The General Accounting Office (GAO) examined the effectiveness of using strategic human capital (HC) management to drive transformational change in federal agencies and reported on its own implementation of a new competency-based performance management system. First, the potential impacts of the following three broad HC reform opportunities to transform federal agencies were discussed: (1) aligning individual and organizational performance; (2) implementing results-oriented pay reform; and (3) instituting the position of chief operating officer (COO) in selected federal agencies to provide the sustained management attention essential for addressing key stewardship responsibilities in an integrated manner while helping to facilitate the transformation process within the given agency. Next, GAO's model of strategic HC management was explained. The model, which highlights the thinking that agencies should apply in managing HC strategically, is based on eight critical success factors that are arranged as follows to correspond with four cornerstones of effective strategic HC management: (1) leadership (commitment to HC management, role of the HC function); (2) strategic HC planning (integration and alignment, data-driven HC decisions); (3) acquiring, developing, and retaining talent (targeted investments in people, HC approaches tailored to meet organizational needs); and (4) results-oriented organizational cultures (empowerment and inclusiveness, and unit and individual performance linked to organizational goals). (MN)