Although the Department of Transportation ranked 16th out of 18 large agencies on the Partnership's list, its IdeaHub has helped the agency move in a positive direction. Ash recognized the internal, online community designed for department employees to share and develop new ideas.

The Transportation Department also showed the most improvement among large agencies on the Partnership ranking, rising by 1.7 percentage points from 2011 to 2012.

Department spokesman Justin Nisly said the agency had implemented more than 100 employee-generated ideas since launching IdeaHub three years ago.

The Department of Housing and Urban Development, which ranked 16th of 20 midsize agencies in the Partnership report, made it onto the Ash list twice — once for its neighborhood revitalization program, and again for its program focused on sustainable communities, which it conducts in collaboration with the Environmental Protection Agency and the Transportation Department.

For Stephen Goldsmith, Ash's director of the Innovations in Government Program, said creativity can emerge if employees are given permission to experiment.

"In a risk-averse context, the courage and ability to think across those boundaries is restricted. And I'm afraid that's what's occurring today in the federal workforce," he said. "It's not even just the political environment in Washington, it's the structures of government themselves that are quite inconsistent with the bold innovative thinking that is necessary to move us to a better place."

The Partnership's Stier echoes Goldsmith's assessment.

"We have a government that is way too risk-averse," he said. "By attempting to avoid mistakes, we fail to take advantage of positive opportunities."

Government must offer more formal awards and incentives to employees for their creativity, the partnership recommends, as well as create a collaborative culture.

It comes down to a relatively basic principle, as Goldsmith sees it: "Places where employees enjoy working are more conducive to innovation."