GAO-05-812R Poor Performers in the Federal Workplace 

United States Government Accountability Office

Washington, DC 20548 

June 29, 2005 

The Honorable Tom Davis 

Chairman 

Committee on Government Reform 

House of Representatives 

The Honorable Jon C. Porter

Chairman 

Subcommittee on the Federal Workforce 

 and Agency Organization 

Committee on Government Reform 

House of Representatives 

Subject: Issues Related to Poor Performers in the Federal Workplace 

Many factors contribute to an organization’s success in accomplishing its mission, 

but none more than the effective management and utilization of its greatest asset—its 

employees. A high-performing organization relies on a dynamic workforce with the 

requisite talents, multidisciplinary knowledge, and up-to-date skills to ensure that it is 

equipped to accomplish its mission and achieve its goals. An effective performance 

management system can help an organization manage the day-to-day activities that 

allow employees to perform at their highest levels by creating a clear linkage—“line 

of sight”—between individual performance and organizational success. 

In the current environment where federal agencies are facing the challenges of 

transforming themselves, some agencies have begun to create results-oriented 

organizational cultures where unit and individual performance is linked to 

organizational goals. Effective performance management systems can help create 

such cultures by providing objective information to allow managers to make 

meaningful distinctions in performance in order to reward top performers and deal 

with poor performers. For example, final regulations establishing the Department of 

Homeland Security’s (DHS) new human capital system state that DHS supervisors 

and managers are to be held accountable for making meaningful distinctions among 

employees based on performance, fostering and rewarding excellent performance, 

and addressing poor performance. Although poor performance is not defined by 

statute, title 5 of the United States Code characterizes unacceptable performance as 

“performance of an employee which fails to meet established performance standards 
2 GAO-05-812R Poor Performers in the Federal Workplace 

in one or more critical elements of such employee’s position.”1 The DHS and the 

proposed Department of Defense (DOD) systems deny pay increases to employees 

with unacceptable performance ratings.2 

The exact number of poor performers in the federal government is unknown; 

however, it is generally agreed that even a small number of poor performers can have 

a negative impact on the work environment. In this regard, general agreement exists 

that poor performance should be addressed earlier rather than later, with the 

objective of improving the performance. Surveys of supervisors and employees have 

identified a number of impediments to taking action to deal with poor performance. 

Based on your request for information on issues relating to the management of poor 

performers in the federal government, our objectives were to: 

1) Synthesize and update currently available information related to the 

• magnitude of the poor performer issue in the federal government; 

• tools and approaches available to agencies, including DHS and DOD, for 

addressing poor performance; and 

• impediments identified to dealing with poor performers. 

2) Present key factors for addressing poor performance, based on past work and 

leading practices. 

To accomplish these objectives, we reviewed our prior work as well as that of the 

Merit Systems Protection Board (MSPB) and the Office of Personnel Management 

(OPM); data on performance appraisal ratings from OPM’s Central Personnel Data 

File (CPDF); and recently issued DHS’s final and DOD’s proposed regulations 

establishing their personnel and performance management systems. We performed 

our work from January through March 2005 in accordance with generally accepted 

government auditing standards. 

We provided detailed briefings on the results of our work to the requesters’ staffs.3 

The briefing slides are included in the enclosure. The purpose of this letter is to 

provide the slides to you along with additional information, as requested, on authority 

that federal agencies have to extend the duration of the probationary period for new 

employees. 

In brief, we reported that studies provide varying indicators of the magnitude of poor 

performance in the federal workforce. For example, while a 1999 OPM survey of 

supervisors estimated that poor performers constituted about 3.7 percent of the 

federal workforce, CPDF data indicate that of those employees rated in fiscal year 

2003, 0.3 percent received an unacceptable performance rating. In MSPB’s 2000 

survey, employees perceived that 14.3 percent of their coworkers were performing 

 

1

5 U.S.C. § 4301(3). See also 5 C.F.R. § 432.103(h). 

2

5 C.F.R. § 9701.323 and § 9701.335; proposed 5 C.F.R. § 9901.323 and § 9901.334. 3

On May 26, 2005, and on June 21, 2005, we briefed the requesters’ staffs. 
3 GAO-05-812R Poor Performers in the Federal Workplace

below reasonably expected levels. Some of the variance in the survey results can be 

attributed to the populations surveyed and the questions posed. 

Various tools and approaches are available to deal with performance, including poor 

performance. We provide several examples, which are not intended to be 

representative of all approaches available to agencies. Foremost, as we have stated, 

establishing an effective performance management system is important in providing 

candid and constructive feedback to help individuals maximize their performance. 

Effective use of probationary periods to rigorously review employee performance is 

also important since the probationary period may be viewed as the final opportunity 

to evaluate performance before permanent appointment. Furthermore, some 

agencies have used other approaches, unrelated to performance management or 

probationary employment, to address poor performance. Such approaches include 

denying pay increases to employees with unacceptable performance ratings, 

streamlining the appeals processes, and increasing the use of alternative dispute 

resolution to address workplace disputes that involve disciplinary or adverse actions. 

In response to the question about the authority available to agencies to extend the 

probationary period, we note that section 3321 of title 5 of the United States Code 

does not contain any specified time periods. However, the critical feature of dealing 

with poor performance during the probationary period is the limitation on appeal 

rights, and under chapter 75 of title 5, full appeal rights are extended to any employee 

(including a probationary employee) who has completed more than 1 year of 

continuous service.4

 Therefore, any decision to allow agencies to extend 

probationary periods beyond 1 year and to include the limitation on appeal rights

would require legislative action. For example, both DHS and DOD, which are exempt 

from chapter 75 of title 5, have provided their managers with the flexibility to go 

beyond the standard 1-year period of probation. We have reported that other 

agencies have been granted the authority to extend the probationary period. For 

example, demonstration projects at the Department of Commerce and the National 

Institute of Standards and Technology included probationary periods of up to 3 years 

for specific occupation groups.5 

Various studies, reports, and surveys of federal supervisors and employees we 

reviewed have identified various impediments to dealing with poor performance, 

including issues related to (1) time and complexity of the processes; (2) lack of 

training in performance management; and (3) communication, including the dislike of 

confrontation. Results of OPM’s 2004 Federal Human Capital Survey, published 

subsequent to the completion of our audit work, support the view that impediments 

still exist.6

 Responding to the statement: “In my work unit, steps are taken to deal 

 

4

5 U.S.C. § 7511 (a)(1)(A). See McCormick v. Department of the Air Force, 307 F.3d 1339 (Fed. Cir. 

2002). 

5

Chapter 47 of title 5 permits agencies to undertake demonstration projects in order to determine 

whether specified changes in personnel management policies or procedures could result in improved 

personnel management. For more information on the demonstration projects, see Human Capital: 

Implementing Pay for Performance at Selected Demonstration Projects, GAO-04-83 (Washington, 

D.C.: Jan. 23, 2004). 

6

Office of Personnel Management, What Do Federal Employees Say (Washington, D.C.: May 2005). 

The Federal Human Capital Survey is a tool that measures employees’ perceptions of whether, and to 

what extent, conditions characterizing successful organizations are present in their agencies. 
4 GAO-05-812R Poor Performers in the Federal Workplace 

with a poor performer who cannot or will not improve,” 27 percent of respondents 

agreed or strongly agreed, while 41 percent disagreed or strongly disagreed.7

 

Looking forward, it will be important to carefully evaluate the implementation of 

DHS’s and DOD’s personnel and performance management systems to determine 

their effectiveness and potential application governmentwide, including the tools and 

approaches that are aimed at addressing poor performance. However, this will take 

time. In the interim, it will be important to continue to institute performance-based 

cultures and provide adequate training and resources on performance management. 

_ _ _ _ _ _ 

We are sending copies of this report to the Director, Office of Personnel Management; 

the Chairman, Merit Systems Protection Board; and other interested parties. Copies 

will also be made available to others on request. Should you or your staff have any 

questions concerning this report, please contact me on 202-512-9490 or by e-mail at 

stalcupg@gao.gov. Marianne Anderson, Karin Fangman, Anthony Fernandez, Anthony 

Lofaro, Belva Martin, and Gregory Wilmoth were key contributors to this report. 

George H. Stalcup 

Director, Strategic Issues 

Enclosure 

 

 

7

By comparison, in OPM’s first survey in 2002, 25 percent agreed or strongly agreed that steps were 

taken to deal with poor performers, while 46 percent disagreed or strongly disagreed. 
5 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

Poor Performers in the 

Federal Workplace

Briefing for the House Committee on 

Government Reform

June 21, 2005
6 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

2

Contents

• Objectives

• Scope and Methodology

• Magnitude of the Poor Performer Issue

• Tools and Approaches Available for Addressing Poor Performance

• Impediments to Dealing with Poor Performance

• Key Factors for Addressing Poor Performance

• Appendix
7 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

3

Objectives

Based on a request for information and a contemporary perspective on 

issues related to management of poor performers in the federal

government, our specific objectives were as follows:

• Synthesize and update information related to the

• magnitude of the poor performer issue;

• tools and approaches for addressing poor performance, including 

new authorities provided to the Department of Homeland Security 

(DHS) and the Department of Defense (DOD); and

• impediments to dealing with poor performance.

• Present key factors for addressing poor performance, based on past work 

and leading practices.
8 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

4

Scope and Methodology

To accomplish our objectives, we reviewed the following: 

• prior work of government organizations with expertise in federal workforce issues 

and performance management, including GAO, the Merit Systems Protection 

Board (MSPB), and the Office of Personnel Management (OPM);

• performance management data from OPM’s Central Personnel Data File (CPDF); 

• recently issued DHS final and DOD proposed regulations establishing their personnel and performance management systems; and

• data on performance-related initiatives undertaken by other agencies, for example, recent pay-for-performance demonstration projects.

From these sources, we have selected illustrative examples of tools and approaches 

government agencies use (or plan to use) to deal with poor performance. These 

examples are not representative of all tools and approaches available to agencies.

We performed our work in Washington, D.C., from January through March 2005 in 

accordance with generally accepted government auditing standards.
9 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

5

Magnitude of the Poor Performer Issue

What is Poor Performance?

Although “poor performance” is not defined by statute, Title 5 of the United 

States Code characterizes unacceptable performance as “performance of an 

employee which fails to meet established performance standards in one or 

more critical elements of such employee’s position.”1

In a 1999 report, OPM characterized poor performers as “employees with 

whom you are seriously disappointed. You have little confidence that they will 

do their jobs right. You often have to redo their work, or you may have had to 

severely modify their assignments to give them only work that they can do, 

which is much less than you would otherwise want them to do. They are just 

not pulling their weight.”2

1 5 U.S.C. § 4301(3). See also, 5 C.F.R. § 432.103(h). 2 OPM, Office of Merit Systems Oversight and Effectiveness, Report of a Special Study, Poor Performers in Government: A Quest for the 

True Story (Washington, D.C.: January 1999).
10 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

6

Magnitude of the Poor Performer Issue

Poor Performance Distinguished from Misconduct

According to OPM, poor performance and misconduct are often interrelated; 

nevertheless, it is important to recognize the difference between the two. 

OPM describes misconduct as a failure to follow a workplace rule (e.g., 

tardiness and absenteeism) and poor performance as the failure of an 

employee to do his or her job at an acceptable level.3

3 OPM, Resource Center for Addressing and Resolving Poor Performance (Washington, D.C.: OPM) http://www.opm.gov/er/poor/understanding.asp (downloaded Feb. 25, 2005). 
11 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

7

Magnitude of the Poor Performer Issue

Scope of Issue

Data on employee performance appraisal ratings, as well as studies and 

surveys of federal supervisors, provide varying estimates of the magnitude of 

poor performance in the federal workforce. 

Data from the CPDF indicate that a very small percentage of employees were 

rated unacceptable.4

• CPDF data indicate that of those federal employees rated in fiscal year 

2003, 0.3 percent received an unacceptable performance rating while 

approximately 99.7 percent received a rating of acceptable or higher 

(includes ratings of acceptable, fully successful, exceeds expectations, 

and outstanding).5

4 CPDF information from OPM, as of September 30, 2003. These data are the most recent available. 5 About 21 percent of employees were not rated in fiscal year 2003.
12 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

8

Magnitude of the Poor Performer Issue

Scope of Issue (continued)

Studies and surveys of supervisors and employees, in comparison to CPDF 

data, provide higher estimates of those whose performance is poor or below 

reasonably expected levels.

• A January 1999 OPM survey of supervisors estimated that poor 

performers constitute 3.7 percent of the federal workforce.6

• Employees participating in the MSPB 2000 survey perceived that 14.3 

percent of their coworkers were performing below reasonably expected 

levels.7

MSPB survey results found that employees generally felt that their work units 

were more productive in cases when no coworkers in their unit were 

identified as poor performers. Moreover, studies suggest that even a small 

number of poor performers can have a negative effect on a work 

environment.8

6 OPM (1999). OPM reported a 95 percent confidence level that the percentage of poor performers is between 2.8 and 4.6 percent. 7 ,8 MSPB, Office of Policy and Evaluation, The Federal Workforce for the 21st Century, Results of the Merit Principles Survey 2000 (Washington, D.C.: September 2003). Fiscal year 2000 MSPB survey results are the most recent available.
13 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

9

Tools and Approaches Available for 

Addressing Poor Performance

There are a number of tools and approaches available to address performance, including 

poor performance, within a merit-based system that contains appropriate safeguards.

• An effective performance management system creates a clear linkage–“line of 

sight”– between individual performance and organizational success9 in a number of 

ways, including

• providing adequate training on the performance management system,

• using core competencies to reinforce organizational objectives,

• addressing performance on an ongoing basis, and

• ensuring that processes are transparent.

• A probationary period provides managers with a provisional period to rigorously review

employee performance.

• Other tools may apply to circumstances that cannot be resolved using performance 

management, probationary employment, or both:

• eliminating opportunity period,

• denying pay increases to employees with unacceptable performance,

• streamlining appeals processes to minimize delays, and

• increasing use of Alternative Dispute Resolution (ADR).

9 See GAO, Results-Oriented Cultures: Creating a Clear Linkage between Individual Performance and Organizational Success, GAO-03-488 

(Washington, D.C.: Mar. 14, 2003). In this report, we identify nine performance management practices for federal agencies to develop modern, 

effective, and credible performance management systems. See appendix for the highlights page of this report.

On the next five slides, we provide examples of each of these tools and approaches to 

illustrate how some agencies have used or propose to use them. As requested, we have 

included a number of examples of the new authorities provided to DHS and DOD.
14 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

10

Tools and Approaches Available for 

Addressing Poor Performance

• DHS allows, but does not require, the development of core 

competencies.11

• The Civilian Acquisition Workforce Personnel and Naval 

Research Laboratory demonstration projects12 use core 

competencies for all positions. For example, the Civilian 

Acquisition Workforce Personnel demonstration project 

uses core competencies such as customer relations and 

problem solving.

Using core 

competencies to 

reinforce 

organizational 

objectives

• DHS emphasizes training,10 including ensuring that 

managers and supervisors understand how to establish 

and communicate performance expectations and assess 

employee performance.

Providing adequate 

training to managers 

and supervisors on 

the performance 

management system

Approach Example

Tool – Performance management system

10 5 C.F.R. § 9701.401 (b) (5). The recent regulatory changes to DHS’s personnel management system have not been fully implemented. 11 5 C.F.R. § 9701.406 (c) (4). The appendix includes the highlights page for GAO-05-320T, which includes observations on the DHS regulations. 12 GAO, Human Capital: Implementing Pay for Performance at Selected Personnel Demonstration Projects, GAO-04-83 (Washington, D.C.: Jan. 23, 2004). 
15 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

11

Tools and Approaches Available for 

Addressing Poor Performance

• The new DHS and the proposed DOD human capital 

systems require that supervisors provide timely periodic 

feedback to employees, including one or more interim 

performance reviews during each appraisal period.13

Addressing 

performance on an 

ongoing basis through 

regular feedback and 

mentoring

• Demonstration projects at the Naval Sea Systems 

Command Warfare Center’s (NAVSEA) Newport division 

and the National Institute of Standards and Technology 

(NIST) publish aggregated information on internal Web 

sites about the performance management process, such 

as performance ratings and average pay increase 

amounts.14

Ensuring that 

processes are 

transparent to provide 

fairness in the 

performance 

management system

Approach Example

Tool – Performance management system

13 5 C.F.R. § 9701.407; proposed 5 C.F.R. § 9901.407. 14 GAO-04-83. 
16 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

12

Tools and Approaches Available for 

Addressing Poor Performance

• As part of its new human capital system, DHS includes 

an initial service period, similar to a probationary period, 

of up to 2 years for designated positions in order for 

employees to demonstrate appropriate competencies.16

• Demonstration projects at NIST and the Department of 

Commerce gained authority to establish probationary 

periods of up to 3 years for specific occupation groups.17

Using a probationary 

period to rigorously 

review employee 

performance15

Approach Example

Tool – Probationary period

15 MSPB also recommends providing agencies with the flexibility to establish the length of the probationary period. See MSPB, Office of 

Policy and Evaluation, Making the Public Service Work: Recommendations for Change (Washington, DC: Sept. 3, 2002). 16 DHS regulations treat removal during an initial service period the same as removal during a probationary period. 5 C.F.R. § 9701.605. 17 GAO-04-83.
17 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

13

Tools and Approaches Available for 

Addressing Poor Performance

• DHS and proposed DOD regulations provide supervisors 

the option of not using an opportunity period before taking 

an adverse action.18

Eliminating the 

opportunity period to 

streamline processes 

to deal with 

unacceptable 

performance

• DHS and proposed DOD systems deny pay increases to 

employees with unacceptable performance ratings.19

• The demonstration project at NAVSEA-Newport has the 

authority to deny a pay increases to employees rated 

unacceptable.20

Denying pay increases 

to employees with 

unacceptable 

performance

Approach Example

Other 

18 5 C.F.R. § 9701.408 (b)(1); proposed 5 C.F.R. § 9901.408 (b)(1). 19 5 C.F.R. § 9701.323 and § 9701.335; proposed 5 C.F.R. § 9901.323 and § 9901.334. 20 GAO-04-83. Note: While Newport had the authority to deny pay increases under these circumstances, no employees were actually rated 

unacceptable during the demonstration project.
18 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

14

Tools and Approaches Available for 

Addressing Poor Performance

• New DHS regulations shorten time allocated for an 

employee to respond to adverse action and provide an 

accelerated MSPB adjudication process.21

Streamlining appeals 

processes to minimize 

delays in processing 

appeals, while 

ensuring due process 

protections

• New DHS and proposed DOD regulations continue to 

support the use of ADR, including use of ombudsmen as 

an informal alternative for addressing conflicts.22

Increasing use of ADR 

to make the redress 

process less 

adversarial and 

time-consuming

Approach Example

Other 

21 5 C.F.R. §§ 9701.609-9701.611, 5 C.F.R. § 9701.706, and 5 C.F.R. § 9701.707. 22 5 C.F.R. § 9701.705; proposed 5 C.F.R. § 9901.806.
19 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

15

Impediments to Dealing with Poor Performance

• Recent reports, studies, and surveys of federal supervisors and 

employees23 identify elements of the performance management process

and the appeals process that can act as impediments to dealing with poor 

performance.

• These sources often mention the following issues when discussing

impediments to dealing with poor performance:

• time involved and the complexity of the processes;

• lack of training in performance management; and

• communication issues, including dislike of confrontation.

23 MSPB (1999, 2002, 2003); OPM (1999).
20 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

16

Impediments to Dealing with Poor Performance

Performance

Management

Process

MSPB surveys and reports include the following selected examples

of impediments to dealing with poor performance:24

• Supervisors may find processes to document performance 

deficiencies and take corrective action,25 such as developing a 

Performance Improvement Plan (PIP), time-consuming and 

complex.

• Supervisors may lack confidence in the performance 

management system for a number of reasons, such as perceiving 

that upper management may not support them in taking adverse 

actions.

• Supervisors, although they may have strong technical skills, may

lack experience and training in performance management, as 

well as an understanding of the procedures for taking corrective

actions against poor performers.

MSPB reported that 74 percent of supervisors linked problems in dealing with poor 

performers to a lack of confidence in the performance management system.26

24 MSPB (2003). 25 See appendix, slide 22, which outlines formal processes for dealing with poor performers. 26 See footnote 24.
21 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

17

Impediments to Dealing with Poor Performance

Performance

Management

Process

• Ongoing communication between supervisors and employees 

concerning job expectations and performance was lacking.

• Dislike of confrontation may deter supervisors from taking steps to 

address performance issues. 

• Fear of creating a negative work environment may make 

supervisors reluctant to address poor performers.

• Sufficient time to determine whether probationary employee 

should be retained was not available.

MSPB found that 40 percent of supervisors said that supervising an employee during an 

improvement period was “very difficult.” 28

27 MSPB (1999, 2002, 2003); OPM (1999). 28 MSPB (2003).

MSPB and OPM surveys and reports include the following selected 

examples of impediments to dealing with poor performance:27
22 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

18

Impediments to Dealing with Poor Performance

29 MSPB (Results of 2000 Merit Principles Survey). 30 See appendix, slide 23, which lists the avenues of redress for employees facing adverse actions. 31 See footnote 29.

• Supervisors may be hesitant to take action to address 

employee performance due to complicated and 

time-consuming appeals processes, lack of adequate support 

from human resources personnel and management, or both.30

• Supervisors may fear that taking an action will result in an 

employee filing an Equal Employment Opportunity complaint.

Appeals

Process

MSPB reported that 39 percent of supervisors identified an employee filing a discrimination 

complaint as a reason for their experiencing difficulty in dealing with a performance problem.31

MSPB surveys and reports include the following selected examples

of impediments to dealing with poor performance:29
23 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

19

Key Factors for Addressing Poor Performance

1. Instituting a modern, effective, and credible performance management system, 

with appropriate safeguards,

• provide a line of sight between individual performance and 

organizational success, 

• ensure that processes are well understood and transparent, and

• hold managers accountable by measuring whether they are using the 

tools and approaches available to address poor performance.

DOD and DHS have recently been given flexibility in establishing their own human 

resources management systems. It will be important to carefully evaluate the 

implementation of changes to the DHS and DOD personnel and performance 

management systems to determine their effectiveness and potential application 

governmentwide, including the approaches that address poor performance.

Additionally, based on past work and leading practices of GAO, OPM, and MSPB, 

several key factors could help agencies manage performance, specifically dealing 

effectively with poor performance.
24 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

20

Key Factors for Addressing Poor Performance

2. Addressing poor performance and resolving redress matters as early as possible, 

• conduct a rigorous review of probationary employees’ performance,

• provide performance-related feedback on a continual basis, and

• emphasize use of ADR.

3. Incorporating adequate training and resources on performance management,

• use “just-in-time” training on techniques for addressing poor performance 

and resolving appeals, and

• ensure that supervisors have adequate support from upper-level 

management and human capital staff in taking action to deal with poor 

performance.
25 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

21

Appendix

• Formal Processes for Dealing with Poor Performers

• Avenues of Redress for Employees Facing Adverse Action

• Additional Sources of Information

 MSPB Reports and Articles and OPM Information

 GAO Reports and Testimonies

 GAO Highlights
26 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

22

Formal Processes for Dealing with Poor 

Performers

Under chapter 43 of title 5 of the United States Code, supervisors, in order to remove or 

reduce in grade a nonprobationary employee for unacceptable performance, must provide

• an opportunity to improve (e.g., PIP), 

• a 30-day advance notice of proposed action,

• the opportunity to respond, and

• a written decision.

Agency actions under chapter 43 must be supported by substantial evidence.

Under chapter 75 of title 5 of the United States Code, supervisors may also remove, reduce in 

grade, or take another adverse action32 against a nonprobationary employee for 

performance or conduct reasons “for such cause as will promote the efficiency of the 

service.” Under this process, supervisors must provide

• a 30-day advance notice of proposed action, 

• the opportunity to respond, and

• a written decision.

Agency actions under chapter 75 must be supported by a preponderance of the evidence.33

32 Other adverse actions under this formal process include suspension for more than 14 days, reduction in pay, or a furlough of 30 days or less. 33 The evidence standard for adverse actions is lower in chapter 43, but managers often opt to use chapter 75 because the process does not 

require use of PIPs.
27 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

23

Avenues of Redress for Employees Facing 

Adverse Actions

Employees may:

• Appeal action to MSPB.34

• File a discrimination complaint with their agencies, which provides a 

right to a hearing before an administrative judge, an appeal of the 

decision to the Equal Employment Opportunity Commission, and a 

full review in federal district court.

• File a grievance.

34 Probationary employees may appeal their removals to MSPB under only limited circumstances, including allegations of discrimination 

on the basis of marital status or political affiliation. 5 C.F.R. § 315.806.
28 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

24

Additional Sources of Information

MSPB Reports and Articles

• Removing Poor Performers in the Federal Service (Washington, D.C.: 

September 1995).

• Federal Supervisors and Strategic Human Resources Management

(Washington, D.C.: June 1998).

• What’s on the Minds of Federal Human Capital Stakeholders

(Washington, D.C.: May 2004).

• “Drawing Distinctions in Performance and Rewards,” Issues of MERIT, 

(Washington, D.C.: September 2004).

• “Lessons Learned on Removing Poor Performers,” Issues of MERIT, 

(Washington, D.C.: Summer 2004).

(See http://www.mspb.gov/studies/studies_archive.html.)
29 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

25

Additional Sources of Information

OPM information

• Addressing and Resolving Poor Performance, An Interactive Tool for 

Supervisors (Washington, D.C.: January 1998). (CD format.)

GAO Reports and Testimonies

• Federal Employee Redress: An Opportunity for Reform. GAO/T-GGD96-42. Washington, D.C.: November 29, 1995.

• Performance Management: How Well is the Government Dealing with 

Poor Performers. GAO/GGD-91-7. Washington, D.C.: October 2,1990.
30 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

26

Additional Sources of Information

GAO Highlights 

Highlights from these GAO reports are included at the end of this appendix:

• Results-Oriented Cultures: Creating a Clear Linkage between 

Individual Performance and Organizational Success. GAO-03-488. 

Washington, D.C.: March 14, 2003.

• Human Capital: Implementing Pay for Performance at Selected 

Personnel Demonstration Projects. GAO-04-83. Washington, D.C.: 

January 23, 2004.

• Human Capital: Preliminary Observations on Final Department of 

Homeland Security Human Capital Regulations. GAO-05-320T. 

Washington, D.C.: February 10, 2005.

• Human Capital: Preliminary Observations on Proposed DOD National

Security Personnel System Regulations. GAO-05-432T. Washington, 

D.C.: March 15, 2005.
31 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure
32 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 
33 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

Why GAO Did This Study 

Highlights 

Accountability Integrity Reliability 

www.gao.gov/cgi-bin/getrpt?GAO-05-320T. 

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Eileen Larence 

at (202) 512-6806 or larencee@gao.gov. 

Highlights of GAO-05-320T, a testimony 

before the Subcommittee on Oversight of 

Government Management, the Federal 

Workforce, and the District of Columbia, 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate 

At the center of any agency 

transformation, such as the one 

envisioned for the Department of 

Homeland Security (DHS), are the 

people who will make it happen. 

Thus, strategic human capital 

management at DHS can help it 

marshal, manage, and maintain the 

people and skills needed to meet its 

critical mission. Congress provided 

DHS with significant flexibility to 

design a modern human capital 

management system. DHS and the 

Office of Personnel Management 

(OPM) have now jointly released 

the final regulations on DHS’s new 

human capital system. 

Last year, with the release of the 

proposed regulations, GAO 

observed that many of the basic 

principles underlying the 

regulations were consistent with 

proven approaches to strategic 

human capital management and 

deserved serious consideration. 

However, some parts of the human 

capital system raised questions for 

DHS, OPM, and Congress to 

consider in the areas of pay and 

performance management, adverse 

actions and appeals, and labor 

management relations. GAO also 

identified multiple implementation 

challenges for DHS once the final 

regulations for the new system 

were issued. 

This testimony provides 

preliminary observations on 

selected provisions of the final 

regulations. 

February 10, 2005 

HUMAN CAPITAL 

Preliminary Observations on Final 

Department of Homeland Security 

Human Capital Regulations 

What GAO Found 

GAO believes that the regulations contain many of the basic principles that 

are consistent with proven approaches to strategic human capital 

management. For example, many elements for a modern compensation 

system—such as occupational clusters, pay bands, and pay ranges that take 

into account factors such as labor market conditions—are to be 

incorporated into DHS’s new system. However, these final regulations are 

intended to provide an outline and not a detailed, comprehensive 

presentation of how the new system will be implemented. Thus, DHS has 

considerable work ahead to define the details of the implementation of its 

system and understanding these details is important in assessing the overall 

system. 

The implementation challenges we identified last year are still critical to the 

success of the new system. Also, DHS appears to be committed to continue 

to involve employees, including unions, throughout the implementation 

process. Specifically, according to the regulations, employee representatives 

or union officials are to have opportunities to participate in developing the 

implementing directives, hold four membership seats on the Homeland 

Security Compensation Committee, and help in the design and review the 

results of evaluations of the new system. Further, GAO believes that to help 

ensure the quality of that involvement, DHS will need to 

Ensure sustained and committed leadership. A Chief Operating 

Officer/Chief Management Officer or similar position at DHS would 

serve to elevate, integrate, and institutionalize responsibility for this 

critical endeavor and help ensure its success by providing the 

continuing, focused attention needed to successfully complete the 

multiyear conversion to the new human capital system. 

Establish an overall communication strategy. According to DHS, its 

planned communication strategy for its new human capital system will 

include global e-mails, satellite broadcasts, Web pages, and an internal 

DHS weekly newsletter. A key implementation step for DHS is to assure 

an effective and on-going two-way communication effort that creates 

shared expectations among managers, employees, customers, and 

stakeholders. 

While GAO strongly supports human capital reform in the federal 

government, how it is done, when it is done, and the basis on which it is 

done can make all the difference in whether such efforts are successful. 

GAO’s implementation of its own human capital authorities, such as pay 

bands and pay for performance, could help inform other organizations as 

they design systems to address their human capital needs. The final 

regulations for DHS’s new system are especially critical because of the 

potential implications for related governmentwide reforms. 

United States Government Accountability Office 
34 GAO-05-812R Poor Performers in the Federal Workplace

Enclosure 

(450425) 

What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-432T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Derek B. 

Stewart at (202) 512-5559 or 

stewartd@gao.gov. 

Highlights of GAO-05-432T, a testimony to 

the Subcommittee on Oversight of 

Government Management, the Federal 

Workforce, and the District of Columbia, 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate 

March 15, 2005

HUMAN CAPITAL

Preliminary Observations on Proposed 

DOD National Security Personnel System 

Regulations 

Given DOD’s massive size and its geographically and culturally diverse 

workforce, NSPS represents a huge undertaking for DOD. DOD’s initial 

process to design NSPS was problematic; however, after a strategic 

reassessment, DOD adjusted its approach to reflect a more cautious, 

deliberate process that involved more stakeholders, including OPM. 

Many of the principles underlying the proposed NSPS regulations are 

generally consistent with proven approaches to strategic human capital 

management. For instance, the proposed regulations provide for 

(1) elements of a flexible and contemporary human resources management 

system—such as pay bands and pay for performance; (2) DOD to rightsize its 

workforce when implementing reduction-in-force orders by giving greater 

priority to employee performance in its retention decisions; and 

(3) continuing collaboration with employee representatives. (It should be 

noted that 10 federal labor unions have filed suit alleging that DOD failed to 

abide by the statutory requirements to include employee representatives in 

the development of DOD’s new labor relations system authorized as part of 

NSPS.) 

GAO has three primary areas of concern: the proposed regulations do not 

(1) define the details of the implementation of the system, including such 

issues as adequate safeguards to help ensure fairness and guard against 

abuse; (2) require, as GAO believes they should, the use of core 

competencies to communicate to employees what is expected of them on 

the job; and (3) identify a process for the continuing involvement of 

employees in the planning, development, and implementation of NSPS. 

Going forward, GAO believes that (1) the development of the position of 

Deputy Secretary of Defense for Management, who would act as DOD’s 

Chief Management Officer, is essential to elevate, integrate, and 

institutionalize responsibility for the success of DOD’s overall business 

transformation efforts, including its new human resources management 

system; (2) DOD would benefit if it develops a comprehensive 

communications strategy that provides for ongoing, meaningful two-way 

communication that creates shared expectations among employees, 

employee representatives, and stakeholders; and (3) DOD must ensure that 

it has the institutional infrastructure in place to make effective use of its new 

authorities before they are operationalized. 

GAO strongly supports the concept of modernizing federal human capital 

policies, including providing reasonable flexibility. There is general 

recognition that the federal government needs a framework to guide human 

capital reform. Such a framework would consist of a set of values, 

principles, processes, and safeguards that would provide consistency across 

the federal government but be adaptable to agencies’ diverse missions, 

cultures, and workforces. 

The Department of Defense’s 

(DOD) new human resources 

management systemthe National 

Security Personnel System 

(NSPS)will have far-reaching 

implications for the management of 

the department and for civil service 

reform across the federal 

government. The National Defense 

Authorization Act for Fiscal Year 

2004 gave DOD significant 

authorities to redesign the rules, 

regulations, and processes that 

govern the way that more than 

700,000 defense civilian employees 

are hired, compensated, promoted, 

and disciplined. In addition, NSPS 

could serve as a model for 

governmentwide transformation in 

human capital management. 

However, if not properly designed 

and effectively implemented, it 

could severely impede progress 

toward a more performance- and 

results-based system for the federal 

government as a whole. 

On February 14, 2005, the Secretary 

of Defense and Acting Director of 

the Office of Personnel 

Management (OPM) released for 

public comment the proposed 

NSPS regulations. This testimony 

(1) provides GAO’s preliminary 

observations on selected 

provisions of the proposed 

regulations, (2) discusses the 

challenges DOD faces in 

implementing the new system, and 

(3) suggests a governmentwide 

framework to advance human 

capital reform. 
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