Changed Employee Behavior
Industry:
Internal Revenue Service
Problem
Quality of performance within the Internal Revenue Service (IRS) was sufficiently poor in the 1990s that in 1998, Congress passed the Restructuring and Reform Act of 1998 (RRA 98). Problem areas identified for correction included personnel accountability and internal measurement accuracy. The IRS Commissioner at that time acknowledged that to make the kinds of improvements required by RRA 98, “dramatic changes” would be needed, and they would require a “sustained approach…over a period of years.”
Subsequent evidence indicates that change did not come quickly. By 2001, the IRS was facing additional pressure from stakeholders to improve the quality of services provided. (1)
Approach
The IRS Wage and Investment Division turned to Lean Six Sigma (LSS) tools and methods in order to improve its performance. (This division is a very large component of IRS that employs, at peak season, some 50,000 employees. The division processes more than 180 million tax returns (individual and business) yearly, answers some 59 million phone calls and provides more than 20 million web services.) However, in 2001, there simply was not widespread acceptance of LSS within the division’s employee population. As a result, an ad hoc program based on executing various LSS projects was quietly started. Organizational effectiveness was assessed, improvement opportunities were prioritized and select individuals were trained as LSS Green Belts. For the projects started, results were tracked and measured. Leaders and staff were held accountable, and success was rewarded. This approach has been termed “stealth sigma,” but it was effective. It led to creation of the Embedded Quality Business Initiative (EQBI) and launch of a formal LSS initiative within the Wage and Investment Division in 2005. (2)
Results
Results have been impressive. From a report of the Treasury Inspector General for Tax Administration, 21 Dec 2005, the following quote can be found:
“The EQBI is an innovative approach to quality control for face-to-face interactions between assistors and taxpayers. No other federal government agencies we contacted have developed a comprehensive quality measurement system that measures face-to-face assistance like the one the IRS is implementing.”
From a Government Accountability Office report in April 2006, the following specific improvements were noted:
** Length of time taxpayers are on hold awaiting telephone assistance has decreased 22% (3.9 minutes to 3.0 minutes)
** Percentage of abandoned calls has decreased from 11.5% to 8.9%
** Accuracy rate for telephone answers to tax law and account issues is 90%. This was originally considered a stretch goal for 2010. (It was achieved four years early.)
Other improvements have included:
** Productivity gains between 10% and 30% for consolidated compliance programs.
** As a result of simplifying processes and eliminating steps in a regional service center, 100 full-time equivalent employees were able to be redeployed to other work.
Most importantly, as reported in mid-2006, employees within the Wage and Investment Division had changed. From an overt indifference to LSS in 2001, they were eager to continue using LSS to improve other areas of operation; thus enabling other improvements to be enacted from year to year. (3)
- R.J Morgante, Embedding Quality in the IRS: A Journey from Quality Fundamentals to World Class Quality Improvement Capability, a presentation at the Global Six Sigma Conference, June 2006
- Morgante, June 2006
- Morgante, June 2006
