Productivity Improvement Initiatives

The Tennessee Valley Authority (TVA) engaged in three major initiatives during fiscal year (FY) 2009 through FY 2013 related to workforce productivity and operational performance: DeWolff, Boberg & Associates, Inc.'s (DBA) workforce performance, McKinsey and Company's Pilot and Performance Boost, and TVA's Diet and Exercise (D&E). Our audit objective was to assess the effectiveness of TVA's management of those productivity and operational performance improvement initiatives. Based on our assessment of the effectiveness of TVA's management of the DBA, McKinsey Pilot and Boost, and D&E initiatives, we determined TVA management did not effectively monitor achievement of all performance improvements. Specifically, we identified a deficiency in the control design related to monitoring and tracking for verification of savings claimed from the DBA and the McKinsey initiatives. In addition, the sustainability of the performance improvement initiatives was hindered by a lack of employee engagement and resource constraints that made operational efficiency improvements unachievable or unrealistic. Further, employee morale suffered during the DBA initiative due to employees' perceptions of disrespectful behavior towards them by DBA. Morale also suffered during the McKinsey initiative from a perceived lack of follow-through by TVA management to provide funding to implement improvements. Based on the above, we recommended TVA (1) assess the cultural climate through meaningful dialogue with employees about the impacts of the initiatives to determine the long-term effects on employee engagement and morale and (2) establish a standard process and procedure for future improvement programs. TVA management reviewed a draft of the report and agreed the contents were factually correct. TVA management is working on a plan to address our recommendations. Summary Only