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S. Hrg. 109–-794

SENIOR EXECUTIVES: LEADING THE WAY IN

FEDERAL WORKFORCE REFORMS

HEARING

BEFORE THE

OVERSIGHT OF GOVERNMENT MANAGEMENT, 

THE FEDERAL WORKFORCE AND THE DISTRICT 

OF COLUMBIA SUBCOMMITTEE

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

SEPTEMBER 26, 2006

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

BRANDON L. MILHORN, Staff Director 

MICHAEL L. ALEXANDER, Minority Staff Director 

TRINA DRIESSNACK TYRER, Chief Clerk 

OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL 

WORKFORCE AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE 

GEORGE V. VOINOVICH, Ohio, Chairman 

TED STEVENS, Alaska 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

DANIEL K. AKAKA, Hawaii 

CARL LEVIN, Michigan 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

ANDREW RICHARDSON, Staff Director 

RICHARD J. KESSLER, Minority Staff Director 

NANCI E. LANGLEY, Minority Deputy Staff Director 

EMILY MARTHALER, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Akaka .................................................................................................. 1

Senator Voinovich ............................................................................................. 2

WITNESSES 

TUESDAY, SEPTEMBER 26, 2006

Hon. Linda M. Springer, Director, Office of Personnel Management ................. 4

Brenda S. Farrell, Acting Director, Strategic Issues, Government Accountability Office ......................................................................................................... 16

Carol A. Bonosaro, President, Senior Executives Association ............................. 18

ALPHABETICAL LIST OF WITNESSES

Bonosaro, Carol A.: 

Testimony .......................................................................................................... 18

Prepared statement .......................................................................................... 48

Farrell, Brenda S.: 

Testimony .......................................................................................................... 16

Prepared statement .......................................................................................... 34

Springer, Hon. Linda M.: 

Testimony .......................................................................................................... 4

Prepared statement .......................................................................................... 29

APPENDIX 

Questions and answers submitted for the Record from: 

Ms. Springer ..................................................................................................... 52

Ms. Farrell ........................................................................................................ 63

Ms. Bonosaro ..................................................................................................... 69

Letter dated November 17, 2006, from Carol A. Bonosaro .................................. 72

(1)

SENIOR EXECUTIVES: LEADING THE WAY IN 

FEDERAL WORKFORCE REFORMS 

TUESDAY, SEPTEMBER 26, 2006

U.S. SENATE,

OVERSIGHT OF GOVERNMENT MANAGEMENT,

THE FEDERAL WORKFORCE, AND THE

DISTRICT OF COLUMBIA SUBCOMMITTEE,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 11:01 a.m., in 

room SD–342, Dirksen Senate Office Building, Hon. George V. 

Voinovich, Chairman of the Subcommittee, presiding. 

Present: Senators Voinovich and Akaka. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA [presiding]. On behalf of Senator Voinovich, who 

will be here shortly, I call this hearing of the Subcommittee on 

Oversight of Government Management, the Federal Workforce, and 

the District of Columbia to order. I would like to welcome our witnesses who are here to discuss the Senior Executive Service (SES) 

pay-for-performance system. 

Today’s hearing offers another opportunity to review the challenges associated with moving to a pay-for-performance system and 

to show agencies, such as the Departments of Defense and Homeland Security, what works and what does not work. 

This Administration is pushing to replace the current personnel 

system with pay-for-performance. Such an obvious pocketbook issue 

makes it imperative that, should any changes occur, they start at 

the senior levels first. However, senior executives and managers 

must have trust in a new system and have confidence that the 

processes, by which their performance is appraised and their compensation is determined, are fair. 

Last week, the Senior Executives Association (SEA) released the 

results of the survey of members and non-members on the SES 

pay-for-performance system, which raise serious concerns. The results are disturbing. Despite the Administration’s claims that the 

SES system is successful, the survey tells a different story. 

Respondents say that their new pay-for-performance system 

lacks transparency, fails to link pay with performance ratings, and 

serves no purpose other than lowering employee morale. I am especially troubled that over half—that is, 53 percent—believe that 

quotas were used to determine bonuses last year, despite explicit 

2

Office of Personnel and Management (OPM) regulations prohibiting 

such a practice. 

Director Springer and I have met regarding the issue of quotas, 

and I believe her when she says quotas are unacceptable. However, 

if quotas are not being used, then there is a serious perception 

problem that must be addressed. I look forward to hearing what 

steps OPM is taking to resolve this problem. 

So let’s be clear. The competitive selection process for members 

of the SES should ensure that the best people are leading the Federal Government. So when it comes to evaluating the performance 

of these highly qualified individuals, high performance ratings 

should be expected. Agencies that lower ratings artificially to fit 

bell-shaped curves or institute arbitrary quotas are not rewarding 

performance; rather, they are showing how pay-for-performance 

can be unfair and unobjective. 

Director Springer, I want to thank you for your commitment to 

work with agencies to address the problems raised by the SEA survey. To me, the survey clearly demonstrates the need for more rigorous certification criteria, as well as more training and oversight 

by OPM. Right now, only one agency has full certification and 25 

have provisional certification. I just wonder if we are giving agencies to much flexibility without meeting what Comptroller General 

Walker calls the ‘‘show me’’ test. 

If senior executives do not have faith in the fairness and transparency of their pay system, I do not see how rank-and-file employees would want to work under such a system. 

I am so glad to see our Chairman back here at this moment, and 

I look forward to hearing from our distinguished witnesses. Mr. 

Chairman, thank you. 

Senator VOINOVICH [presiding]. Thank you, Senator Akaka. I 

really appreciate you starting this hearing. Ms. Springer, I apologize to you for being late this morning. It is the first time that this 

has happened, and it is the last time. 

OPENING STATEMENT OF SENATOR VOINOVICH 

Senator VOINOVICH. Today’s hearing, ‘‘Senior Executives: Leading 

the Way in Federal Workforce Reforms,’’ is very important. As Congress continues to consider ways to better position the government 

to be an employer of choice in the 21st Century, reforms of the government’s personnel systems, both performance management and 

pay systems, have been a key focus. 

We know that to effectively implement change throughout an 

agency, the senior management must be committed to change and 

lead by example. Government-wide reform has begun at the top, 

and it must start at the top. When it comes to pay-for-performance, 

the elite cadre of government leaders and managers are leading the 

way. 

The Senior Executive Service (SES) was established by the Civil 

Service Reform Act of 1978. It provides a framework for developing 

and managing executives in the Federal Government. By definition, career members of the SES are talented individuals. They 

must be able to lead change; they must be able to lead people; they 

must achieve results; they must possess business expertise; they 

must be able to build coalitions; and they must maintain open comVerDate 0ct 09 2002 09:49 Feb 22, 2007 Jkt 030600 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\30600.TXT SAFFAIRS PsN: PAT
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munication. They are really important people, and are leaders in 

the government. 

In response to the continued problem of pay compression, Congress authorized departments and agencies to develop and implement pay-for-performance for the SES. If OPM, with the Office of 

Management and Budget (OMB) concurrence, certifies an agency’s 

performance management system, the SES would be able to earn 

pay at a higher rate. I was disturbed by some of the information 

that Senator Akaka mentioned in his statement. 

I was, and remain, a strong advocate of reform efforts underway 

for the government’s senior career civil servants. I believe these reforms, if done well, will help the dedicated members of SES better 

serve our Nation. The goal of all Federal personnel reforms is the 

same: To build a better workforce. Why is this important? The only 

way government, the various departments and agencies, will succeed in accomplishing its missions is to have motivated employees 

working towards the strategic goals of their respective agencies. An 

effective performance management system establishes for employees a clear understanding of what is expected and demonstrates 

how each individual contributed to advancing the agency’s mission 

and serving the American people. 

Let me provide a concrete example of the service these individuals provide to the American people. Each year, the President recognizes a small group of career senior executives who have demonstrated exceptional long-term accomplishments. Michael 

McMullan, the Deputy Director of Beneficiary Services at the Centers for Medicare and Medicaid Services, is a recipient of the 2005 

Presidential Rank Award for distinguished senior professional service. Ms. McMullan developed CMS’ consumer information strategy, 

which includes plain-language materials, a full-service toll-free 

telephone line, 1–800–MEDICARE, and an award-winning Internet 

site. I can tell you it was fantastic, and I saw first hand the available benefits all over Ohio. It was amazing to me what they were 

able to do. She is only one example of the excellence to be found 

in our SES corps. We must do all we can to recognize, reward, motivate, and retain these talented individuals. 

As you know, we are 3 years into the implementation of reforms. 

I look forward to hearing the testimony of our witnesses to assess 

implementation, understand the current status of reforms, and determine whether additional changes are needed. We must do all we 

can to ensure success, and when I say ‘‘we,’’ I do mean ‘‘we’’—Congress, the Executive Branch, and employee representative organizations. 

You testified here before when we were talking about the NSPS 

and its progress. The impression that I got from the different comments I am receiving from various agencies is that the preliminary 

work done for Spiral 1.1 was not done with the Senior Executive 

Service. I am anxious to discuss this further. As I have mentioned 

over and over again, if implementation is not done correctly in the 

beginning, then its chances of being successful and becoming a part 

of the system is not going to happen. 

So, again, I apologize for being late, and I am anxious to hear 

your testimony. 

4

1The prepared statement of Ms. Springer appears in the Appendix on page 00. 

TESTIMONY OF HON. LINDA M. SPRINGER,1 DIRECTOR, 

OFFICE OF PERSONNEL MANAGEMENT 

Ms. SPRINGER. Thank you, Mr. Chairman and Senator Akaka, 

and I appreciate both of you being able to come here, especially arriving from Hawaii, Senator Akaka. So it is a particular pleasure 

to be here today to discuss the progress to date on the implementation of this performance-based pay system for members of the Senior Executive Service. I do appreciate the support and the interest 

of this Subcommittee and other Members for effective performance 

management, and that is where it begins. There is no basis for payfor-performance unless the performance management is present for 

the start of it. 

With regard to the SES, OPM has two roles to play in successful 

implementation. The first role is to provide agencies with the assistance they need to design and implement these systems successfully. The second role is to oversee their effectiveness and, chiefly, 

that is done through the certification process that is outlined in the 

statute. 

To guide agencies through the process, OPM published detailed 

regulations with criteria in 2004 for agencies to meet, as well as 

additional guidance since then as it has been needed. We review 

the agency submissions for certification very carefully and assign 

it to either one of two categories: either provisional or 1-year certification, or a full certification which lasts for 2 years and then 

would have to be re-upped, depending on the extent to which the 

agency has satisfied us that they have met the criteria. There are 

written standards and criteria that need to be met for certification. 

Additional concurrence is given, as you mentioned, Mr. Chairman, 

by OMB. 

We are completing the third year of the certification process, and 

each year we find that the agencies’ data is more complete, has 

more rigor, and is increasingly close to the guidance. In the past, 

the executive performance plans that we saw were not focused particularly on achievement, but more so on activity, less on results, 

more on just actions and activities, but less so on the actual result 

of those activities. Today, the performance plans are better documented. They have more measurable goals—and I want to underscore measurable as opposed to quantifiable. Quantifying is one 

type of measurement, but there are other types of measurement. So 

we look for the broader definition of measurement and look for that 

in the goals. 

Good plans have written goals. They have requirements that 

goals for each individual be in writing, that they are in writing at 

the beginning of a performance cycle, that they are agreed upon up 

front, and that those goals have ways to determine the progress 

that is being made and, in fact, that meets our definition of measurable. Quantifiable, again, is just one type of that. 

Agencies are using multi-level rating systems and making meaningful distinctions in applying them. Now, I want to say right here 

on the record very straightforwardly, quotas are prohibited. There 

is nothing in our guidance that allows for quotas. If we see them, 

we take actions. When they are brought to our attention, as they 

5

have been recently in this study—and Senator Akaka sent a letter 

to me earlier this year, I believe, on it, or late last year it was, and 

we dealt with that situation. So if we find quotas, we will deal with 

it. 

Sometimes there is an appearance of a quota or there is a perception of a quota. The terminology may be used. It may be that 

a manager needs coaching to help them to understand that they 

need to deal with a performance issue and not use the Cop-out saying, ‘‘well, I have a quota to meet and you are not going to get it 

this year.’’ That is not really a quota system, but it is someone 

using that as a convenient excuse to manage through a situation. 

And in some cases, there may legitimately be misunderstandings 

of people thinking that we are looking for quotas. We are not. So 

we will work very diligently, and we have been whenever we see 

that, but I want to say very clearly today that quotas are not allowed. They are prohibited. They are bad. 

But we are seeing increasing linkage between performance and 

making decisions about the distinction between the performance 

and the results and then what that means for ratings of executives. 

And that is important. That is what we are after—good distinctions, good goals, and measuring that, and really rewarding people 

to the highest degree who are the highest-level performers. It remains a work in progress, but we believe that certification is having the desired effect—not quotas, but the effect of driving improvement in agency performance management. That is what we are 

after—better performance, better management of performance—

and that is what we are starting to see. 

We are currently preparing guidance for the 2007 certification 

cycle and will highlight areas of improvement. Whether it is in 

training or whether it is in communication, we will be able to look 

at the results of the study from the SEA and very seriously see if 

there are things there that need to be incorporated in our 2007 

guidance. 

One thing that I want to point out is that there is a gap in the 

underlying statute. Right now agency certification expires at the 

end of a calendar year. Most agencies are still finishing up their 

cycle of performance reviews, and they are not able to send in their 

new certification requirements until sometime after January. So we 

have a period of time where, if the certification has lapsed or expired, members of the SES who have gotten up to that executive 

level II under a previous certification are not able to get the increases, nor are people able to be hired to take advantage of that 

higher executive level II in that gap period. 

We sent draft legislation up in June. We would like to work with 

you on trying to get that implemented, and that would help us to 

overcome this gap issue. We obviously want to take maximum advantage, or allow agencies to take maximum advantage, of that executive level II opportunity in their hiring. 

Another limitation that is in the current statute is the inability 

of the Senior-Level group, SL, and the Senior Scientific and Technical personnel, the ST group, to have access to executive level II 

pay. These are the very advanced, very seasoned, very experienced 

technicians and technical personnel. They have not chosen a management track, so they do not fall under the SES provisions that 

6

allow them to have the opportunity for higher pay at the executive 

level II. We think that these personnel deserve that opportunity, 

and we think it should be fixed. So we would like to work with you 

on that as well. 

OPM is committed to systems of compensation that reward Federal employees for performance, in contrast to systems that are 

driven by longevity. We steadfastly believe the SES system is a 

good system. But we recognize—and in light of the current survey 

that came out, we believe that there are some inconsistencies in 

how it is being applied and implemented. We believe it is an execution issue rather than the construct of the system itself. 

We are reviewing the study that was released last week by the 

Senior Executives Association. I met with Ms. Bonosaro on it the 

very day that it came out, and we believe it will help us to understand some areas that previously we were not aware that there 

may be either misconceptions or misapplications. And we are going 

to work through the Chief Human Capital Officers Council, among 

other areas, to work directly with agencies to shore that up. 

I do have one concern that I want to state publicly, and that is 

that I think we have to be careful that we haven’t devalued the 

rating of a fully successful performer. Senior executives, like anyone else, are hired with the expectation that they will do a job and 

be high-level performers. That is the expectation. No one is hired 

with the idea that they will be poor performers or mediocre performers. When you hire someone to do a job, you expect they will 

do it and do it well. And that, in my mind, constitutes that they 

have done their job successfully, fully successful. 

Past practice has corrupted the definition of ‘‘fully successful’’ to 

mean that if you do your job fully and do it well, that equates to 

an outstanding rating. We believe that the higher-level ratings, 

‘‘exceeds’’ and ‘‘outstanding,’’ should be reserved for performance 

that is just that, and that the ‘‘fully acceptable’’ or ‘‘fully successful’’ 

should be viewed very positively and reflects the fact that the commitment has been fulfilled between the employer at the agency and 

the employee. And so that is another thing that I personally believe 

needs to be reset as we go into a more fully tiered evaluation system. 

In closing, I remain fully convinced that performance-based pay 

is critical to the success of an organization, and the government is 

no exception. It is particularly critical for us, as you say, Mr. Chairman, to be an employer of choice in the years ahead in an increasingly tight labor market, and I think performance-based pay is an 

important component, managed well, executed properly. I am 

equally confident that the men and women of the Senior Executive 

Association are capable of managing and thriving in this system 

when it is done properly. 

I appreciate the opportunity to testify here today, and I will look 

forward to any questions that you may have. 

Senator VOINOVICH. Thank you very much. 

As you know, and I have made mention to Senator Akaka’s statement, the results of the survey the Senior Executives Association 

released early last week. It does not provide a positive assessment 

of implementation thus far. The SEA is going to testify in the secVerDate 0ct 09 2002 09:49 Feb 22, 2007 Jkt 030600 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 C:\DOCS\30600.TXT SAFFAIRS PsN: PAT
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ond panel and will discuss their survey in more detail in their testimony. 

I have repeatedly stressed to both the Department of Defense 

and the Department of Homeland Security that a fundamental goal 

of their new personnel system is employee acceptance. 

Since it is going to be brought up, what is OPM’s response to 

their findings? 

Ms. SPRINGER. Well, the initial response is that we want to study 

it. We are certainly not taking a defensive posture. We want to 

take to heart, very seriously, the issues that have been raised 

there. I would say that these issues are raised to a degree and a 

magnitude that we have not previously heard. We have heard instances here and there, as Senator Akaka had raised to us, about 

a quota perception, and we dealt with that particular one. We have 

not heard it to the degree that it appears to be coming out in this 

survey. 

So the first step was to meet with the head of the SEA, which 

I did. The second was to ask some additional questions. She has 

already provided some additional information. I want to get down 

beneath the surface on some of that information. The CHCO Council will be meeting in November, and we are going to put that on 

our agenda and review it. And as we prepare the 2007 guidance, 

OPM’s 2007 guidance, we are going to reinforce the execution 

issues that deal with the concerns that have been expressed. 

Senator VOINOVICH. Are you going to undertake your own analysis of this so that you can review those and have them reflected 

in what you are going to be doing next year? 

Ms. SPRINGER. Yes. 

Senator VOINOVICH. Does OPM’s review of agency certification 

submissions include a review of the communications strategy and 

training program? 

Ms. SPRINGER. It does not explicitly, Mr. Chairman. There are 

many facets and many components, and we have been talking 

about, in light of the study and some of the other things, perhaps 

we need to highlight that more than we do today. 

You raised earlier Spiral 1.1 of NSPS, and we had the hearing 

last week on how the Department of Defense is doing with their 

system. And one of the reasons why they have achieved success so 

far is because of the training culture that exists at DOD and the 

way that they have applied it to their Spiral 1.1. 

I think that you would find across the landscape of the agencies, 

with the SES, varying degrees of that type of training and communication. That, I think, maybe should be a focus, a stronger focus 

in our process. 

Senator VOINOVICH. We have heard good remarks on Spiral 1.1 

of NSPS. It would seem to me that you might look at why that has 

been successful to maybe incorporate some of that into the SES 

system. It is obvious that is not as good as it should be. 

Three years into implementation, only the Department of Labor 

has full certification of its performance management system. Congratulations, to Secretary Elaine Chao. 

Why do you believe more departments and agencies have not 

been able to obtain or maintain full certification? Has anybody 

compared what Secretary Chao has done in her Department to get 

8

an idea of how her work might be helpful to other departments? 

Have any departments without certification discussed with the people from the Department of Labor what they did? Are there best 

practices that others could incorporate that would help them get 

certification? 

Ms. SPRINGER. There are a few questions there, and I want to 

answer all of them. 

The first is that I do not see the fact that only one agency has 

achieved full certification as necessarily a bad thing. Certification 

is not a rubber stamp from OMB or OPM. Certification has some 

very high standards, and so getting provisional certification is a 

first step, but I think that it recognizes that we are not going to 

give agencies full certification unless they do have things in place 

that warrant it. And we have not seen that to the degree we would 

like. 

We have seen it at Labor. We have studied what Labor has done, 

and one of the things I would like to do with the Chief Human 

Capital Officers Council is to have best practices with respect to 

the SES performance system, pay system, be an initiative of theirs 

so that would be the opportunity. There is a representative from 

every agency there to share best practices. So that will be one of 

the things that we do to make that happen. 

Senator VOINOVICH. But do you know whether there has been 

any meetings betwen Labor and other departments? If Labor is 

doing a good job, what is it that they are doing that could be replicated in other agencies? 

Ms. SPRINGER. OPM has done that. I do not know if other agencies on their own initiative have visited to find out what Labor has 

done. But OPM has done that, and we have set out very clear 

standards and practices to the other agencies, here is what makes 

for a successful system. 

As I said earlier, I think we can go further in what makes for 

successful execution of the system, not just the construct of the system. I think we have done a pretty good job on the construct. It 

is just how people were behaving in that system where we need to 

focus now. 

Senator VOINOVICH. Does your new person who is quarterbacking 

that group of human capital folks have this on his agenda? 

Ms. SPRINGER. Yes. 

Senator VOINOVICH. I would like to know, what is the agenda of 

the Human Capital Officers Council? One of the things that I 

learned, particularly as governor of Ohio, is that if you get folks together, it is amazing how much they help each other instead of just 

dealing with problems in a vacuum when people get together and 

talk, this type of synergism develops, and they start to get excited. 

I think it would help a great deal if you sat down with Ms. 

Bonosaro and her group and asked: What are your observation or 

what is going right? I think that is the best way to identify changes 

that are needed. 

Ms. SPRINGER. Yes. I could not agree with you more, and that is 

one of the ways we will get at this. 

Important enhancements were made this year to improve the 

structure of the Chief Human Capital Officers Council (CHCOC), 

which have been implemented for the Council Chair by the ExecuVerDate 0ct 09 2002 09:49 Feb 22, 2007 Jkt 030600 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\30600.TXT SAFFAIRS PsN: PAT
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tive Director. First, in the spring of 2006, the Council was expanded to include Deputy Chief Human Capital Officers. The addition of the Deputy CHCOs serves three important purposes, including (1) providing the Council’s link to the Federal human resource 

directors; (2) developing and sharing best practices; and (3) ensuring continuity when there are changes in leadership at the Council. 

Second, the subcommittees were realigned and refocused to reflect key human capital challenges facing Federal agencies. The 

new alignment created six subcommittees, including: Emergency 

Preparedness; Hiring and Succession Planning; Human Resources 

Line of Business; Human Resources Workforce; Learning and Development; and Performance Management. This new structure allows the Chief Human Capital Officers, and their deputies, to serve 

as leaders in these critical issue areas. 

Third, OPM linked the goals and objectives from the agency’s 

‘‘2006–2010 Strategic and Operational Plan’’ to each subcommittee. 

The linkage will enable OPM to forge strategic partnerships with 

the appropriate subcommittee representatives and their staff members. In addition, this collaborative approach, provide the subcommittees with the opportunity to affect human capital policy and 

programmatic changes during the developmental and implementation stages and will yield positive achievable and recognizable outcomes. 

Fourth, to allow for greater ownership, transparency and accountability, each subcommittee drafted mission statements and 

goals for FY 2007. The creation of the subcommittee plans provides 

the foundation for the tasks and priorities that the Council will address in the next 12 months. As indicated in each of the subcommittee plans, the Chief Human Capital Officers, the deputies, 

and their staffs will work closely with OPM to achieve their objectives. Developing and fostering this partnership will provide the 

subcommittees with the opportunity to assess the current impediments to progress, compile and share best practices, and make recommendations on strategic human capital management challenges 

to OPM, the Council and its stakeholders. 

Fifth, the Council expanded the attendance of agency representation for Training Academy sessions. For example, in the past, the 

Council’s Training Academy sessions were open to CHCOs only. 

However, beginning in August 2006, each Council member can 

send a total of three employees from their agencies to attend these 

sessions. Due to this change, over 55 agency representatives attended both the August session when the Departments of Justice 

and Labor showcased their efforts to conduct competency assessments of mission critical occupations and the October session 

where OPM, OMB, the Department of the Treasury, and the National Academy of Public Administration highlighted the importance of linking agency human resource offices into the competitive 

sourcing process. 

Sixth, during the full-Council meetings, CHCOs have the opportunity to share best practices from their agency. Examples of best 

practice presentations included establishing effective CHCO and 

Deputy CHCO working relations, which was conducted by the Department of Energy in July and utilizing USAJOBS to improve 

agency recruitment efforts by NASA in September. Sharing best 

10

practices by CHCOs facilitates greater dialogue and discussion during the full-Council meetings. In addition, the agendas include 

dedicated time for the subcommittee chairs to update the Council 

on their progress. 

Over the past several months, a number of important human 

capital issues have been discussed at the full-Council meetings, including an in-depth conversation on the use of human resource 

flexibilities, recruiting top talent for management positions through 

the Presidential Management Fellows Program, FY 2006 Senior 

Executive Service performance data, and an update on the final 

regulations for hiring individuals with disabilities. In addition, several best practices were presented during the CHCO Council Training Academy Sessions including one led by the Departments of 

Labor and Justice on conducting competency assessments for mission critical occupations. The subcommittees have also had best 

practice demonstrations and discussions as well. For example, the 

Emergency Preparedness Subcommittee received a briefing by the 

Department of the Navy on their on-line system for tracking employees during an emergency. Based on this briefing, several 

CHCO agencies received follow-up sessions from the Navy. 

Moving forward, the executive director will continue to work with 

the Council to capitalize on this open and collaborative environment and find innovative ways to discuss cutting edge human capital issues affecting the Federal Government and showcase best 

practices that foster learning for the Chief Human Capital Officers 

community. For example, in our November 2006 full-Council meeting, we will receive a briefing from Christine Griffin, Commissioner 

of the Equal Employment Opportunity Commission, on the hiring 

of individuals with targeted disabilities and discuss the 2007 certification of performance appraisal systems for senior executives, 

among other items. Future meeting topics will be discussed by the 

Council and finalized by the Executive Committee in the coming 

months. 

Senator VOINOVICH. Do you have the resources that you need to 

do this? 

Ms. SPRINGER. Yes. 

Senator VOINOVICH. Senator Akaka. 

Senator AKAKA. Thank you very much, Mr. Chairman. 

Director Springer, I mentioned in my opening statement that, according to the SEA survey, 53 percent of respondents claim their 

agencies use quotas. When you discover an agency using quotas, 

what action does OPM take or do to address the issue? 

Ms. SPRINGER. Well, first of all, OPM gets in direct contact with 

that agency or that component of the agency, and presents to them 

what we have learned and gives them an opportunity to respond 

to it, in fairness to them. But then we will sit down with them, we 

will review the program as they are executing it, and see if there 

is, in fact, the use of quotas or if, in fact, there is a perception because of something that they are doing that would lead someone 

to think that there is a quota. And whatever needs to be done 

there, we will fix. 

Then we have a regular process of going back. It is not exactly 

an audit, but of revisiting in areas that has been a challenge. 

11

Senator AKAKA. From your statement, it seems as though there 

is not a clear understanding as to what a quota is. 

In your opinion, what constitutes a quota? 

Ms. SPRINGER. If a system has a goal to have X percent of ratings 

at this level and Y percent at this level and another percent at 

each of those levels, regardless of performance, then that is a quota 

system because the main driver is reaching a certain distribution. 

Our goal is not the distribution. Our goal is developing performance and rewarding performance. 

Now, it is conceivable, for example, in an agency that has a small 

component of SES executives that they could all have an outstanding year and all be at the highest level, and if that is the way 

it comes out, if the goals that were established at the beginning, 

well-articulated goals, measurable goals are all achieved at that 

highest level, then that is fine. There is nothing in our system that 

prohibits that. 

What I think people have misconstrued is the fact that in a 

group of 6,000 SES executives, 6,000-plus individuals, it is hard to 

imagine that somewhere around 90 percent would all be at not just 

fully successfully doing their job or even at exceeds, but at the outstanding level. And that was the result that we were getting before 

this system of really having clear goals and making distinctions 

was in place. We had one agency that had 1,000 SES, and in the 

year 2002 97 percent were all rated outstanding. Now, intuitively 

that just does not make sense. 

And so I think that people have interpreted those types of comments to mean that we are shooting for a lower percentage. But 

what we are shooting for is not a percentage or a curve or a certain 

distribution, but it is a fair and accurate assessment based on performance. 

Senator AKAKA. Have you met with the SEA about quotas? 

Ms. SPRINGER. Well, we have started that process. The first 

meeting I had with Ms. Bonosaro was the day that the survey 

came out. I heard it was coming, and I asked her if she would be 

good enough to come over and visit with me, and she did. And I 

am sure we will have many more meetings. 

Senator AKAKA. The SEA survey also found that in smaller agencies performance pay is restricted because of a shortage of funds. 

How can small agencies implement a successful and fair pay-forperformance system without additional funds? 

Ms. SPRINGER. The fund pool, the pay pool, is obviously an issue 

for small agencies. It is an issue for large agencies, too, candidly, 

because no one is without budget pressures. But the fact of the 

matter is that each agency has to take some responsibility for this. 

It is not just an OPM issue. As I think one of you said earlier, we 

all have a part in making this successful. So making sure the agencies have the funding they need to reward their employees is not 

just an OPM issue. It is an issue for that agency that feels they 

do not have it. It is an issue for everyone who participates in the 

budget process. 

But where we have a particular role at OPM is make sure that 

the system is in place, it is meeting standards, and that right from 

the front end, the executive has clear, written goals, good management has what they need to be successful, and then at the end of 

12

the day, certainly we all need to work together to make sure the 

funding is there so that they can be rewarded appropriately. 

Senator AKAKA. I understand that OPM, with OMB’s concurrence, may suspend certification if an agency’s pay-for-performance 

system is not in compliance with the certification criteria. You did 

mention in your remarks that certification is having a desired effect. Has any agency’s certification ever been suspended? 

Ms. SPRINGER. To my knowledge, I do not think anyone ever—

no, the answer is no. 

Senator AKAKA. And can you provide additional details as to 

what an agency would have to do in order to have certification suspended? 

Ms. SPRINGER. It is really speculative, to be honest with you, 

Senator. I have not ever come across it, nor would I expect that to 

be the case. Let me get back to you on that, if I may, because it 

is just very far removed from what we have experienced or what 

we expect to experience. So I will get back to you with that. 

Senator AKAKA. Director Springer, the merit system principles 

call for equal pay for work of equal value. However, under the SES 

pay-for-performance system, senior executives at different agencies 

with the same performance rating do not necessarily receive the 

same performance award. 

In your opinion, how does the SES pay-for-performance system 

comply with the principle of equal pay for equal work? 

Ms. SPRINGER. I think that it does in the sense that the starting 

point is a job definition with certain responsibilities and requirements and an individual who takes on that role—and so they start 

at the same point. But then from that point, each individual distinguishes themselves in a given year by the level of their performance and the particular requirements of that job in that agency. So 

you may have an accountant in agency A and an accountant in 

agency B, or an accounting executive, if you will, and they may in 

a given year, even though on paper typically it looks like the same 

position, have certain challenges in that year. And this system 

would allow us to recognize the stellar performance, for example, 

of an individual in a particularly challenging year that went above 

and beyond the basic requirements of their job. 

So I do not think they are at odds. I think it just gives us the 

opportunity to acknowledge years that exceed or are outstanding 

for a given individual and then reward those. 

Senator AKAKA. I understand that OPM conducts audits of agencies to ensure adherence to the merit system principles. Has OPM 

completed any audits of agencies’ SES pay-for-performance systems? 

Ms. SPRINGER. Yes, I was just checking. It really is each year, in 

effect, by the recertification process, we are examining what they 

have done in the previous year. So, in effect, that is like an audit 

de facto, if you will, because each year, with the exception of the 

agency that has the 2-year full certification, we have to go back 

and review what they have done, have they put it into practice and 

met the expectations. 

Senator AKAKA. Thank you very much, Mr. Chairman. 

13

Senator VOINOVICH. Senator Akaka, I would like to have another 

3 minutes for each one of us and then wrap it up here because 

there are other witnesses. 

Agencies are allocated funds every year. They also are required 

to fund a cost of living increase for employees, pay step increases, 

and so forth. Now, when we get to the Senior Executive Service, 

is there a pool of money that is available for them? And does that 

reflect the cost of living? How does that work? 

Ms. SPRINGER. There are really two major components to the 

compensation award and adjustments that are made for a given individual in the SES, as I understand it. You have got a percentage 

increase on their salary, and that is intended under our system to 

recognize performance. 

Senator VOINOVICH. Well, let me start off with this: We pass a 

cost-of-living adjustment each year, X percent. 

Ms. SPRINGER. Right. 

Senator VOINOVICH. Is that amount of money reflected in the 

budget of the departments or do they have to funnel these raises 

from existing funds? 

Ms. SPRINGER. Yes. 

Senator VOINOVICH. And that is the money that you have to work 

with. 

Ms. SPRINGER. That is my understanding. And then, in addition, 

obviously, there is the bonus pool as well. 

Senator VOINOVICH. Is that an extra sum of money that departments are given, a bonus pool? 

Ms. SPRINGER. In developing their budget requests, agencies 

project personnel costs across their entire workforce. ‘‘Personnel 

compensation and benefits,’’ the budget class or category that includes General Schedule salary increases and awards, also includes 

SES pay increases and awards. In estimating the amounts needed, 

agencies rely on historical projections. OMB’s government-wide 

budget preparation instructions (OMB Circular A-11) include directions on how to reflect the effects of pay raises and assumptions 

about those raises. Given the timing of the government’s budget 

and appropriations processes, these assumptions are estimates. 

OMB’s budget preparation instructions do not ask agencies to isolate SES compensation from that of the general workforce. OPM is 

not in a position to instruct agencies on how they should allocate 

funds for executive compensation when they develop their operating budgets after receiving their appropriations. 

With respect to SES bonuses, more specifically, it must be noted 

that for the SES, a performance award is part of the overall delivery mechanism for SES compensation, as legislated by the Civil 

Service Reform Act of 1978. Agencies must adhere to the funding 

limitations regarding the amount of performance awards paid in 

any fiscal year, which are found in 5 U.S.C. 5384(b)(3). They usually do this by establishing an SES bonus pool. The actual allocations used to fund this awards pool are covered in the agency’s annual operating budget process, as salaries and expenses (or equivalent). 

Senator VOINOVICH. It is my understanding that since the implementation of the pay-for-performance system, there is no guarantee 

14

of a pay adjustment for successfully rated employees. One of the 

purposes of this system is to reward those that should be rewarded. 

The enabling statutes of the new systems at the Department of 

Homeland Security and the Department of Defense also do not 

have such a requirement. But the guarantee for at least a market 

adjustment was incorporated in the final regulations of both systems. Has OPM opened, or is it revisiting, such a regulatory 

change for the SES? 

Ms. SPRINGER. Yes. 

Senator VOINOVICH. OK. You can do that by regulation. 

Ms. SPRINGER. Well, I think we need to take a look at how it 

would actually, in practice, happen. So I don’t want to say what the 

vehicle is. But we are open to exploring that. 

Senator VOINOVICH. Well, I would like to conclude with this comment. First of all, I know you are working at it, and you have a 

lot of things on your plate. But I have invested an enormous 

amount of time in workforce refroms. One year from now I want 

the problems solved. That means that you get in there with a microscope, and sit down with the organization that represents the 

SES. I want this thing to be perfect. If it is not—how do you expect 

us to have a successful rollout of this into other areas of the Federal Government? 

It is really disturbing to me, honestly, that this has not worked 

the way it should work. I want it to work. 

Ms. SPRINGER. May I just respond to that? 

Senator VOINOVICH. Yes. 

Ms. SPRINGER. Nobody wants it to work properly more than I do, 

and I think we have to be very careful that we do not take a survey 

a few hundred people out of over 6,000 in a new system where 

there are some execution issues and let that paint a picture that 

it either is a bad system or that it will not work. It can work, and 

it is working in many places. 

Senator VOINOVICH. But may I tell you something? 

Ms. SPRINGER. Yes. 

Senator VOINOVICH. They should not be making the survey. You 

should be making the survey. Employee acceptance of the system 

is very important, but that does not mean that everybody is going 

to be happy. But, overall, people should say: You know what? This 

is neat. This is something that we have wanted for a long time. 

Ms. SPRINGER. There is no question about it, and we do surveys. 

We have not done one here yet because, candidly, what we find is 

in surveys we have done of projects, demo projects, other projects, 

it takes several years before the system really takes hold and people see the value of it. And even there you typically get only to a 

70- or 80-percent level of satisfaction with it, because there are 

some people who are not going to come around as well as others. 

And so I think it is a little bit premature. I think it is helpful 

information. We take it seriously. As I say, I met the very first day 

that it came out with—to get briefed on it personally. There are 

things we are going to do. But I think we have to be very careful, 

not just on the basis of that one survey, to run to the conclusion 

that this is bad, it is not working. A lot of people are very happy; 

even in the survey it picks that up. 

15

Senator VOINOVICH. Well, the fact is it is not where it is supposed to be. Do you agree? 

Ms. SPRINGER. Agreed. 

Senator VOINOVICH. OK. Has anybody ever sat down with David 

Walker and his team to talk to them about what they did in terms 

of when they implemented their program? 

Ms. SPRINGER. We are very familiar with GAO’s approach. When 

Comptroller General Walker undertook his multiyear efforts to 

transform GAO and its workforce, he invested in an expansive approach that developed, validated, and uses mission-focused competencies as the key driver. As you know, OPM’s work leading the 

President’s Management Agenda initiative on the Strategic Management of Human Capital has also focused agencies’ attention on 

assessing and reducing gaps in the competencies their mission-critical occupations require. GAO went on to link its competencies to 

a broadly-drawn ‘‘performance management system’’ that covers 

and integrates a host of human resources management processes. 

Among those processes is the appraisal process itself where judgments are made about the degree to which expectations have been 

met and goals achieved. Within the Executive Branch, agencies 

subject to the Government Performance and Results Act of 1993 

have been making progress in emphasizing a results focus and improving measurement of results. The Bush Administration has 

been determined to pursue that results focus with respect to executive and employee performance appraisal, so that has been the cornerstone of our effort to improve executive and employee performance management systems in the agencies. In many respects, the 

efforts of GAO and the Executive Branch are congruent. Our work 

differs to some degree in our results emphasis, particularly when 

it comes to making judgments about whether agencies’ executive 

appraisal systems are making meaningful distinctions based on relative performance, as the law requires when OPM certifies those 

systems. 

Senator VOINOVICH. Senator Akaka. 

Senator AKAKA. Thank you very much, Mr. Chairman. I have 

other questions for Director Springer, I would like to submit the 

rest of my questions for Director Springer for the record. 

Senator VOINOVICH. Without objection. 

Thanks for your testimony, and we want to work with you. I 

know you have a tough job, but I want you to know that I have 

told Clay Johnson that I am going to spend as much time as I can 

working with OPM. 

Ms. SPRINGER. Good. 

Senator VOINOVICH. I think that you are on the way to shaping 

up OPM. I am proud of the progress that is being made, and we 

want to do everything we can to help you. I think it is really important, and I am going to get a letter off to my friend, Rob Portman, 

that in this area, they should be really looking at the budgets to 

make sure that you have got the resources that you need to go forward and do this right. 

Ms. SPRINGER. Very good. We are always glad to get more 

money. 

Senator VOINOVICH. Thank you. 

Senator AKAKA. Thank you, Director Springer. 

16

1The prepared statement of Ms. Farrell appears in the Appendix on page 00. 

Senator VOINOVICH. Our next panel of witnesses, we have Brenda Farrell, Acting Director Strategic Issues, at the GAO; and Carol 

Bonosaro, President of the Senior Executives Association. 

We thank both of you for being here today, and I appreciate the 

fact that both of you had an opportunity to hear the testimony of 

Ms. Springer, and I would welcome any comments that you have 

in regard to what she had to say here today. We are trying to get 

the best information we can before this Subcommittee. 

Ms. Farrell, will you proceed? 

TESTIMONY OF BRENDA S. FARRELL,1 ACTING DIRECTOR, 

STRATEGIC ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE 

Ms. FARRELL. Thank you, Mr. Chairman. 

Senator Voinovich, Senator Akaka, thank you for the opportunity 

to be here today to discuss the Federal Government’s implementation of performance management systems for the approximately 

7,000 members of the Senior Executive Service and those in senior 

positions. Let me briefly summarize my written statement that is 

based on findings from our issued reports. 

First, I want to emphasize that implementing pay-for-performance systems is a huge undertaking for organizations and requires 

constant monitoring and refining in order to implement and, very 

importantly, sustain them successfully. How it is done, when it is 

done, and the basis on which it is done can make all the difference 

in their success. 

My written statement is presented in three parts. The first addresses the performance management system’s regulatory structure. Overall, the regulations that OPM and OMB develop to administer a performance-based pay system for executives serves as 

an important step for agencies in creating a clear linkage or line 

of sight between executives’ performance and organizational results. To qualify for the pay flexibilities, OPM must certify, and 

OMB must concur, that an agency’s system meets nine criteria. 

The certification criteria are generally consistent with key practices 

for effective performance management that GAO has identified in 

prior work. 

The second part of my statement addresses agencies’ views of 

OPM’s certification process. In our ongoing work for this Subcommittee and the Senate Committee on Homeland Security and 

Governmental Affairs on OPM’s capacity to lead and implement 

human capital reform, we asked agency Chief Human Capital Officers and Human Resource Directors to describe their experiences 

with OPM’s administration of the revised executive performance 

system. We heard a number of concerns from agencies regarding 

OPM’s ability to communicate expectations, guidance, and deadlines to agencies in a clear, consistent, timely manner. 

For example, one official noted that while OPM tries to point 

agencies in the right direction, it will not give agencies discrete requirements. This leads to uncertainty about what agencies must 

and should demonstrate to OPM. Some agency officials told us 

that, in some cases, OPM changed expectations and requirements 

midstream, with little notice or explanations. 

17

OPM explains that it intentionally allowed some ambiguity in 

the regulations for the new system, in an attempt to provide agencies with management flexibilities. However, OPM officials agree 

that agencies need better guidance and are working on improvements. The late issuance of guidance has also been problematic for 

agencies. OPM did not issue guidance for 2006 until January of 

that year and then clarified this guidance in a memorandum later 

that month. 

The third part of my statement addresses the need for OPM’s 

oversight of the implementation of agencies’ senior executive performance systems. Most agencies have been challenged to receive 

the full certification, meaning that the agency is able to provide 

documentation showing that the agency has designed and fully implemented a system meeting all nine criteria. According to the latest OPM data, performance systems at 25 agencies have been certified during calendar year 2006. Of these, only the Department of 

Labor’s SES system, as you earlier noted, received full certification. 

The remaining systems at 24 agencies received only provisional 

certification, meaning that the agency must provide documentation 

showing that its performance system meets design criteria but insufficient documentation exists to show that the system is fully implemented. 

These findings are not surprising. As GAO has noted in its past 

work, agencies could find it initially difficult to provide the necessary performance data as required for the two appraisal periods 

preceding the certification request. In addition, we reported that 

many agencies have undertaken valuable efforts to link their executive management systems to their organizational successes, but 

agencies need to strengthen that linkage to use their performance 

systems more strategically to achieve organizational goals. 

Agencies receiving full or provisional certification can use the 

higher pay rates. Going forward, it will be critical for OPM to continue to closely monitor the certification process to help ensure that 

provisional certifications do not become the norm and agencies 

reach full certification by not only developing but fully implementing systems for their senior executives. 

In summary, performance-oriented pay should only be one part, 

a critical part, of a larger organizational effort to improve the performance of an agency. High-performing organizations understand 

that they need senior leaders who are held accountable for results, 

drive continuous improvement, and lead and facilitate efforts to integrate human capital approaches with organizational goals. Although there have been some challenges with the new senior executive performance system, what will be important is how OPM 

works with agencies to meet the full certification criteria. 

Mr. Chairman, this concludes my statement. I will be happy to 

take questions when you are ready. 

Senator VOINOVICH. Thank you very much. Ms. Bonosaro, welcome. 

18

1The prepared statement of Ms. Bonosaro appears in the Appendix on page 00. 

TESTIMONY OF CAROL A. BONOSARO,1 PRESIDENT, SENIOR 

EXECUTIVES ASSOCIATION 

Ms. BONOSARO. Chairman Voinovich, Ranking Member Akaka, I 

am delighted to be here today, and the Senior Executives Association truly appreciates your interest in this new SES pay and performance management system, as well as your invitation to testify. 

As you know, many reports and studies have pointed to both the 

importance and the quality of the career Senior Executive Service 

corps, including the 1993 Volcker Commission, which observed, ‘‘No 

organization in this country is more dependent on qualified senior 

leadership than the Federal Government.’’

Given this, it is clearly in the public interest to attract and retain the best corps of senior executives possible and to compensate 

them and manage their performance in as fair and effective a manner as possible. 

We have had a clear interest in seeing this new system with the 

higher pay caps be successful, and all the association’s efforts have 

been directed to ensuring that result. 

Over the past 2 years, we received complaints regarding the system’s implementation. When those concerns about the new system 

persisted, we decided to conduct a survey to obtain information 

from the executives themselves regarding their experience with and 

views of the system. Through our partnership with Avue Technologies, we surveyed 850 respondents, which is approximately 12 

percent of the career corps. We consistently urged executives, because this was a voluntary survey, that we wanted to hear from 

both those who believed the system was wonderful and those who 

believed it was not wonderful. In other words, we wanted to hear 

both the good and the bad. 

The respondents’ characteristics closely mirror that of the senior 

executive corps, and I think that is very important because they 

are, indeed, very representative. And especially important is the 

fact that the salaries of those surveys almost perfectly mirror that 

of the SES corps as a whole. Therefore, I think you cannot argue 

persuasively that the respondents hold negative views because 

somehow or other they have not fared as well as others in this new 

system. 

So the end result, I think, is a survey that sought objective information, as well as opinion, and showed substantial evidence of 

problems in the implementation of the new system. To put it another way, although the provisions of the statute and the regulations—with a few clear exceptions, in our view—made sense, something has been ‘‘lost in translation’’ as the system has been implemented. 

The view of many survey respondents, as you know, is that agencies’ implementation of the pay system has often resulted in a disconnect between ratings and pay adjustments, imposed systems of 

arbitrary quotas, and failed to be transparent. 

While over 96 percent of respondents believe they should be held 

accountable for performance, 86 percent said the system had no effect on their performance, and 56 percent said it had no effect on 

19

their motivation. But 40 percent saw the system as having a negative effect on morale. 

The survey results clearly show three major issues that must be 

addressed: Many senior executives believe that de facto quotas are 

being enforced that are affecting their performance ratings; senior 

executives see no clear, consistent correlation between ratings and 

pay adjustments; and senior executives doing a good job at the fully 

successful or higher level often receive no salary adjustment. 

Simply put, the SES pay-for-performance system needs attention. 

Senator VOINOVICH. You mean 15 percent of the highest rated 

people got no increase? 

Ms. BONOSARO. Well, in fact, let me give you a little more detail 

on that because that was a number that took into account those in 

rating systems that involved 3, 4, and 5 levels. But if you look at 

those in 4-level systems, 7 percent of those with the very highest 

rating received no raise and no bonus; 5 percent of those with outstanding ratings in a 5-level system received no raise and no 

bonus. 

Now, Director Springer notes that a fully successful rating is a 

good rating and should be seen that way. But I think the problem 

is that if there is no pay adjustment at least to keep pace with the 

cost of living that one might receive, if all pay adjustments are permissible and you are doing a successful job, then the system is not 

making much sense. And so that is why we recommend a legislative solution to resolve that problem. 

Senator VOINOVICH. To make it mandatory? 

Ms. BONOSARO. Yes. 

Senator VOINOVICH. You are telling me that they did get a cost 

of living? 

Ms. BONOSARO. Correct. All pay adjustments are permissible in 

the system, and they are all to be based upon performance. None 

are required, so we have had—in fact, if you read through the comments in the survey, there was one executive who was a Presidential Rank Awardee who received nothing for an outstanding rating. That sends a very wrong message. 

Senator VOINOVICH. Is that in your survey? 

Ms. BONOSARO. Yes. 

Senator VOINOVICH. Specifically individuals that were in that 

category? 

Ms. BONOSARO. Yes. 

Senator VOINOVICH. OK. 

Ms. BONOSARO. We also believe the SES pay system should be 

reformed to recognize the reality that performance awards should 

become a substantial part of SES compensation. They should count 

towards retirement, and our legislative proposal suggests a way to 

do this. 

We also propose that an agency be required to inform an executive of his or her final rating and the reasons for it within a reasonable period of time, namely, 60 days. Seventeen percent of all respondents reported not having their ratings discussed with them at 

all last year, while 37 percent received only a cursory discussion. 

We think our legislative proposals are especially necessary because the most disturbing finding is that, with 31 percent of the 

SES currently eligible to retire and 90 percent eligible to retire 

20

over the next 10 years, 16 percent of the respondents indicated 

they are accelerating their plans to separate due to this new system. 

Senator VOINOVICH. Sixteen percent? 

Ms. BONOSARO. Sixteen percent. Forty-seven percent indicated 

the new system has had a negative effect on interest in the SES 

by GS–14s and GS–15s, and that I think is especially unfortunate. 

As Senator Akaka noted, 53 percent of those surveyed agreed 

that agencies rated executives to achieve a forced quota in 2005. 

Therefore, we recommend a statutory prohibition against the use 

of quotas or forced distributions. We recognize that such a prohibition exists in regulation, but our hope is that with a statutory prohibition, perhaps agencies will take this more seriously. 

We recommend that those entering the SES from the General 

Schedule be assured of a minimum 5-percent increase in their salary. At present, there is no requirement whatsoever, and agencies 

have adopted a variety of practices. 

To resolve the continuous round of certification and recertification, we recommend that all certifications no longer be on a calendar-year basis but last for 60 months, especially since OPM can 

rescind recertification at any time. OPM should provide clear and 

consistent advice to agencies on how to comply with requirements 

for certification 6 months before the recertification application is 

due or before decertifying an agency. 

Apart from the legislation we recommend, we believe that OPM 

and the agencies themselves must take steps to examine their 

practices and the problems identified in this report; namely, they 

must determine what has contributed to these results in spite of 

their best intentions. They need to look at the message sent, I 

think, by the focus each year in OPM’s annual report on SES ratings, the focus on the number, the percentage of drop in the highest ratings given. I think that continual focus sends a message 

which may be unintended. 

This is not an issue of pay. It is an issue of providing an SES 

system that is guided by the public interest. The successful mission 

accomplishment of the Federal Government depends on the expertise and skills of current and future highly qualified and experienced senior executives. 

I will close with a comment from a survey respondent, and I hope 

that you have an opportunity to read many of the comments we 

provided in the report because they provide a very graphic illustration of the survey data. A senior executive from the Veterans Administration wrote, ‘‘I have done about as well as any executive 

could have asked for under the performance and pay system. My 

pay raises and bonuses have been among the highest in the agency. 

But I see systemic flaws which are, in fact, demoralizing significant 

portions of our SES cadre and will weaken its foundations in the 

future.’’

Thank you for your time. 

Senator AKAKA. Mr. Chairman, I regret I must leave. I want to 

thank the Chairman for holding this important hearing and thank 

the witnesses for your testimony. And, Mr. Chairman, I would like 

to submit my questions for the record. 

21

Senator VOINOVICH. Without objection, and we expect the witnesses to get back to Senator Akaka. 

Thanks, Senator Akaka, for being here. 

Ms. Bonosaro, were performance appraisals for the SES conducted before this new system? 

Ms. BONOSARO. Yes. 

Senator VOINOVICH. And was that uneven throughout the SES, 

some of it good, some of it bad? 

Ms. BONOSARO. Well, we did a survey, in cooperation with OPM 

in 1999, and at that time we knew that we had some of these problems—in other words, some executives were not having regular 

performance appraisals, sit-down conversations, and so on. 

I think one of the issues that has been misconstrued is when we 

look back, as Director Springer referred to, there were places that 

had 97 percent of their executives at the highest rating, however, 

that occurred primarily in agencies such as the Department of Defense with three-level systems, so the highest rating was fully successful. One would, therefore, expect you would have 97 percent of 

all people at that level. 

I think performance evaluation has always been an issue, people 

making time for it, making it meaningful. But I think what we do 

know is that the executives who we talk to do not feel as though 

they need that kind of system to motivate them. They are so committed to their work, they work so hard, they are so interested in 

what they are doing and committed to the mission that a lot of 

them do not feel that this has added very much, frankly. 

Senator VOINOVICH. Well, it is a lot of work. 

Ms. BONOSARO. Yes. 

Senator VOINOVICH. It really is. If anybody has done it, you know 

it is a lot of work. I did it when I was mayor, and it was tough 

to get people to do it, to have them spend the time. We do it in 

my office now. 

It would seem to me, though, that members of the Senior Executive Service would welcome the opportunity to sit down and talk 

about what they are doing, what the goals are, how they fit in the 

organization, set goals, and then periodically review them. I know 

from experience that if somebody is doing a good job, they would 

like to be recognized for it. 

Ms. BONOSARO. I think it is clear that they do agree with that, 

that if a system like this is handled in a meaningful way, of course, 

they would support it. If, as Director Springer says, goals are developed that make sense, that can be measurable without being 

quantifiable, and that in the end you are judged fairly on the basis 

of how well you did, instead of being told that, well, we just cannot 

go in with that many outstandings, so we are going to give you a 

fully successful. That is where the pin goes in the balloon. 

Senator VOINOVICH. Probably what is driving that is money, isn’t 

it? 

Ms. BONOSARO. I think two things are driving it: In part perhaps 

money, but I think there is a perception somewhere along the way 

in the agencies that the way to be recertified is to come in with 

lower—keep lowering the number of executives being rated at the 

highest level. 

22

Senator VOINOVICH. Well, basically what it should be is that you 

should call it as it is. 

Ms. BONOSARO. Yes. 

Senator VOINOVICH. You don’t sit down with a bell curve. It 

should be based on reality and not on some type of comparative or 

quota system. 

Ms. BONOSARO. Well, if we, in fact, had a bell curve that reflected 

reality, then you would have to wonder whether our selection process for the SES were a problem, because we expect these people to 

be very high performers. 

Senator VOINOVICH. To be outstanding. Right, I get it. 

Ms. BONOSARO. Yes. 

Senator VOINOVICH. Are you familiar with the system at the Department of Labor? 

Ms. BONOSARO. No. 

Senator VOINOVICH. I would really be interested to know what it 

is that they are doing to have gained full certification. 

Ms. BONOSARO. Yes. 

Senator VOINOVICH. It would be interesting to find out from your 

folks over there how they feel about it and what things were put 

in place there that are absent from other places. 

Ms. BONOSARO. We can certainly try to do that. I think the one 

caution I would make is that I would strongly suspect that if we 

look at the report, there are agencies that were provisionally certified as well. It may be that what got an agency certified may not 

necessarily result in a better record on the kind of problems that 

we have identified, because I think that there is a disconnect somewhere along the way. I think most of the Chief Human Capital Officers would tell you, for example, that they have done everything 

possible to make the system transparent, that they do not understand why these executives say they have never seen the report or 

they do not know anything about how other people are rated, or 

how they stack up to others in the agency. But yet that is what 

we hear. 

So somehow or other, that is why I think that not only OPM but 

the agencies themselves have to sit down and take a hard look at 

where this is getting lost in translation along the way. 

Senator VOINOVICH. Well, you know, I would really appreciate 

some help on that because if somebody gets a certification, not provisional but a real certification, it indicates to me that they have 

got a system in place where the people that are in the system feel 

that it is a good system, that they have had the training and all 

the other incidental things that are necessary to make it successful. 

Ms. BONOSARO. I think one of the good questions to ask—and we 

have tried to learn this ourselves without very much success—is to 

gain a real understanding of what the requirements are in that certification process. 

I do know that they look at a sample of performance standards 

for senior executives to determine that they are, in fact, using 

measurable standards. But beyond that, I am not certain that they 

are asking, well, how are you training others in utilizing this system, for example. 

23

I suspect, from what I hear and from talking with OPM staff, 

that they are requesting data, they are looking at standards, but 

I think the question of how are you putting this in place—are you 

doing training and so on?—may be the missing link. But I do not 

know that for a fact. 

Senator VOINOVICH. Ms. Farrell, have you had a chance to look 

at what I have just been talking about and what some of these 

agencies are doing? Can you give me an idea, if you have one, what 

are the things in place that are making one system more successful 

than another one? Is there a formula that you have that can guarantee that—maybe not guarantee, but at least lend itself toward 

being successful with what we are trying to accomplish here? 

Ms. FARRELL. I think you are right, Mr. Chairman, best practices 

need to be shared, and the agencies that we have spoken with, including DOD, are hungry to learn how to move forward not only 

beyond establishing the framework for a performance-based system 

but how to implement it. I think that most of these agencies do 

have a handle on how to design such a system, but they do not 

know how to move forward with implementation. 

There could be lessons learned, obviously, from DOL because 

they have taken that next step. They are the only agency for this 

calendar year that does have a system that is fully implemented. 

That tells me that they are adhering to the nine criteria in regulations, which I noted earlier in my statement, follows the key practices that high-performing agencies use to be effective with performance management. 

I think that the CHCO Council is one venue to share the best 

practices, and we have been meeting with OPM and do know that 

the CHCO Council is planning to do more in that particular area 

of sharing the certification lessons learned. 

Senator VOINOVICH. I asked Ms. Springer the question of does 

she have the resources to effectively certify agencies. That is key. 

The answer to that was yes. Do you agree with that? 

Ms. FARRELL. Well, as you know, we have an engagement underway that is looking at OPM’s capacity to lead reforms such as the 

SES certification process, and they have been in a transformation 

themselves since 2003 of going from the rulemaker to the toolmaker. I do not think it is just a question of do they have enough 

people, but do they have the people with the right skills to help 

agencies, not just see if an agency is in compliance with certification requirements, but help the agency understand how to develop a road map or implement that road map into implementation 

for a performance-based appraised system. 

Senator VOINOVICH. When is that report going to be issued? 

Ms. FARRELL. That will be due to you late November of this year. 

Senator VOINOVICH. Well, I have been trying to get OMB to guarantee that agencies have the resources to do the job that they are 

being asked to do. One of the things that disturbs me is that the 

nondefense discretionary part of the budget is the one that is getting squeezed. If you look at some of these agencies, you are finding that they are flat-funded and, in fact, their budgets have gone 

down because they are not being adjusted for inflation, and they 

are just being squeezed to death. I will be anxious to see what your 

report has to say in that regard. 

24

Are you familiar at all, Ms. Bonosaro, with what they are doing 

over at OPM with the staff that do the certification? 

Ms. BONOSARO. Well, we developed an awful lot of paper for a 

long time, thinking we were obtaining the plans that were coming 

in for certification, until we learned one day that the actual performance management plans that were acceptable were ones that 

had been, in fact, approved even prior to this new system, and that 

where the action was was in the review of these standards and 

looking at a lot of data about pay adjustments and ratings and so 

on, which is why I agree with what GAO has found. They are focusing on the structure of a system, but not what happens when 

you actually put that into implementation, as best we can tell. 

Senator VOINOVICH. Is GAO in favor of this, if done properly? Or 

do you think this is a hassle and agencies should not get involved 

in it? 

Ms. BONOSARO. Well, frankly, we thought we had pay for performance because, as you know, the SES had a system of bonuses 

and Presidential Rank Awards. But as you also know, we had tremendous pay compression before this new system. 

Senator VOINOVICH. Yes, pay compression. 

Ms. BONOSARO. Tremendous. So this gave us the——

Senator VOINOVICH. And we lifted that. We worked very hard. 

Ms. BONOSARO. Yes. 

Senator VOINOVICH. They were limited, and we have increased 

that cap. Then when they were receiving bonuses they would not 

receive the full amount in a year because they would exceed the 

cap. 

Ms. BONOSARO. Yes, and we dealt with the annual compensation 

limit. 

I think what is unfortunate in the new system, though, is that 

we did lose locality pay for these people, which is another issue 

that we have addressed in our legislative recommendations, and 

that presents a real issue when you think about moving a senior 

executive, which as you know, is part of the system. That is the 

risk you take, to be geographically reassigned. Well, right now, God 

help you if you get moved from Kansas City to San Francisco, because there are no locality pay adjustments. And that, plus permissive cost-of-living adjustments, if you combine this, a lot of this together, the net result is you have those talented and smart GS–14s 

and GS–15s who should be aspiring to the SES now looking at it 

saying, Why would I want this? 

And so our view is we have got to make this system work. It has 

got to work well. And these are also the people who would be implementing a system for the rest of the civil service. So they have 

got to feel that they know that this can work well if they are going 

to make a system like this work well for those beneath them. 

Senator VOINOVICH. Ms. Farrell, as GAO has evaluated other 

personnel reforms, has GAO found the initial response the same 

kind that we have had out of this recent survey? Are you familiar 

with the survey? 

Ms. FARRELL. Well, the survey, as you know, was released last 

Monday. I am familiar with it. We have not studied the methodology. The study is a piece of information that adds, I think, some 

value. We feel that OPM should not just be relying upon numbers. 

25

It is important to consider if the agency’s performance-based system takes into account the client’s needs as well as the employee’s. 

Surveys are one measure to determine if the employees are actively 

involved in the design of the system. To our knowledge, the Federal 

Human Capital Survey has not taken employee feedback into account or how the agencies been doing with their administration of 

the performance-based system since 2004. Employee feedback on 

appraisal systems is something that could be rolled into that survey. 

Senator VOINOVICH. Well, I would be interested to get all this information together to give us some kind of a blueprint as to what 

needs to be done here in the next year or so to shape this up, and 

perhaps get together more often with folks over there to make sure 

that it happens. 

The SEA has recommended a statutory change to prohibit quotas 

or forced distribution of ratings under the system. However, the 

regulations already prohibit quotas and forced distribution. 

How do you feel, Ms. Bonosaro, that a statutory provision would 

be more effective than the current regulation? 

Ms. BONOSARO. Well, obviously we have not proposed any penalties here, but we hope that agencies would be inclined to take a 

statutory prohibition more seriously. 

There was one case of what we thought was pretty clear evidence 

of a quota in effect at one agency, where there was a set of PowerPoint slides that were being used to brief on the new system, one 

of which was literally a normal distribution curve. And we reported 

that to OPM. We never did learn what action they took, but our 

understanding was later that the recommendation was, well, why 

don’t you eliminate the slide, but we understand that this is just 

a—it was referred to as a ‘‘notional concept.’’

So that to us did not seem to send a very strong signal that this 

is not the way to implement this system. 

Senator VOINOVICH. Again, getting back to what I asked earlier, 

has your organization looked at what different agencies have done 

for training and preparation to go forward with pay-for-performance systems? 

Ms. BONOSARO. No. 

Senator VOINOVICH. You have not. How about GAO? Will that be 

in this report? 

Ms. FARRELL. No, that specifically will not. Our report looks at 

not just the SES certification, but other activities that OPM has 

had underway. The last time we looked at performance-based systems for the senior executives was in 2004, right before this new 

certification process was launched. At that time a number of agencies had efforts underway to fully implement performance-based 

systems, but they weren’t quite there yet with implementations. 

Obviously there are best practices. We are just not there yet. 

If I can say, Mr. Chairman, we do feel that pay-for-performance 

starts at the top with the senior leaders. The senior leaders lead 

by example, and much can be learned from the experience, as you 

acknowledged earlier, of implementing such pay reforms for the 

senior leaders that then will cascade down to employees in the rest 

of the agency. It is part of an executive’s stewardship responsibility 

26

for continuous improvement, and a performance-based system is a 

tool to help reach that end. 

Senator VOINOVICH. Well, as I said, it would be interesting to see 

what things Comptroller General Walker and his team put in place 

to make this a successful system, and what may be applicable to 

other agencies. In other words, here are the ten things that you 

need to do if you want to have a successful system. Training is a 

big thing. 

Ms. FARRELL. Right. 

Senator VOINOVICH. Communication is another one; the kind of 

commitment that is made from top management that this is a priority, and will be done right. The system should show employees 

how their job translates into the organization doing a better job 

than what it was doing; the feeling of individuals that are in the 

system that it is a fair system, it is transparent, it is not arbitrary, 

some of the other criteria. I would suspect that if we did a real investigation into agencies, we would find out that some have done 

a terrific job in that area and others have not done the job. 

That is why I made reference to the Spiral 1.1 at NSPS, that I 

think they have done a terrific job of educating and informing people, and up to now they are buying into it. We will see how it 

works out. So, I am anxious to see your report and look at some 

of these other things. I would welcome any other thoughts. I know 

you have made some recommendations for statutory changes. I 

would be more than happy to look at them, sit down with Senator 

Akaka, and see if we can get some kind of consensus on them. 

The SES are the leaders in the government, and a potential 90 

percent turnover in 10 years is frightening. I think back in 2001 

when I said by 2005 we were likely to lose—what was it? I think 

55 percent or even more of the workforce. I do not think we have 

lost them as some anticipated, have we? 

Ms. BONOSARO. No, although I think the numbers are inching up 

a bit because OPM’s retirement projections are continually changing now, I gather, at least for the SES, based upon the experience 

they are seeing. So it probably is inching up, but not only do we 

want to keep them as long as we can, but the critical thing that 

we are concerned about, indeed, is who will follow in their footsteps. 

Senator VOINOVICH. Yes. You said 15 percent of them are thinking about tipping their hat earlier. I mean, the truth of the matter 

is that many of these agencies are being run by folks that could 

leave now, and they are sticking around, frankly, I think, because 

they believe in their country and feel good about the work that 

they are doing and making a contribution. We certainly want to 

make sure that they are happy with that and not have a system 

that encourages them to leave. 

Ms. BONOSARO. Well, unfortunately, that is a lot of what comes 

through in the comments, and it is very sad because there are people who absolutely love what they are doing and care about their 

country, and in a couple of cases they say, ‘‘I have got to get out 

the door because what I am being subjected to’’—as I say, how it 

got translated down the line, ‘‘just makes no sense.’’

Senator VOINOVICH. I want to ask you one last question. I have 

been promoting, as Comptroller General Walker has, the creation 

27

of a Chief Management Officer in both the Departments of Homeland Security and Defense to really be dedicated to systemic 

change. That individual would serve a 7-year term so that some of 

these things that we are attempting to do have continuity. And 

from my experience as a mayor and governor, systemic change 

takes a long time to get done. 

What do you think about that? 

Ms. BONOSARO. Well, actually I do not think about that because 

our board of directors has to think about that. We discussed your 

proposal briefly a little while back, and our board has to come back 

to it because they do take an issue like that seriously, and will be 

happy to weigh in with you. 

Senator VOINOVICH. OK. In other words, they have not taken it 

up yet? 

Ms. BONOSARO. Correct. 

Senator VOINOVICH. I would really appreciate it if they did. I lobbied Congress for 18 years as mayor, governor, Chairman of the 

National Governors Association, and President of the National 

League of Cities. What discouraged me so often was how administrations often ignored the expertise of the folks that really run the 

place. I hope that more of them feel like they are not being ignored 

today than they were in the past. They want to see organizations 

change for the better. It seems to me that a lot of stuff just stops 

until the new political team is in place, which can take a year. 

That is the reason I think that having someone in charge of management would make a great deal of sense. So I appreciate your 

looking at it. 

Ms. BONOSARO. We will be happy to. 

Senator VOINOVICH. And I know, Ms. Farrell, that Comptroller 

General Walker feels strongly about it. 

Ms. FARRELL. Yes, he does. 

Senator VOINOVICH. As I say, I would like you to look at it because none of these things get done around here until you get a little traction, and you do not get traction until people that are respected in organizations say this is a sensible thing to do. 

I want to thank you very much. This has been a very good hearing. I am glad we had it. I keep asking people, How is the SES payfor-performance going? These reforms are so important. If we cannot get this thing in the SES, the chances of growing and cascading 

are out. Forget it, you know. 

Ms. BONOSARO. Yes. 

Senator VOINOVICH. So we want to work with you and make it 

a success. 

Ms. BONOSARO. Wonderful. We appreciate that. 

Senator VOINOVICH. Thank you. The hearing is adjourned. 

[Whereupon, at 12:33 p.m., the Subcommittee was adjourned.] 

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