associated with this option. It will take some time to develop a supervisory training program, but this can
  be done in house at minimal expense. Developing a new performance management process could involve outside consultants.




             Potential Barriers                                                          Critical Success Factors




Management resistance to following the policy.

                                                                     • Visible management support.

                                                                     • Effective training.

Failure to penalize supervisors who do not follow the
policy.




                                                     Final Report – November 3, 2003                                                        91
Option 2: Link Compensation Increases for Managers and
          Employees More Closely to Performance
Description:

The OAS currently administers pay increases with little linkage to employee job performance. While the Staff Rules require
administering increases by considering performance, the rule is routinely ignored. Consequently, the current pay practices have
little impact on motivation and productivity. Therefore, the first option offered to the OAS is simply to enforce Staff Rule 103.4,
and grant step increases only when ―performance and conduct have been satisfactory in accordance with the corresponding annual
performance evaluation.‖ This is a major step forward in leveraging human capital to increase productivity and efficiency, and is a
practice used by leading organizations and the benchmark group.



  Potential Advantages:                                                 Potential Disadvantages:
   Employee motivation to work hard and contribute to
                                                                         Employees who do not receive an evaluation would be
    the goals of the organization will improve.
                                                                          unfairly denied a pay increase.
   Employees and supervisors will place a greater value
    on the performance management and compensation                       An investment in training will be necessary to assist
    systems.                                                              supervisors in conducting performance appraisals.
   The organization will increase the return on its
    investment in human capital.
   Marginal and poor performers will leave the
    organization, which will create promotion
    opportunities for better performing employees.
   As marginal and poor performers leave the
    organization, opportunities are created to bring new
    talent into the organization.
   Managers will take a more active role in managing
    performance and the development of their staff.




                                                  Final Report – November 3, 2003                                                     92
Option 2: Link Compensation Increases for Managers and
          Employees More Closely to Performance
Action Steps for Implementation Plan:
1) Develop a policy that ties managerial compensation, in part, to compliance with Staff Rules 103.4, Step Increases, and 105.9, Work
   Performance Evaluation.
2) Develop a managerial training program on performance management and pay administration.
3) Deliver training program.
4) Monitor results during the annual evaluation cycle.




Timeframe for Implementation Plan:
                                                  Link Pay with Performance

       Develop policy that ties pay increases to the completion of performance appraisals
                   Develop managerial training program

                                  Conduct training


                                                                              Monitor results during 2004 performance evaluation cycle



   0           3              6               9           12           15            18            21            24            27        30

   Timeline (Months)




                                                         Final Report – November 3, 2003                                                      93
Option 2: Link Compensation Increases for Managers and
          Employees More Closely to Performance
  Associated Costs


  The primary cost for this option will consist of expenses incurred for designing and delivering the training program. The lowest
  cost alternative is to have the training developed by OAS staff and delivered on-site at the OAS. If adequate resources are not
  available a consultant may be used to design and deliver the training. Additional costs include managers’ salaries while attending
  the training, and the cost of materials provided as part of the training.




              Potential Barriers                                                      Critical Success Factors


 Supervisors who are unwilling to honestly evaluate               • Clear communication with employees about the link between
  their staff.                                                       performance, organizational results, and employee compensation.

                                                                   • Educating employees on what constitutes acceptable performance.

                                                                   • Visibly supportive leadership and management that is willing to
                                                                     take action if supervisors do not comply with policy.
 Leadership that is unwilling to enforce the rules and
  discipline supervisors who disregard policy.
                                                                   • Effective and timely supervisory training on conducting
                                                                     performance appraisals and pay administration.

                                                                   • Ongoing support and coaching for managers tasked with
                                                                     evaluating performance and administering pay.
• Lack of money or inadequate resources available for
  training purposes.


                                                    Final Report – November 3, 2003                                                    94
Option 3: Implement a Management Training Program
Description:

Effective management is a primary driver of productivity and organizational success. Our research indicated that while most OAS
managers and supervisors have the technical skills needed for their jobs, few have been trained (or are adept) in effective project
management, financial management, budgeting, and managing human resources. Managers want this training and staff agree that it
is needed. Course content may include instruction on effective leadership skills, communication skills, project management,
budgeting and financial management, staff retention, appraising employee performance, and time management. The organization
should require completion of the training as a prerequisite to being promoted into a managerial or supervisory position.



  Potential Advantages:                                                Potential Disadvantages:
   Can have a direct impact on improving organizational
                                                                        Some of the current managers may not possess the aptitude
    performance.
                                                                         to acquire supervisory skills, prompting hard decisions on
                                                                         what to do with them.
   Can be a cost effective way to develop competent
    managers and supervisors.
                                                                        Some managers may feel that the training initiative is
   Training can be custom tailored to the specific needs                indicative of the organization placing blame on them for its
    of the organization.                                                 problems.

   Training will lead to greater productivity and increase             A comprehensive training program taxes precious time on
    staff morale and retention.                                          managers who already have a busy schedule.

   Can be an effective management recruitment and
    retention tool.                                                     Money is required to develop the training programs.

   Allows the future leadership of the organization to
    network and build relationships with each other.

                                                   Final Report – November 3, 2003                                                      95
Option 3: Implement a Management Training Program
Action Steps for Implementation Plan:
1)     Announce to managers that a new training initiative is being developed.
2)     Identify target audience for the training.
3)     Identify the competencies needed to be an effective manager at the OAS.
4)     Conduct a needs assessment to identify gaps between required and existing competencies
5)     Create training programs that develop and strengthen these competencies.
6)     Schedule and deliver training programs.
7)     Assess results.




Timeframe for Implementation Plan:
                                                  Implement Management Training Program
               Announce development of training initiative

                  Identify target audience for training

                                       Identify essential competencies

                                                                  Conduct a needs assessment       Develop training programs (ongoing)

                                                                                                                   Deliver training and
                                                                                                                   assess results (ongoing)


   0          1                2              3             4            5            6        7               8             9            10

   Timeline (Months)




                                                          Final Report – November 3, 2003                                                      96
Option 3: Implement a Management Training Program
  Associated Costs


  The primary cost associated with this option is tied to the development of the training program. This is a specialized task and may
  require the assistance of outside consultants or a training vendor. There will also be a cost for training materials and a facility to
  conduct the training. Indirect costs include labor costs for the time that individuals spend in the classroom.




             Potential Barriers                                                         Critical Success Factors


 Lack of internal expertise in assessing training needs            • Proper identification of competencies that translate into effective
  and developing training curriculum.                                 management.

                                                                    • Visible support for the program from senior management.

                                                                    • Integration of this program with the organizations performance
 Lack of support from management in identifying                      evaluation program.
  needs and evaluating program design.
                                                                    • Professionally designed and facilitated training programs.




 Lack of interest from top management in supporting
  program goals and objectives.


                                                    Final Report – November 3, 2003                                                         97
Option 4: Review Potential Cost-Saving Options For Employee
          Benefits
Description:

A wide range of options are available for constraining future increases to benefit costs. These options are outlined on the following
page.

NOTE: A glossary of terms used on the following page is located at the end of APPENDIX J.




                                                   Final Report – November 3, 2003                                                      98
  Option 4: Review Potential Cost-Saving Options For Employee
            Benefits
            Strategy                     Potential Savings/(Costs)             Considerations (Advantages/Disadvantages
                                                                                           /Implementation)

Implement a Consumer Driven            Estimated savings of approximately   Timing for bidding, negative impact to employees, major
Healthcare plan                        8-10% of medical premium or          communications needs
                                       $385,000-$481,000 annually.          This would be a significant departure from the traditional
                                                                            managed care plan.
Introduce a 3 tier prescription drug   Estimated savings of approximately   Negative impact to employees, communications needs
plan going from $10/$12 for Retail     5-7% of medical premium or           This benefit would be less rich than the peers, however a 3-
and Mail Order to $10/$20/$30          $240,000-$337,000 annually.          tier benefit is the industry trend.
Retail $20/$30/$60 Mail Order

Increase deductibles from $0/$100      Estimated savings of approximately   Negative impact to employees, communications needs
to $250/$500                           6-8% of medical premium or           This benefit would remain competitive with the peers.
                                       $289,000-$385,000 annually.

Increase coinsurance levels from       Estimated savings of approximately   Negative impact to employees, communications needs
100/80 to 90/70                        2-4% of medical premium or           This benefit would remain competitive with the peers.
                                       $96,000-$192,000 annually.
Increase employee contributions        Varies                               Negative impact to employees, communications needs
                                                                            This benefit may be less rich than the peers.
Market plans                           Varies                               Timing for bidding, employee disruption

Offer a Lifecycle Account              Estimated cost of approximately      Employee relations tool to balance ―takeaways‖; some
                                       $350,000, assuming a $500/year       administrative requirements
                                       contribution to the account.

                                                    Final Report – November 3, 2003                                                        99
Option 5: Offer Targeted Training and Development
          Opportunities to Enhance Staff Competencies
Description:

OAS should consider establishing a comprehensive training and development plan for the organization that 1) identifies where staff
competencies are weakest, and 2) creates a series of training initiatives to improve those areas most needed. Initiatives may include
in-house training, e-learning, university courses, self-study, and development assignments – depending on the nature of the need and
the availability of funds.




  Potential Advantages:                                                 Potential Disadvantages:
   Maximizes the productivity of individuals who are
                                                                         Staff who are not eligible for training may feel that the
    most critical to the success of the organization.
                                                                          organization does not value them.
   Serves as a tool to retain the organization’s most
    critical employees.

   Serves as a reward for employees who perform the
    most critical tasks for the organization.

   Increases the likelihood that the most critical jobs in
    the organization will stay filled.

   Provides an incentive for employees to work hard and
    grow into one of these positions.




                                                    Final Report – November 3, 2003                                                     100
Option 5: Offer Targeted Training and Development
          Opportunities to Enhance Staff Competencies
Action Steps for Implementation Plan:
1) Identify posts that have a major impact on the success of the organization.
2) Identify the knowledge, skills, and abilities (KSA’s) needed to perform well in the post.
3) Identify the current incumbents in the posts and the individuals who are anticipated to grow into the posts.
4) Identify gaps between the KSA’s of the incumbents and other individuals and those required in the posts.
5) Develop training programs that will bridge the gaps between existing KSA’s and those needed for the critical posts.
6) Create career development and training programs for individuals expected to grow into the posts.
7) Facilitate training for individuals currently serving in the posts.
8) Monitor results of training and adjust accordingly.




Timeframe for Implementation Plan:
                                                   Offer Targeted Training and Development
               Identify critical posts

                                         Identify KSA’s required for the posts                                   Rollout training for current
                                     Identify current and future occupants of the posts                                          incumbents

                                                                      Gap analysis

                                                                                               Develop training curriculum

                                                                                               Create career development plans



   0          2              4                 6             8              10        12      14           16            18             20

   Timeline (Weeks)


                                                            Final Report – November 3, 2003                                                     101
 Option 5: Offer Targeted Training and Development
           Opportunities to Enhance Staff Competencies
  Associated Costs


  Primary costs include 1) DHRS time to conduct a training needs assessment and to develop a training plan, 2) staff time to
  participate in the training, and 3) training delivery expenses.




              Potential Barriers                                                         Critical Success Factors


 Failure to correctly identify critical posts in the                • Proper identification of the skills required for the organization’s
  organization.                                                        most critical jobs.

                                                                     • Training recipients and their managers must see value in the
                                                                       training.

 Resistance to training by people targeted as prospects             • Opportunities to apply the skills acquired in the training must be
  for the training program.                                            present in the job.




 Lack of managerial support for the investment in the
  training program.


                                                        Final Report – November 3, 2003                                                      102
Option 6: Facilitate Career Advancement
Description:
At the present time there are no defined career paths and few promotional opportunities for OAS employees. Defined career paths
are useful for replacement planning purposes and are the foundation for employee training and development plans. Career paths and
promotional opportunities help to attract and retain motivated and career-minded individuals to the organization.

A complete review of job titles and career paths would be highly beneficial to OAS. A method for classifying jobs into fewer titles
is needed, as is a policy that facilitates growth opportunities based upon job performance. Formal career planning tools should be
developed and integrated into the new hire orientation and performance management process, and skills inventories and succession
plans should be developed and maintained.


  Potential Advantages:                                                 Potential Disadvantages:
   Can be an excellent recruitment and retention tool.
                                                                         Time for DHRS and managers to review the organization
                                                                          and develop career paths (where possible).
   Employee commitment and motivation are increased.

   Reduces the period of time that a newly created or                   Employee expectations may be unreasonably elevated
    vacated post is unfilled.                                             when, in fact, advancement opportunities at OAS will
                                                                          always be limited due to the size and nature of the
   A pool of highly qualified candidates is readily                      organization.
    available to fill vacant posts.

   Training and development plans are easier to create
    and are much more cost effective.

   If done correctly, much of the responsibility for career
    development can be placed upon the employee.




                                                    Final Report – November 3, 2003                                                   103
Option 6: Facilitate Career Advancement
Action Steps for Implementation Plan:
1) Review organization and map career paths, where possible.
2) Develop career planning tools (skills inventories, modified performance appraisal, new hire orientation, training programs).
3) Train managers on how to assist employees with career development.
4) Train employees on how to manage their career development.




Timeframe for Implementation Plan:
                                             Facilitate Career Advancement
                                           Conduct a job audit and create job families

                                                 Map career paths throughout the organization

                                                                           Develop career planning tools

                                                                                         Train managers and supervisors

                                                                                                      Train employees

   0          1            2           3                4              5               6             7             8      9       10

   Timeline (Months)




                                                      Final Report – November 3, 2003                                                  104
Option 6: Facilitate Career Advancement
  Associated Costs


  As with most of our other human capital options, labor will represent the primary cost to implement this option. A substantial
  amount of time will be needed to inventory and categorize positions, create and implement career development tools, and train
  managers and employees.




             Potential Barriers                                                      Critical Success Factors


 Project participants lack expertise in developing job           • Examples of success – e.g., promotions, can be observed by
  families and career paths.                                        employees.

                                                                  • Managers and supervisors actively encourage employees to use
                                                                    career development tools.

 Inadequate or overly-complicated career planning                • Career development becomes part of the organizations culture.
  tools result in employees not using them.
                                                                  • Career development is integrated with other human capital
                                                                    programs, e.g., training, recruiting, and performance management.



 Career planning is undervalued by employees and/or
  supervisors.


                                                    Final Report – November 3, 2003                                                     105
Option 7: Conduct an Audit to Ensure that OAS Post
          Classifications are Consistent with the UN
Description:
Even though the UN and the OAS use the same job classification standards, there is little coordination to ensure that the standards
are applied consistently across the two organizations. OAS should conduct a benchmark audit with PAHO to jointly review a cross
section of jobs within the two organizations. Particular emphasis should be placed on determining how points are assigned to posts
during the classification process and how posts are assigned to grades. Posts that are similar in both organizations should be
identified and used as benchmarks for comparison every year or two.




  Potential Advantages:                                                 Potential Disadvantages:
   Confirms that the OAS is applying the UN
                                                                         Could be costly to the OAS if it is discovered that the OAS
    classification system appropriately.
                                                                          is classifying posts lower than the UN for the same post.
   Helps to maintain parity with the UN.
                                                                         This can be a time consuming task and will require some
   Increases the confidence of all OAS stakeholders that                 financial resources to complete.
    parity is important to the organization, which will
    have a positive impact on employee morale.




                                                  Final Report – November 3, 2003                                                       106
Option 7: Conduct an Audit to Ensure that OAS Post
          Classifications are Consistent with the UN
Action Steps for Implementation Plan:
1) Develop goals, objectives, and methodology for post classification audit.
2) Form an audit team that consists of the post classifiers from the OAS and PAHO, and a third party consultancy that will manage the
   audit.
3) Obtain position descriptions from the two organizations. Some of the descriptions should be for posts that exist in both
   organizations.
4) Conduct the audit.
5) Develop interim audit report and share with post classifiers in both organizations.
6) Conduct further analyses based on feedback from classifiers.
7) Develop final report for post classifiers in both organizations and management in the OAS.
8) Develop plan for implementing any changes as a result of the audit.


Timeframe for Implementation Plan:
                                             Audit OAS and UN Post Classifications
               Develop audit goals, objectives, and methodology
               Form audit team
                            Obtain post descriptions
                                                                  Conduct the audit
                                                                        Develop interim report
                                                                               Conduct additional audit
                                                                                      Develop final report
                                                                                                                  Implement changes
   0          2            4             6              8              10             12           14        16             18        20

   Timeline (Weeks)




                                                       Final Report – November 3, 2003                                                     107
 Option 7: Conduct an Audit to Ensure That OAS Post
           Classifications are Consistent with the UN
  Associated Costs


  Improved objectivity during the audit will be achieved if a consulting firm is retained to conduct the initial audit. Thus, the
  primary cost for an audit of this nature will be for consulting fees. However, additional costs will be incurred if positions are
  reclassified as a result of the audit. This cost could be substantial if a large number of positions are reclassified to a higher grade.
  If the OAS and PAHO identify benchmark positions and agree to collaborate on future parity reviews, the reviews can be
  conducted by OAS and PAHO staff members, and the cost for the audit will be negligible.



              Potential Barriers                                                          Critical Success Factors


Lack of available documentation, such as post                         • Consultancy managing the project is very knowledgeable about
descriptions, that is needed to conduct the audit.                      point factoring methods of job classification.

                                                                      • Job descriptions and other related information are easy to obtain.

                                                                      • Job classifiers in both organizations are accessible.
Failure of either organization to dedicate the time and
                                                                      • OAS management and political body are committed to
resources required to conduct the audit.
                                                                        maintaining pay parity, and supporting the reclassification of posts
                                                                        (up or down) where merited.



Lack of money available to conduct the audit or to
reclassify posts that are graded low compared to similar
posts at the UN.


                                                      Final Report – November 3, 2003                                                          108
Technology
  • Reorganize IT Functions
  • Streamline Reporting and Data Integrity
  • Implement Automation and Employee Self Services




                                   Final Report – November 3, 2003   109
Technology: Reorganize IT Functions

Observations:
• IT functions, including networking/security, support, and Oracle administration, are located in several different areas
  within the Secretariat of Management, including the Department of IT and Facility Services, DMAPPS, and the
  Department of Financial Services.
• There is no clear ―owner‖ of the Oracle system who coordinates patches, protocols, updates, and other system-related
  functions.




                      Background                                                                   Issues

 Currently, supervision of technology functions within                     Lack of centralized leadership leads to
  the GS is located in several areas:                                        inefficiencies, task redundancy, lack of strategy, and
     Oracle – supported by two areas: DMAPSS and                            inconsistent communication with end users.
       DFS.                                                                 Decisions regarding resource allocation and system
     IT – hardware, networking, infrastructure, etc., are                   upgrades (such as patches) are currently being made
       managed separately in an organizational unit                          in the database administration function without
       within Facilities Management.                                         significant interaction with the applications
 There is no position charged with overall responsibility                   function.
  and ownership for the management of information
  technology.
 End user requests related to Oracle often pass through
  several areas supporting the Oracle system.




                                                  Final Report – November 3, 2003                                                     110
Technology: Reorganize IT Functions
Description:
Redesign the IT function to incorporate all technology-related functions together under the leadership and coordination of a Director
of Information Technology. In addition, implement a consolidated leadership structure around the Oracle system by aligning all
Oracle support units to gain efficiencies and increase collaboration. The activities of the Oracle functional areas would be closely
coordinated with the Financial Reporting and Policy Division of Financial Services to support financial statement and Specific Fund
custom report production and certification. The General IT Services Division would consist of the technology related areas of the
current Department of Technology and Facility Services.




  Advantages:                                                           Disadvantages:
   Placing the database and applications functions in one               The creation of the IT Department would add an additional
    Department would enable the support and                               layer of management within the Organization.
    maintenance of the Oracle system to be streamlined,
    as well as establishing a single line of responsibility
    for Oracle.
   All IT and systems requests could be filtered through a
    single area and assigned to the appropriate group
    (Oracle or IT Services) that would manage resource
    allocation and prioritization of IT initiatives.




                                                  Final Report – November 3, 2003                                                       111
Technology: Reorganize IT Functions
                                              Current IT Structure
                                       All IT support functions are provided from
                                         three different Departments within the
                                              Secretariat for Management.




    Department of Financial Services           DMAPPS ―owns‖ the Oracle                Non-Oracle IT functions are
     provides Oracle reporting and            application, providing DBA and          provided in the Department of
          transaction services.             application services in two different   Technology and Facility Services.
                                                    organizational units.           These function include networking,
                                                                                     security, and general IT support
                                                                                                 services.




                                        Final Report – November 3, 2003                                                  112
Technology: Reorganize IT Functions
                                                       Potential IT Structure
                                            Information Technology services consolidated
                                              under one area tasked with all IT functions,
                                          including Oracle and general IT functions. The IT
                                               Services Department would reside in the
                                             Secretariat for Management or its successor
                                                             organization.




   The Oracle System Services area would consist of the                       The technology related areas within the current Department
 Database Applications Administration and Security group                        of Technology and Facility Services would be grouped
 and the Applications Analysis Development and Support                           under the Information Technology Department in the
 group from DMAPSS. In addition, the Operations group                          General IT Services Area. The remaining facility related
  from the Department of Financial Services is included.                          areas would be transitioned to the Conferences and
                                                                                                Meetings Department.




                                                     Final Report – November 3, 2003                                                       113
Technology: Reorganize IT Functions
Action Steps for Implementation Plan:
1) As part of the overall organizational restructure, shift appropriate functions within DMAPPS, Financial Services, and Technology
   and Facility Services under one organizational unit headed by a Director of Information Technology who would need to be
   recruited and selected.
2) Develop protocols, roles, and responsibilities for the new IT Department, including protocols for patches, specific position
   descriptions, and lines of reporting.
3) Train personnel for new roles, if necessary (most roles will simply be shifted—there should not be a significant shift in skill sets
   required).




Timeframe for Implementation Plan:

                                                      Reorganization of IT Functions


                 Shift Functions into New Structure and Recruit Director

                                Develop Protocols and Roles and Responsibilities

                                      Train Personnel (if necessary)

 0           3              6               9             12            15         18        21         24           27            30
     Timeline (Months)

                                                           Final Report – November 3, 2003                                                114
  Technology: Reorganize IT Functions
Implementation Costs

  Direct costs associated with the reorganization of the IT functions include:
     Training costs associated with any changes in roles and responsibilities for specific personnel.
     The HR and facilities management costs related to organizational change, including the recruitment and hiring of a Director.

  Indirect costs associate with the reorganization of the IT functions include:
      The transition associated with an organization change relating to the shifting of resources and training of staff as well as a
         possible period of downtime and inefficiency as staff ascend the learning curve of the new structure.




                  Barriers                                                               Critical Success Factors


                                                                     Involve all parts of the IT operation in the transition and make
 The reorganization could have a short term negative                  clear the reorganization goals and the expectations of the staff.
 impact on morale and productivity.                                  Obtain feedback from IT and other affected staff and modify plans
                                                                      as necessary to engage them in the process.




                                                     Final Report – November 3, 2003                                                      115
Technology: Streamline Reporting and Data Integrity
 Observations:
 In recent years, reporting issues have caused concerns and raised questions about the flexibility of the Oracle system and
 the integrity of its data. In addition, many integrity issues can be attributed to the periodic module updates, which are
 not formally communicated to the users of the system. However, during the past several months, many of these issues
 have been identified for resolution and the process seems to be stabilizing.




                        Background                                                              Issues

  There are few procedures in place for requirements                   As a result of early issues with the system, the
   gathering, authorization, and distribution of new Oracle              current version of Oracle is not universally trusted
   reports.                                                              and utilized by the OAS user community.
  Each new donor, grant, or award typically has unique                 The lack of coordination in the development of
   reporting requirements that require customized financial              Oracle reports leads to untimely reporting and
   reporting.                                                            perceived inaccuracies by the technical area
  There is little coordination among the areas involved in              personnel requesting the report.
   project management and report generation.                            Report requirement gathering tends to be done in a
  Personnel tend to maintain ―shadow‖ accounting                        reactive fashion during the course of the project
   systems to track project data due to a perception that the            lifecycle.
   data presented in the Oracle system is not accurate or               A commonly held perception throughout the
   timely.                                                               Organization is that the reports produced by the
  There is currently no formalized process for notifying                Oracle system contain inaccurate data.
   end users of data certification schedules.




                                                 Final Report – November 3, 2003                                                116
Technology: Streamline Reporting and Data Integrity
Description:
Implement procedures to streamline the reporting process and encourage adherence to reporting requirements by implementing
improvements in the following areas:
 • When a grant is established, coordinate the requirements gathering and report design activities of the key areas involved in
   reporting (Technical Areas, Operations, and FRPD).
 • Document and communicate the timing of data flow between modules to dispel the perception of inaccurate data.
 • Initiate a marketing campaign to sell the value of the system to the user community in order to rebuild its reputation and regain
   the confidence and trust of end users.
 • Establish and deliver consistent and clear message to the end user community on how the system should be used and who the key
   contacts are for various requests (e.g., reporting requirements, issue resolution, grant creation, etc.).
 • Implement a formal and scheduled data certification process and establish communication policies to announce to end users when
   the data is certified.
 • Design and implement training programs for the technical area staff on the proper use of the system.


 Advantages:                                                           Disadvantages:
  Reporting requirements would be solidified and
                                                                        Reporting data cannot always be obtained real time due to
   agreed to earlier in the project lifecycle, resulting in a
                                                                         the updates that must occur in the system.
   proactive approach to report development.
  Acceptance and trust of the Oracle system would be                   There will be a learning curve associated with the use of
   improved as a result of the understanding of the data                 the new protocols and procedures.
   discrepancies between modules.




                                                     Final Report – November 3, 2003                                                   117
Technology: Streamline Reporting and Data Integrity
Action Steps for Implementation Plan:
1) Develop a communications plan and protocols for new reporting procedures and other system information.
2) Implement communications plan and protocols.
3) Develop pre-defined common business areas within Oracle Discoverer to enhance ad hoc reporting capabilities.
4) Train end users and other related staff on new protocols and procedures for handling reporting and data reconciliation.




Timeframe for Implementation Plan:

                                          Streamline Reporting and Data Integrity


         Develop Communications Plan and Protocols

                 Implement Communications Plan and Protocols
                       Develop Pre-Defined Common Business Areas
                             Train End Users

 0          3            6            9              12         15           18           21           24           27       30



                                                     Final Report – November 3, 2003                                              118
  Technology: Streamline Reporting and Data Integrity
Implementation Costs
  Direct costs associated with streamlining the reporting and data integrity procedures include:
     The costs involved in training and educating stakeholders of the new policies on reporting requirements and structure as well as
       the data validation and reconciliation protocol.
     The costs of creating pre-defined common business areas using the Oracle’s Discoverer tool to improve ad hoc reporting.

  Indirect costs associated with streamlining the reporting and data integrity procedures include:
      None




                  Barriers                                                               Critical Success Factors



 The lack of upfront understanding of the definition of              Modify internal or vendor specific training to educate end users
 database tables and information.                                     and report writers on specific report creation routines to increase
                                                                      understanding.




                                                     Final Report – November 3, 2003                                                        119
   Technology: Implement Automation and Employee Self Services


Observations:
• There are applications and functions within Oracle that are not currently used; however, if implemented, they could increase
  productivity. These included automating certain transactions and utilizing Employee Self Service for certain functions, e.g.,
  personal profiles, travel requests, benefits, expenses, and other HR-related requests.




                           Background                                                               Issues


   Currently, personnel submit requests to Oracle support areas for     The manual data entry of system change requests
    all updates to the Oracle system. The requests are then               consumes time and resources and increases the risk of
    manually processed and entered into the systems.                      data entry errors.
   All expenses for common costs are handled by Accounts                The current methods for processing common cost
    Payable and are processed manually using internal transfers.          payments require manual data entry, again consuming
                                                                          time and resources and increasing the risk of data entry
                                                                          errors.




                                                     Final Report – November 3, 2003                                                 120
Technology: Implement Automation and Employee Self Services
Description:
Implement employee self service and automation where applicable within the Oracle system to streamline processes and reduce
costs. Areas to address include:
• Activate and customize self service functions within Oracle 11i that are currently available in the standard package.
• Streamline common cost payments by eliminating the internal transfers between the organizational areas and AP as well as
  establish automated payment schedules with the General Ledger.




  Advantages:                                                        Disadvantages:
   Self service functions would allow for a reduction in             There may be some costs associated with the
    process time as well as a reduction of resources                   implementation of the Employee Self Service and
    required to make updates to Oracle data. Self services             automation.
    come standard within the Oracle environment and are               Employee Self Service would decrease the amount of
    relatively easy to implement and maintain.                         human interaction for certain functions, potentially
   Reducing the amount of internal transfers for common               requiring a cultural shift and training.
    cost payments as well as establishing automatic
    payments would decrease the level of processing
    resources consumed as well as increase the accuracy
    of payments.




                                                 Final Report – November 3, 2003                                              121
Technology: Implement Automation and Employee Self Services
Action Steps for Implementation Plan:
1) Conduct detailed assessment of current system configuration and processes to identify areas for automation, such as activating the
   Employee Self Service functionality and automatically processing common costs directly in the General Ledger module.
2) Develop plans for implementation of improvements, including milestones, resources required, impact on other areas, etc.
3) Define an ―Oracle Workflow‖ based approval framework for handling changes and updates to employee personal information.
4) Implement improvements according to plans.
5) Monitor improvements to ensure that they are being used and are resulting in productivity gains.




Timeframe for Implementation Plan:

                                      Implement Automation and Employee Self Services
        Conduct Detailed Assessment of Current Configuration
                Develop Implementation Plans

                      Define Oracle Workflow

                               Implement Improvements
                                    Monitor Improvements

 0          3              6              9             12         15         18          21          24           27           30




                                                        Final Report – November 3, 2003                                                 122
  Technology: Implement Automation and Employee Self Services
Implementation Costs
  Direct costs associated with implementing automation and Employee Self Services include:
     Some implementation costs may be required to develop employee self service applications.
     Training and change management might be required for certain changes.

  Indirect costs associated with implementing automation and Employee Self Services include:
      The amount of time spent transitioning staff from the current practice of manual updates to automated self services updates.




                  Barriers                                                             Critical Success Factors



 The cultural change of shifting away from in-person
                                                                   To ensure a smooth transition to Employee Self Service, perform
 human contact to Employee Self Service may
                                                                    appropriate change management and training.
 discourage personnel from using the application.




                                                    Final Report – November 3, 2003                                                   123

				
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