United States Government Accountability Office

GAO Report to Congressional Committees

HUMAN CAPITAL

DOD Needs to 

Improve 

Implementation of and 

Address Employee 

Concerns about Its 

National Security 

Personnel System 

September 2008 

 

GAO-08-773 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 2008

HUMAN CAPITAL

DOD Needs to Improve Implementation of and 

Address Employee Concerns about Its National 

Highlights of GAO-08-773, a report to Security Personnel System 

congressional committees 

The Department of Defense (DOD)

has begun implementing the 

National Security Personnel

System (NSPS), its new human

capital system for managing 

civilian personnel performance. As 

of May 2008, about 182,000 civilian 

employees were under NSPS.

DOD’s implementation of NSPS 

will have far-reaching implications 

for DOD and civil service reform 

across the federal government. 

Based on our prior work looking at 

performance management in the

public sector and DOD’s challenges

in implementing NSPS, GAO 

developed an initial list of 

safeguards that NSPS should 

include to ensure it is fair, 

effective, and credible. Congress 

required GAO to determine (1) the 

extent to which DOD has 

implemented internal safeguards to 

ensure the fairness, effectiveness, 

and credibility of NSPS; and (2) 

how DOD civilian personnel 

perceive NSPS and what actions 

DOD has taken to address these 

perceptions. To conduct this work,

GAO analyzed relevant documents 

and employee survey results; 

interviewed appropriate officials; 

and conducted discussion groups 

with employees and supervisors at 

12 selected installations. 

What GAO Recommends

GAO is recommending that DOD 

improve the implementation of

some safeguards and develop and

implement an action plan to 

address employee concerns about 

NSPS. DOD generally concurred 

with our recommendations, with 

the exception of one requiring 

predecisional review of ratings. 

While DOD has taken some steps to implement internal safeguards to ensure 

that NSPS is fair, effective, and credible, the implementation of some 

safeguards could be improved. Specifically, DOD has taken steps to (1) 

involve employees in the system’s design and implementation, (2) link 

employee objectives and agency goals, (3) train employees on the system’s

operation, (4) require ongoing performance feedback between supervisors 

and employees, (5) better link individual pay to performance, (6) allocate 

agency resources for the system, (7) include predecisional safeguards to 

determine if rating results are fair and nondiscriminatory, (8) provide 

reasonable transparency, and (9) provide meaningful distinctions in employee 

performance. GAO believes continued monitoring of all of these safeguards is

needed to ensure that DOD’s actions are effective as more employees become 

covered by NSPS. GAO also determined that DOD could immediately improve 

its implementation of three safeguards. First, DOD does not require a third 

party to analyze rating results for anomalies prior to finalizing employee 

ratings, and therefore it is unable to determine whether ratings are fair and 

nondiscriminatory before they are finalized. Second, the process lacks 

transparency because DOD does not require commands to publish final rating 

distributions, though doing so is recognized as a best practice by DOD and 

GAO. Third, NSPS guidance may discourage rating officials from making

meaningful distinctions in employee ratings because it indicated that the 

majority of employees should be rated at the “3” level, on a scale of 1 to 5, 

resulting in a hesitancy to award ratings in other categories. Without steps to 

improve implementation of these safeguards, employee confidence in the 

system will ultimately be undermined. 

Although DOD employees under NSPS are positive regarding some aspects of

performance management, DOD does not have an action plan to address the 

generally negative employee perceptions of NSPS. According to DOD’s survey 

of civilian employees, employees under NSPS are positive about some aspects 

of performance management, such as connecting pay to performance.

However, employees who had the most experience under NSPS showed a 

negative movement in their perceptions. For example, the percent of NSPS 

employees who believe that NSPS will have a positive effect on DOD’s 

personnel practices declined from 40 percent in 2006 to 23 percent in 2007. 

Negative perceptions also emerged during discussion groups that GAO held. 

For example, employees and supervisors were concerned about the excessive 

amount of time required to navigate the process. Although the Office of 

Personnel Management issued guidance recommending that agencies use 

employee survey results to provide feedback to employees and implement an 

action plan to guide their efforts to address employee assessments, DOD has 

not developed an action plan to address employee perceptions. While it is

reasonable for DOD to allow employees some time to accept NSPS because 

organizational changes often require time to adjust, it is prudent to address 

persistent negative employee perceptions. Without such a plan, DOD is unable 

to make changes that could result in greater employee acceptance of NSPS.

To view the full product, including the scope 

and methodology, click on GAO-08-773. 

For more information, contact Brenda S. 

Farrell at (202) 512-3604 or farrellb@gao.gov. 
Contents 

Letter 1

Results in Brief 5

Background 9

DOD Has Taken Steps to Implement Internal Safeguards to Ensure 

Fairness of NSPS; However, Implementation of Some 

Safeguards Could Be Improved 15 

Although DOD Civilian Employees under NSPS Identified Some 

Positive Aspects of the System, DOD Does Not Have a Plan for

Addressing the Generally Negative Employee Perceptions of 

NSPS 29

Conclusions 41

Recommendations for Executive Action 42 

Agency Comments and Our Evaluation 43 

Appendix I Scope and Methodology 49 

Appendix II Example of Linking Performance to Mission and 

Objectives 61 

Appendix III Additional Responses to 2007 Status of Forces Survey 

of DOD Civilian Employees 62 

Appendix IV Other Themes Discussed by Department of Defense 

Civilians during GAO Discussion Groups 67 

Appendix V Comments from the Department of Defense 69 

Appendix VI GAO Contact and Staff Acknowledgments 75 

Related GAO Products 76 

Page i GAO-08-773 NSPS Implementation
Tables 

Table 1: Number of DOD Civilian Employees Phased into NSPS, as 

of May 2008 11 

Table 2: Percentage of Employees in Each Rating Category by DOD 

and Pay Pools Visited 28 

Table 3: Estimated Percentage of Responses from Status of Forces 

Survey for DOD Civilian Employees, May 2007 31 

Table 4: Estimated Percentage of Spiral 1.1 Employees’ Responses 

for Select Questions from the May 2007, November 2006, 

and May 2006 Administrations of the Status of Forces 

Survey for DOD Civilian Employees 33 

Table 5: Composition of Discussion Groups 57 

Table 6: Composition of Discussion Groups by Demographic 

Category per Component 59 

Table 7: Estimated Percentage of Employees Responding to 

Questions about Overall Satisfaction and Leadership and 

Management in May 2007 Status of Forces Survey-Civilian 62 

Table 8: Estimated Percentage of Employees Responding to 

Questions about Leadership and Management, 

Motivation/Development/Involvement, and Performance 

Management in May 2007 Status of Forces Survey-Civilian 63 

Table 9: Estimated Percentage of Employees Responding to 

Question about Performance Management in May 2007 

Status of Forces Survey-Civilian 64 

Table 10: Estimated Percentage of Employees Responding to

Question about Performance Management in May 2007 

Status of Forces Survey-Civilian 64 

Table 11: Estimated Percentage of Employees Responding to

Questions about Retention and Commitment in May 2007 

Status of Forces Survey-Civilian 65 

Table 12: Estimated Percentage of Employees Responding to

Questions about the National Security Personnel System in 

May 2007 Status of Forces Survey-Civilian 65 

Table 13: Estimated Percentage of Employees Responding to

Questions about the National Security Personnel System in 

May 2007 Status of Forces Survey-Civilian 66 

Table 14: Additional Themes that Emerged during Discussion 

Groups with Select Employees 67 

Page ii GAO-08-773 NSPS Implementation
Figures 

Figure 1: NSPS Design and Implementation Team Organization 10 

Figure 2: Phases of NSPS Performance Management Process 12 

Figure 3: Example of NSPS Pay Pool Organization 13 

Figure 4: Example of Linking Performance to Mission and 

Objectives 61

Abbreviations 

DOD Department of Defense 

NSPS National Security Personnel System 

SOFS Status of Forces Survey 

PEO Program Executive Office

PAA Performance Appraisal Application

DMDC Defense Manpower Data Center 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 

Page iii GAO-08-773 NSPS Implementation
United States Government Accountability Office

Washington, DC 20548 

 

September 10, 2008 

Congressional Committees 

In 2007, we reported that strategic human capital management remained a

high-risk area because the federal government now faces one of the most 

significant transformations to the civil service in half a century, as 

momentum grows toward making governmentwide changes to agency pay, 

classification, and performance management systems.1

 The Department of 

Defense (DOD) is in the initial stages of implementing its new human 

capital system for managing civilian personnel—the National Security 

Personnel System (NSPS). NSPS significantly redesigned the rules, 

regulations, and processes that govern the way that civilian employees are 

hired, compensated, and promoted at DOD. As a result, DOD is in a period 

of transition and faces an array of challenges and opportunities to enhance 

performance, ensure accountability, and position itself for the future. 

In a series of testimonies prior to the enactment of the NSPS legislation in 

2003, we raised a number of critical issues about the proposed regulations 

for NSPS.2

 Since then, we have provided congressional committees with 

insight on DOD’s process to design its new personnel management system, 

the extent to which DOD’s process reflects key practices for successful 

transformation, the need for internal controls and transparency of funding,

and the most significant challenges facing DOD in implementing NSPS.3

 1

GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.: January 2007). In

2001, we designated strategic human capital management as a high-risk area because of the 

federal government's long-standing lack of a consistent strategic approach to marshaling,

managing, and maintaining the human capital needed to maximize government 

performance and ensure its accountability. GAO, High-Risk Series: An Update, 

GAO-01-241 (Washington, D.C.: January 2001).

2

GAO, Defense Transformation: Preliminary Observations on DOD’s Proposed Civilian 

Personnel Reforms, GAO-03-717T (Washington, D.C.: Apr. 29, 2003); Defense 

Transformation: DOD’s Proposed Civilian Personnel Systems and Governmentwide 

Human Capital Reform, GAO-03-741T (Washington, D.C.: May 1, 2003); and Human

Capital: Building on DOD’s Reform Efforts to Foster Governmentwide Improvements, 

GAO-03-851T (Washington, D.C.: June 4, 2003). See Related GAO Products at the end of 

this report for additional reports we have issued related to NSPS and performance

management in the federal government. 

3

GAO, Human Capital: DOD Needs Better Internal Controls and Visibility Over Costs for 

Implementing Its National Security Personnel System, GAO-07-851 (Washington, D.C.: 

July 16, 2007) and Human Capital: Observations on Final Regulations for DOD’s 

National Security Personnel System, GAO-06-227T (Washington, D.C.: Nov. 17, 2006). 

Page 1 GAO-08-773 NSPS Implementation
While GAO supports human capital reform in the federal government, how 

such reform is done, when it is done, and the basis upon which it is done 

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

Specifically, we have noted in testimonies and reports that DOD and other 

federal agencies must ensure that performance management systems 

contain appropriate internal safeguards, such as assuring reasonable 

transparency in connection with the results of the performance 

management process. We developed an initial list of safeguards based on 

our extensive body of work looking at the performance management 

practices used by leading public sector organizations both in the United 

States and in other countries as well as on our experiences in 

implementing a modern performance management system for our own 

staff at GAO.

4

 Implementing internal safeguards is a way to ensure that 

pay-for-performance systems in the government are fair, effective, and

credible.5

 Additionally, we reported that the implementation of NSPS will 

have far-reaching implications, not just for DOD, but for civil service 

reform across the federal government because NSPS could serve as a 

model for governmentwide transformation in human capital. 

In light of these challenges and implications, in March 2007 the Senate

Armed Services Committee asked us to review the implementation of the 

NSPS performance management system to determine the extent to which

DOD has effectively incorporated internal safeguards that we had 

previously identified as key to successful implementation of performance 

management systems in the federal government and assess employee 

attitudes toward NSPS. Further, the National Defense Authorization 

 4

GAO, Results Oriented Cultures: Creating a Clear Linkage between Individual

Performance and Organizational Success, GAO-03-488 (Washington, D.C.: Mar.14, 2003).

5

GAO, Post-Hearing Questions for the Record Related to the Department of Defense’s 

National Security Personnel System (NSPS), GAO-06-582R (Washington, D.C.: Mar. 24,

2006). 

Page 2 GAO-08-773 NSPS Implementation
Act for Fiscal Year 20086 required us to determine the extent to which 

DOD has effectively incorporated accountability mechanisms and internal

safeguards in NSPS and to assess employee attitudes toward NSPS. We 

assessed the extent to which DOD’s performance management system has 

incorporated the following safeguards: 7

 

• Involve employees, their representatives, and other stakeholders in the 

design of the system, to include employees directly involved in 

validating any related implementation of the system. 

• Assure that the agency’s performance management system links 

employee objectives to the agency’s strategic plan, related goals, and 

desired outcomes. 

• Implement a pay-for-performance evaluation system to better link 

individual pay to performance, and provide an equitable method for 

appraising and compensating employees. 

• Provide adequate training and retraining for supervisors, managers, and

employees in the implementation and operation of the performance 

management system. 

• Institute a process for ensuring ongoing performance feedback and

dialogue between supervisors, managers, and employees throughout 

the appraisal period, and setting timetables for review. 

• Assure that certain predecisional internal safeguards exist to help 

achieve consistency, equity, nondiscrimination, and nonpoliticization 

of the performance management process (e.g., independent 

reasonableness reviews by a third party or reviews of performance 

 6

Pub. L. No. 110-181, § 1106(c) (2008). Specifically, section 1106(c)(1)(B) directs GAO to

conduct reviews in calendar years 2008-2010 to evaluate the extent to which the

Department of Defense has effectively implemented accountability mechanisms, including 

those established in 5 U.S.C. § 9902(b)(7) and other internal safeguards. The accountability 

mechanisms specified in 5 U.S.C. § 9902(b)(7) include those that GAO previously identified 

as internal safeguards key to successful implementation of performance management 

systems. For example see GAO, Post-Hearing Questions for the Record Related to the 

Department of Defense’s National Security Personnel System (NSPS), GAO-06-582R 

(Washington, D.C.: Mar. 24, 2006). GAO has emphasized the need for internal safeguards

since DOD first proposed NSPS. For example see GAO, Posthearing Questions Related to 

Strategic Human Capital Management, GAO-03-779R (Washington, D.C.: May 22, 2003). 

7

For the purpose of this report, we define safeguards to include accountability 

mechanisms. 

Page 3 GAO-08-773 NSPS Implementation
rating decisions, pay determinations, and promotions before they are 

finalized to ensure that they are merit-based, as well as pay panels who 

consider the results of the performance appraisal process and other 

information in connection with final pay decisions). 

• Assure that there are reasonable transparency and appropriate

accountability mechanisms in connection with the results of the 

performance management process, including periodic reports on 

internal assessments and employee survey results relating to 

performance management and individual pay decisions while 

protecting individual confidentiality.

• Assure that the agency’s performance management system results in 

meaningful distinctions in individual employee performance. 

• Provide a means for ensuring that adequate agency resources are 

allocated for the design, implementation, and administration of the 

performance management system. 

To address this congressional request and mandate, we established the 

following objectives: (1) To what extent has DOD implemented 

accountability mechanisms and internal safeguards to ensure the fairness,

effectiveness, and credibility of NSPS; and (2) How do DOD civilian 

personnel perceive NSPS and what actions has DOD taken to address 

these perceptions? 

To determine the extent to which DOD had implemented safeguards to 

ensure the fairness, effectiveness, and credibility of NSPS, we identified 

safeguards specified in the National Defense Authorization Act for Fiscal 

Year 2008, as well as other safeguards GAO has previously identified as 

key internal safeguards, and analyzed regulations and other guidance

provided by officials in DOD and the four components’ headquarters—the 

Army, Navy, Air Force, and Fourth Estate.8

 We also reviewed documents, 

such as pay pool business rules and regulations obtained during 12 site 

visits—3 for each component—to military installations. Further, we 

interviewed appropriate agency officials at various levels within DOD and 

 8

The Department of the Navy’s NSPS policies encompass Marine Corps civilians. The

Fourth Estate includes all organizational entities in DOD that are not in the military 

departments or the combatant commands, for example, the Office of the Secretary of 

Defense, the Joint Staff, the Office of the DOD Inspector General, the defense agencies, and 

DOD field activities. 

Page 4 GAO-08-773 NSPS Implementation
conducted interviews with officials of various management levels at each 

site we visited. The sites were selected because they contained a large 

number or concentrated group of civilian employees that had been placed 

under NSPS and were geographically distributed throughout the United 

States. In addition, to determine how DOD civilian employees’ perceive 

NSPS, we analyzed the results of DOD’s May 2006, November 2006, and

May 2007 Status of Forces Survey (SOFS) of civilian employees. These 

surveys gauge initial employee attitudes toward NSPS and in our analysis, 

we begin to identify trends.9

 Further, we assessed DOD’s survey 

methodology and found that DOD’s surveys of DOD civilians were 

generally conducted in accordance with standard research practices; 

however, there were some areas that could be improved. We also 

conducted small group discussions with employees and supervisors at 

each of the 12 sites we visited. While the information from our discussion 

groups is not generalizable to the entire population of DOD civilians, it 

provides valuable insight into civilians’ perceptions about the 

implementation of NSPS. For more information about our scope and 

methodology, see appendix I. We conducted this performance audit from 

August 2007 to July 2008 in accordance with generally accepted 

government auditing standards. Those standards require that we plan and

perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable

basis for our findings and conclusions based on our audit objectives. 

While DOD has taken some steps to implement internal safeguards to 

ensure that the NSPS performance management system is fair, effective, 

and credible, the implementation of some of these safeguards could be

improved. Specifically, DOD has taken some steps to (1) involve 

Results in Brief 

 9

SOFS is a series of Web-based surveys of the total force that allows DOD to (1) evaluate

existing programs/policies, (2) establish baselines before implementing new

programs/policies, and (3) monitor progress of programs/policies and their effects on the 

total force. Since 2003, the Defense Manpower Data Center has administered the SOFS for 

civilian personnel on a semiannual basis. SOFS for civilian employees includes questions 

about compensation, performance, and personnel processes. Regular administrations every 

6 months occurred between October 2004 and November 2006, and annual administrations

commenced in 2007. All surveys include outcome or "leading indicator" measures such as

overall satisfaction, retention intention, and perceived readiness, as well as demographic 

items needed to classify individuals into various subpopulations. In 2004, DOD added

questions to SOFS for civilian employees pertaining specifically to NSPS. These surveys 

also include items for the annual reporting requirement under the National Defense 

Authorization Act for Fiscal Year 2004. 

Page 5 GAO-08-773 NSPS Implementation
employees in the system’s design and implementation; (2) link employee

objectives and the agency’s strategic goals and mission; (3) train and 

retrain employees in the system’s operation; (4) provide ongoing 

performance feedback between supervisors and employees; (5) better link 

individual pay to performance in an equitable manner; (6) allocate agency

resources for the system’s design, implementation, and administration; (7) 

include predecisional internal safeguards to determine whether rating 

results are consistent, equitable, and nondiscriminatory; (8) provide 

reasonable transparency of the system and its operation; and (9) impart 

meaningful distinctions in individual employee performance. For 

example, all 12 sites we visited trained employees on NSPS, and the DODwide tool used to compose self-assessments links employees’ objectives to 

the commands’ or agencies’ strategic goals and mission. We believe

continued monitoring of all of these safeguards is needed to ensure that 

DOD’s actions are effective as implementation proceeds and more 

employees become covered by NSPS. We also determined that DOD could 

immediately improve its implementation of three safeguards: predecisional 

internal safeguards, reasonable transparency, and meaningful distinctions 

in employee performance. First, DOD is unable to determine whether 

NSPS rating results are nondiscriminatory before they are finalized 

because it does not require a third party to analyze the predecisional rating 

results for anomalies. According to Program Executive Office (PEO) 

officials, DOD does not require a predecisional analysis because of 

concerns that pay pool panels might adjust their results even if 

assessments did not warrant changes. PEO officials also stated that 

DOD’s analysis of final results by demographics is sufficient to ensure 

fairness and nondiscrimination. Second, employees at some installations 

do not have transparency over the final results of the performance 

management process because DOD does not require commands to publish 

rating distributions for employees. In fact, 3 of the sites we visited 

decided not to publish the overall final rating and share distribution 

results. Third, NSPS performance management guidance may discourage 

rating officials from making meaningful distinctions in employee 

performance because this guidance emphasized that most employees 

should be evaluated as a “3” (or “valued performer”) on a scale of 1 to 5. 

According to NSPS implementing issuance, rating results should be based

on how well employees complete their job objectives using the 

performance indicators. Although DOD and most of the installations we 

visited emphasized that there was not a forced distribution of ratings, 

some pay pool panel members acknowledged that there was a hesitancy to

award employee ratings in categories other than “3”. Until DOD effectively 

implements these three safeguards, employees will not have assurance 

that NSPS is fair, equitable, and credible, which ultimately could 

Page 6 GAO-08-773 NSPS Implementation
undermine employees’ confidence and result in failure of the system. We 

are recommending that DOD improve the implementation of these three 

safeguards by (1) requiring a third party to perform predecisional 

demographic and other analysis as appropriate for pay pools, (2) requiring 

overall final rating results to be published, and (3) encouraging pay pools 

and supervisors to use all categories of ratings as appropriate. In 

commenting on a draft of this report, DOD concurred with our 

recommendation to require overall final rating results to be published and 

partially concurred with our recommendation to encourage pay pools and

supervisors to use all categories of ratings as appropriate. DOD did not 

concur with our recommendation to require a third party to perform 

predecisional demographic analysis as appropriate for pay pools, noting, 

among other things, that postdecisional analysis of results is more useful 

to identify barriers and corrective actions. We, however, continue to 

believe that our recommendation has merit and that identifying an 

anomaly in the ratings prior to finalizing them would allow management to

investigate the situation and determine whether any non-merit-based 

factors contributed to the anomaly. 

Although DOD employees under NSPS are positive regarding some aspects 

of the NSPS performance management system, DOD does not have an 

action plan to address the generally negative employee perceptions of 

NSPS identified in both the department’s SOFS for civilian employees and

discussion groups we held at 12 select installations. According to our 

analysis of DOD’s most recent survey from May 2007, NSPS employees 

expressed slightly more positive attitudes than their DOD colleagues who 

remain under the General Schedule system about some goals of 

performance management, such as connecting pay to performance and 

receiving feedback regularly. For example, an estimated 43 percent of 

NSPS employees compared to an estimated 25 percent of all other DOD 

employees said that pay raises depend on how well employees perform 

their jobs.10 However, responses from NSPS employees with the most 

experience under NSPS showed a downward movement in their attitude 

toward other elements of the system. For example, the estimated 

percentage of employees who agreed that their performance appraisal was 

a fair reflection of their performance declined from 67 percent in May 2006 

to 52 percent May 2007. In addition, the percent of NSPS employees who 

 10These estimated percentages are based on a 95 percent confidence interval and margin of 

error within +/-2 percent as reported in DOD’s Defense Manpower and Data Center’s SOFS

of civilian employees. 

Page 7 GAO-08-773 NSPS Implementation
believe that NSPS will have a positive effect on DOD’s personnel practices 

dropped from 40 percent in May 2006 to 23 percent in 2007. Our focus 

group meetings gave rise to views consistent with DOD’s survey results. 

While some civilian employees and supervisors under NSPS seemed 

optimistic about the intent of the system, most of the DOD employees and 

supervisors we spoke with expressed a consistent set of wide-ranging 

concerns. Specifically, employees noted: (1) NSPS’s negative impact on 

employee motivation and morale, (2) the excessive amount of time and 

effort required to navigate the performance management process, (3) the 

potential influence that employees’ and supervisors’ writing skills have on

panels’ assessments of employee ratings, (4) the lack of transparency and

understanding of the pay pool panel process, and (5) the rapid pace at 

which the system was implemented, which often resulted in employees 

feeling unprepared and unable to find answers to their questions. These 

negative attitudes are not surprising given that organizational 

transformations often entail fundamental and radical change that require 

an adjustment period to gain employee acceptance and trust. To address 

employee attitudes and acceptance, the Office of Personnel Management 

issued guidance that recommends—and we believe it is a best practice—

that agencies use employee survey results to provide feedback to 

employees and develop and implement an action plan that guides their 

efforts to address the results of employee assessments. However, 

according to PEO officials, DOD has not developed a specific action plan 

to address critical issues identified by employee perceptions, because they

want employees to have more time under the system before making 

changes. Without such a plan, DOD is unable to make changes that 

address employee perceptions that could result in greater employee 

acceptance and, ultimately, the successful implementation of the 

performance management system. We are recommending that DOD 

develop and implement a specific action plan to address employee 

perceptions of NSPS ascertained from DOD’s surveys and employee focus 

groups. The plan should include actions to mitigate employee concerns 

about, for example, the potential influence that employees’ and 

supervisors’ writing skills have on the panels’ assessment of employee 

ratings or other issues consistently identified by employees or supervisors. 

DOD partially concurred with our recommendation, noting that it will 

address areas of weakness identified in its comprehensive, in progress 

evaluation of NSPS and is institutionalizing a continuous improvement 

strategy. 

Page 8 GAO-08-773 NSPS Implementation
The National Defense Authorization Act for Fiscal Year 2004 provided 

DOD with the authority to establish a pay-for-performance management 

system as part of NSPS.11DOD established a team to design and implement 

NSPS and manage the transformation process. In April 2004, the Secretary 

of Defense appointed an NSPS Senior Executive to, among other things, 

design, develop, and implement NSPS. Under the Senior Executive’s 

authority, the Program Executive Office (PEO) was established as the 

central policy and program office for NSPS. The PEO’s responsibilities 

includes designing the human resource/pay-for-performance systems, 

developing communication and training strategies, modifying personnel 

information technology, and preparing joint enabling regulations and 

internal DOD implementing regulations. As the central DOD-wide program 

office, the PEO directs and oversees the components’ NSPS program 

managers, who report to their parent components and the NSPS PEO. 

These program managers also serve as their components’ NSPS action 

officers and participate in the development, planning, implementation, and 

deployment of NSPS. Figure 1 shows the organization of the NSPS design 

and implementation team. 

Background 

 11Pub. L. No. 108-136, § 1101 (2003) (codified at 5 U.S.C. §§ 9901-9904). The National 

Defense Authorization Act for Fiscal Year 2008 amended 5 U.S.C. § 9902. Pub. L. No. 110-

181, § 1106 (2008). 

Page 9 GAO-08-773 NSPS Implementation
Figure 1: NSPS Design and Implementation Team Organization 

Direct reporting authority

Indirect reporting authority

Source: DOD.

Senior 

Executive

Deputy PEO

Army Program

Management Office

Air Force Program

Management Office

Department of the

Navy Program

Management Officea

Washington

Headquarters Service

Program Management

Officeb

Director, Human 

Resources Systems

Deputy

Training Implementation 

and deployment

Program 

evaluation

Human Resources

Information Systems

Legislative and 

public affairs Legal Budget and 

financial management

Deputy

Director, Labor 

Relations and 

Appeals

Overarching 

Integrated 

Product Team

Senior Advisory

Group

Chief of Staff Program Executive 

Officer (PEO)

a

Includes the U.S. Navy and the U.S. Marine Corps. 

b The Washington Headquarters Services is a field activity that reports to the Director of 

Administration and Management, which has oversight responsibility for DOD’s “Fourth Estate” 

entities. The “Fourth Estate” encompasses those organizational entities in DOD that are not in the 

military departments or the combatant commands. These include the Office of the Secretary of 

Defense, the Joint Staff, the Office of the Inspector General of DOD, the defense agencies, and DOD 

field activities.

Page 10 GAO-08-773 NSPS Implementation
Table 1 shows DOD has phased (or spiraled) in over 182,000 civilian 

employees into NSPS as of May 2008.

12 Subsequently, the National Defense 

Authorization Act for Fiscal Year 2008 prohibited the Secretary of Defense 

from converting more than 100,000 employees to NSPS in any calendar 

year. In response to this and other legislative changes that resulted in 

revising NSPS regulations, the PEO has not developed a new timeline for 

phasing in the remaining approximately 273,000 employees.13 

Table 1: Number of DOD Civilian Employees Phased into NSPS, as of May 2008 

Spiral Number of employees

1.1 11,391

1.2 67,586

1.3 35,147

2.1 17,305

2.2 50,438

Employees not associated with a particular spiral 763

Total number of employees 182,630

Source: GAO analysis of DOD data. 

Note: Employees not associated with a particular spiral—or conversion group—are employees who 

are currently under NSPS, but whose positions were not coded to show the spiral. 

The performance management process of NSPS is ongoing and consists of 

several phases that are repeated in each annual performance cycle, as 

shown in figure 2. The planning phase that starts the cycle involves 

supervisors (or rating officials) and employees working together to 

establish performance plans. This includes (1) developing job objectives—

the critical work employees perform that is aligned with their 

organizational goals and focused on results—and (2) identifying 

contributing factors—the attributes and behaviors that identify how the 

critical work established in the job objectives is going to be accomplished 

 12DOD has not applied NSPS to the Senior Executive Service because the latter’s members 

are under a separate governmentwide pay-for-performance system. Additionally, DOD has

not applied NSPS to the DOD intelligence components, which include the Defense 

Intelligence Agency, because these components are initiating implementation of a

performance management system called the Defense Civilian Intelligence Personnel 

System (DCIPS). See 10 U.S.C. § 1601.

13According to PEO officials, DOD originally planned to convert approximately 700,000 

civilian employees to NSPS; however, recent legislative changes decreased the total 

number of eligible civilians to approximately 450,000. 

Page 11 GAO-08-773 NSPS Implementation
(e.g., cooperation and teamwork). After the planning phase comes the 

monitoring and developing phase, during which ongoing communication 

between supervisors and employees occurs to ensure that work is 

accomplished; attention is given to areas that need to be addressed; and 

managers, supervisors, and employees have a continued and shared 

understanding of expectations and results. In the rating phase, the 

supervisor prepares a written assessment that captures the employee’s 

accomplishments during the appraisal period. In the final—or reward—

phase, employees should be appropriately rewarded or compensated for

their performance with performance payouts. During this phase, 

employee assessments are reviewed by multiple parties to determine 

employees’ ratings and, ultimately, performance payouts. 

Figure 2: Phases of NSPS Performance Management Process 

Plan Monitor

Reward Rate Develop

Source: GAO rendering of DOD data.

The performance management process under NSPS is organized by pay 

pools. A pay pool is a group of employees who share in the distribution of 

a common pay-for-performance fund.14 The key parties that make up pay 

pools are the employee, supervisor, higher-level rating authority, pay pool 

 14Criteria to distinguish pay pools may include, but are not limited to, organization 

structure, employee job function, location, and organization mission. 

Page 12 GAO-08-773 NSPS Implementation
panel, pay pool manager, performance review authority, and, in some 

instances, the sub-pay pool15 as shown in figure 3. 

Figure 3: Example of NSPS Pay Pool Organization 

 

Performance 

review authority

(PRA)

Pay pool

manager

Pay pool panel member 

(sub-pay pool manager)

Employee

Employee

Employee

Employee

Employee

Rating official 

(sub-pay pool 

panel member)

Rating official 

(sub-pay pool 

panel member)

Rating official 

(sub-pay pool 

panel member)

Rating official Rating official

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Sub-pay

pool

Source: DOD.

Pay pool

panel member

15 Where determined appropriate due to the size of the pay pool population, the complexity 

of the mission, the need to prevent conflicts of interest, or other similar criteria, sub-pay 

pool panels may be organized in a structure subordinate to the pay pool panel. Sub-pay

pool panels normally operate under the same requirements and guidelines provided to the 

pay pool panel to which they belong. 

Page 13 GAO-08-773 NSPS Implementation
Each of these groups has defined responsibilities under the performance 

management process. For example, employees are encouraged to be 

involved throughout the performance management cycle, including: 

initially working with their supervisors to develop job objectives and 

identify associated contributing factors; identifying and recording 

accomplishments and results throughout the appraisal period; and 

participating in interim reviews and end-of-year assessments, for example 

by preparing self-assessments. Supervisors (or rating officials) are 

responsible for effectively managing the performance of their employees. 

This includes: 

• clearly communicating performance expectations; 

• aligning performance expectations and employee development with 

organization mission and goals; 

• working with employees to develop written job objectives reflective of 

expected accomplishments and contributions for the appraisal period 

and identifying applicable contributing factors; 

• providing employees meaningful, constructive, and candid feedback

relative to performance expectations, including at least one

documented interim review; 

• making meaningful distinctions among employees based on 

performance and contribution; and 

• providing recommended ratings of record, share assignments, and 

payout distributions to the pay pool. 

The higher level reviewer, typically the rating official's supervisor, is 

responsible for reviewing and approving job objectives and recommended 

employee assessments. The higher level reviewer is the first step in 

assuring consistency of ratings, because this individual looks across 

multiple ratings. The next level of review is with the pay pool panel or, in

some cases, the sub-pay pool panel. The pay pool panel is a board of 

management officials who are usually in positions of line authority or in 

senior staff positions with resource oversight for the organizations, 

groups, or categories of employees comprising the pay pool membership.16

 16Pay pool panel members may not participate in payout deliberations or decisions that 

directly impact their own performance assessment or pay.

Page 14 GAO-08-773 NSPS Implementation
The primary function of the pay pool panel is the reconciliation of ratings 

of record, share distribution, and payout allocation decisions. Each pay 

pool has a manager who is responsible for providing oversight of the pay 

pool panel. The pay pool manager is the final approving official of the 

rating of record. Performance payout determinations may be subject to 

higher management review by the performance review authority17 or 

equivalent review process. The performance review authority provides 

oversight of several pay pools, and addresses the consistency of 

performance management policies within a component, major command, 

field activity, or other organization as determined by the component. 

Although DOD has taken some steps to implement internal safeguards to 

ensure that the NSPS performance management system is fair, effective, 

and credible, implementation of some safeguards could be improved. 

Specifically, DOD has taken some steps to implement the safeguards 

identified in the National Defense Authorization Act for Fiscal Year 2008

as well as safeguards GAO previously identified. These safeguards include: 

(1) involving employees in the design and implementation of the system; 

(2) linking employee objectives and the agency’s strategic goals and 

mission; (3) training and retraining employees and supervisors in the 

system’s operation; (4) requiring ongoing performance feedback between 

supervisors and employees; (5) providing a system to better link individual 

pay to performance in an equitable manner; (6) allocating agency 

resources for the design, implementation, and administration of the 

system; (7) including predecisional internal safeguards to determine 

whether rating results are consistent, equitable, and nondiscriminatory; (8) 

providing reasonable transparency of the system and its operation; and (9) 

assuring meaningful distinctions in individual employee performance. 

GAO has previously reported that agencies should continually perform 

management controls, such as monitoring of programs.18 We further 

reported that agencies can conduct this ongoing monitoring internally or 

through separate evaluations that are performed by the agency Inspector

General or an external auditor, such as GAO. While we believe continued 

DOD Has Taken Steps 

to Implement Internal 

Safeguards to Ensure 

Fairness of NSPS; 

However,

Implementation of 

Some Safeguards 

Could Be Improved 

 17The senior organization official, usually a member of the Senior Executive Service or a

General/Flag officer, serves as the Performance Review Authority (PRA). DOD components

may provide additional guidance for the establishment of PRAs. The responsibilities of the 

PRA may be assigned to an individual management official or organizational unit or group.

18GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 

Page 15 GAO-08-773 NSPS Implementation
monitoring of all of these safeguards is needed to ensure that DOD’s 

actions are effective as implementation proceeds and more employees 

become covered by NSPS, we determined that DOD’s implementation of 

three safeguards—predecisional internal safeguards, reasonable 

transparency, and meaningful distinctions—could be improved 

immediately. Until DOD effectively implements these safeguards, 

employees will not have assurance that the system is fair, equitable, and 

credible, which ultimately could undermine employees’ confidence and 

result in failure of the system. 

Involve Employees in the 

Design and 

Implementation of the 

System 

DOD has taken several steps to involve employees and their stakeholders 

in the design and implementation of NSPS. For example, DOD solicited 

comments from employees and unions representing DOD employees 

during the design of NSPS. Specifically, PEO officials said the department

received over 58,000 comments from people in response to the proposed 

rules published in the Federal Register during the design phase.19 These 

PEO officials further stated that unions were appropriately engaged in the 

process and were afforded the opportunity to comment on NSPS through

the formal “meet and confer” process with the union coalition.20 However,

according to union representatives we spoke with, DOD did not 

appropriately involve the unions in the design of NSPS. Moreover, in 2005, 

unions representing DOD employees filed a lawsuit against DOD claiming, 

among other things, that DOD blocked the unions from meaningful 

participation in developing NSPS regulations. However, the U.S. District 

Court for the District of Columbia ruled in favor of DOD, finding that it 

satisfied its statutory obligation to collaborate with the unions.21 

 19Department of Defense Human Resources Management and Labor Relations Systems, 70 

Fed. Reg. 66,116, 66,121 (Nov. 1, 2005). 

20In 2004, 36 of the unions voluntarily formed the United DOD Workers’ Coalition, 

otherwise referred to as the “union coalition,” which allowed the workers to have one voice

in regards to NSPS. Each union elects representatives to speak on their behalf at 

collaborative coalition meetings. DOD has 45 unions, which are affiliated with 1,500 local 

bargaining units. 

21American Federation of Government Employees, AFL-CIO, et al. v. Rumsfeld, et al., 422 

F. Supp. 2d 16, 35 (D.D.C. 2006), see also American Federation of Government Employees,

AFL-CIO, et al. v. Gates, et al., 486 F. 3d 1316, 1327 (D.C. Cir. 2007). The National Defense 

Authorization Act for Fiscal Year 2008 repealed the statutory provisions at issue in both 

cases. 

Page 16 GAO-08-773 NSPS Implementation
Initially, according to PEO officials, DOD involved some civilian 

employees in the preliminary design stages of NSPS. For example, in 2004, 

PEO sponsored about 100 focus groups throughout DOD, including 

overseas locations.22 Through these focus groups, PEO received 

comments, ideas, and suggestions, which were summarized and used in 

various design elements of NSPS. During 2004, DOD also conducted town 

hall meetings both domestically and overseas to provide employees with 

information about the status of the design and development of NSPS, 

communicate with the workforce, and solicit additional thoughts and 

ideas. Some of these town hall meetings were broadcast live and 

videotapes of some of these meetings were later rebroadcast on military 

television channels and websites. The performance management system 

in DOD’s original implementing issuance was based on employees being 

rated on standard performance factors such as cooperation and 

teamwork. However, according to a PEO official, DOD received 

comments from management officials, individual employees, and unions 

representing DOD employees opposing this approach. As a result, DOD 

changed the performance management system. At the time of our review, 

supervisors rated employees on specific job objectives that were either 

written for the individual employee by the rating official and employee or

were standard for an organization, e.g., the Army’s standard supervisory 

objective. In addition, the original performance factors became 

contributing factors that are identified as essential to completing the job 

objective. 

Furthermore, as part of the system design in 2005, DOD awarded a 

contract to develop a performance factor model and associated 

benchmark descriptors to use in NSPS. The contractors conducted 

workshops with a sample of 95 “experienced” employees from three 

occupation categories—professional/analytic, supervisory/managerial, and 

technician/support. During these workshops, the participants reviewed 

and revised the performance factors and work behaviors to ensure their 

relevance, accuracy, and applicability across jobs and organizational 

components, so that the factors and work behaviors could serve as a basis 

for clearly communicating performance expectations. Following the 

workshops, the contractor administered Web-based questionnaires to all 

 22Separate focus groups were held for employees, civilian and military supervisors, and 

managers and practitioners from the human resource, legal, and equal employment 

opportunity communities. The focus group participants were asked to comment on the

positive aspects of NSPS’ human resource systems and propose any suggested changes to 

these systems. 

Page 17 GAO-08-773 NSPS Implementation
DOD employees who would be covered by NSPS. These questionnaires 

asked employees to rate the importance of each work behavior statement 

defining a performance factor in terms of its importance for performing 

their jobs. Valid survey responses were received from approximately 14 

percent—or 71,000 employees. The responses from this survey were then 

used to refine the performance factors, all but one of which were, at the 

time of this review, functioning as the contributing factors and were used 

to augment employees’ ratings. These performance factors—or 

contributing factors—are: communication, cooperation and teamwork, 

critical thinking, customer focus, leadership, resource management, and 

technical proficiency.23 Employees on the supervisory/managerial pay 

schedule have an additional contributing factor—supervision. 

The employees and management officials we met with at the installations 

we visited generally were not involved in either the design or

implementation of NSPS at the DOD level; however, we generally found 

that employees served a contributory role in implementing NSPS at their 

respective installations and commands. For example, employees at 

several bases were involved in developing lessons learned following the 

end of each performance management cycle. Their input was sought 

through a variety of methods, including e-mail, group discussions, and 

surveys. During implementation of the system at the DOD level, we 

generally found that some employees were involved in assessments of the 

process after the performance cycle. For example, the PEO conducted 

focus groups with select employees across all of the components. In 

addition, PEO engaged management from across the components in 

lessons learned sessions. 

Link Employee Objectives 

to the Agency’s Strategic 

Goals and Mission 

DOD has made efforts to link employees’ objectives to the agency’s 

strategic goals, mission, and desired outcomes. The DOD-wide tool for 

employee self-assessments and appraisals—the Performance Appraisal 

Application (PAA)—provides a designated area for the employee’s 

command’s mission to be inserted as a guide while employees compose 

their job objectives and self-assessments. Many NSPS management 

officials, pay pool panel members, and supervisors we spoke with said that 

the incorporation of the overall goals in the PAA was a first step in 

facilitating employees’ ability to link their objectives to the agency’s goals 

 23With the change to objectives-based performance plans, DOD dropped the separate factor 

for “achieving results.” 

Page 18 GAO-08-773 NSPS Implementation
and missions. In addition, management officials at the sites we visited told 

us that they verbally communicated to employees how their specific roles 

facilitate the overall mission during group discussions or other venues. 

Management officials at some installations stated that they also

encouraged first-line supervisors to have conversations about this 

relationship with their employees. Furthermore, one installation we 

visited provided employees with a briefing slide that visually explained

how employees at that activity fit into the overall component’s mission 

and desired outcomes (see app. II). 

Training and Retraining in 

the System’s

Implementation and 

Operation 

DOD encouraged employees who were transitioning to NSPS to receive a 

10-hour training course that covered skills and behaviors necessary to 

implement and sustain NSPS, foster support and confidence in the system, 

and facilitate the transition to a performance-based, results-oriented 

culture. Program officials from all components told us that they required

employees who were transitioning to NSPS to take training on NSPS. 

Specifically, this included all employees among the military services, and 

at least 80 percent of employees among defense agencies and activities 

under the fourth estate. Further, we found that the 12 sites we visited 

provided DOD’s introductory training on NSPS to all employees, as well as 

an additional introductory course for supervisors. DOD also offered 

specialized training for functional areas covered by the NSPS regulations,

such as for supervisors/managers. These specialized training courses 

cover pay banding, staffing flexibilities, and performance management, 

among other topics. The core functional training includes 18 hours of 

basic training and 24 hours of pay pool panel training for managers and 

supervisors, 10 hours for employees, and 26 or more hours for human 

resource practitioners. Further, courses aimed at managers and 

supervisors focus heavily on the performance management aspect of 

NSPS, and address goal-setting, communicating with employees, and 

linking individual expectations to the goals and objectives of the 

organization. DOD also focused on change management training to 

address the behavioral aspects of moving to NSPS and to better prepare 

the workforce for the changes that will result from the new system’s 

implementation. Training on NSPS was provided via printed materials 

such as brochures or pamphlets, Web-based training, and classroom 

instructor-led training. 

In addition, some of the installations we visited supplied or had plans to 

incorporate supplemental training on subjects such as writing self 

assessments. Moreover, component program officials told us that the 

components have plans for sustainment training, which is largely the 

Page 19 GAO-08-773 NSPS Implementation
responsibility of the individual components. For example, the Army has 

incorporated NSPS training into its course for newly promoted

supervisors. The Navy is developing just-in-time vignettes and additional 

training on “soft skills,” such as feedback, which will be available for both 

supervisors and employees. Further, DOD had a number of online training 

options for employees and supervisors. 

DOD’s implementing issuances require supervisors to provide regular and 

timely performance feedback that is meaningful, constructive, and candid,

including at least one documented interim review and an annual 

performance appraisal during each performance appraisal period. At 10 of 

the sites we visited, supervisors told us that they communicated 

performance ratings and feedback to employees in person, as encouraged 

by DOD. Furthermore, DOD’s online system—PAA—allowed supervisors 

and employees to document interim, final, and any other formal feedback 

sessions. 

The structure of NSPS, as it was designed, is intended to allow linkage 

between individual pay and performance in an equitable manner. For 

example, NSPS has a multirating system that allows distinctions to be 

made in employee performance, and therefore compensation. For 

instance, within the five rating categories, employees may receive various 

numbers of shares according to their rating of record. Since the number 

of shares awarded determines the employee’s overall payout, awarding 

various numbers of shares permits further granularity—or distinctions—in 

linking employees’ performance and pay. Moreover, several of the pay

pool panel members we spoke with told us they used discretion in 

assigning higher ratings to ensure that the share value remained 

significant, and therefore facilitated greater pay increases for those 

employees awarded more shares—or higher ratings. 

Ongoing Performance 

Feedback and Dialogue 

between Supervisors and 

Employees 

System to Better Link 

Individual Pay to 

Performance in an 

Equitable Manner 

Page 20 GAO-08-773 NSPS Implementation
DOD has taken steps to ensure that agency resources are allocated for the 

system’s design, implementation, and administration, including steps to 

address—but not fully implement—resource allocation actions we 

previously recommended that could benefit the long-term implementation

of NSPS. As an example, NSPS law24 provides that, to the maximum extent 

practicable, for fiscal years 2004 through 2012 the aggregate amount of 

money allocated for civilian compensation for organizations under NSPS 

may not be less than the amount that would have been allocated under the 

General Schedule system.25 DOD has taken some actions to ensure that 

organizations under NSPS receive no less money for performance 

payments in the pay-banded NSPS than they would have for associated 

compensation and performance awards under the General Schedule 

system. For example, according to a PEO official, the department 

determined the percentage that components must use as their minimum, 

aggregated pay pool percentage for performance-based salary increases.26 

Means to Ensure that 

Adequate Agency 

Resources Are Allocated 

for System Design, 

Implementation, and 

Administration 

Further, the department has taken steps to address actions we have 

previously recommended. In July 2007, we found that DOD’s November 

2005 cost estimate of $158 million to implement NSPS between fiscal years 

2005 and 2008 did not include the full cost that DOD expected to incur as a 

result of implementing the new system.27 Further, we reported that the 

total amount of funds DOD had expended or obligated to design and 

implement NSPS during fiscal years 2005 through 2006 could not be 

determined because DOD had not established an oversight mechanism to 

ensure that these costs would be fully captured. As a result, we 

recommended that DOD define all costs needed to manage NSPS, prepare 

a revised estimate of those system implementation costs in accordance

with federal financial accounting standards, and develop a comprehensive 

oversight framework to ensure that all funds expended or obligated to 

design and implement NSPS would be fully captured and reported. DOD 

generally concurred with our recommendations. To address our 

recommendations, PEO reconvened the DOD-wide NSPS Financial 

 24 5 U.S.C. § 9902(e)(4). 

25Components must certify that pay pool funds are used only for the compensation of

civilian employees, as required by 5 U.S.C. § 9902(e)(6). 

26Percentages were determined using previous years data on General Schedule workforce

within grade and quality step increases, and promotions between grades banded in NSPS. 

27GAO, Human Capital: DOD Needs Better Internal Controls and Visibility over Costs for 

Implementing its National Security Personnel System, GAO-07-851 (Washington, D.C.: 

July 16, 2007). 

Page 21 GAO-08-773 NSPS Implementation
Integrated Product Team in 2007, which recommended, as we did, that the 

department expand the cost category definitions and clarify the treatment

of direct and indirect costs. PEO advised the components of these new 

definitions and the resulting requirements in September 2007. PEO also 

provided a revised estimate for implementation costs in the proposed 

NSPS regulations, published in the Federal Register on May 22, 2008.28 

Specifically, DOD estimated the overall costs associated with continuing 

to implement NSPS will be approximately $143 million from fiscal years 

2009 through 2011. 

To address our recommendation on oversight of reported costs, PEO 

reports that each component took actions. Specifically, the Army 

established new account processing codes for NSPS that comply with 

NSPS reporting categories and identified a central NSPS budget point of 

contact. Further, the Assistant Secretary of the Army (Financial 

Management and Comptroller) is providing an independent review to 

determine whether the Army major commands are meeting established 

internal procedures for tracking, capturing, and reporting NSPS 

implementation costs in specific categories. The Navy required all major 

commands to provide screen shots and/or proof that quarterly 

implementation costs are recorded in the appropriate accounting system. 

In addition, the Fourth Estate established unique identifiers for such cost 

transactions in its organization’s financial management and accounting 

systems, including the Defense Travel System. The Fourth Estate entities 

are required to verify cost data through trial balances and reconciliations 

with the Defense Finance Accounting Services’ reports and monthly billing 

reports and each of the entities’ comptrollers and/or resource management 

directorate reviews these latter reports. Lastly, at the time of our review, 

according to PEO, all Air Force NSPS activity was classified as

“sustainment” and those costs were accounted for within the service’s 

existing financial oversight framework, which includes its cost accounting 

systems. The Air Force has completed deploying NSPS and has no further 

implementation costs to report; however, future implementation costs may 

accrue, if additional employees are later converted to NSPS. 

 2873 Fed. Reg. 29,882 (May 22, 2008). The proposed regulations revise the NSPS regulations

published in November 2005 in response to significant changes made to the NSPS law by 

the National Defense Authorization Act for Fiscal Year 2008. 

Page 22 GAO-08-773 NSPS Implementation
DOD has taken some steps to ensure that predecisional internal 

safeguards are employed; however, the department is unable to determine, 

prior to the finalization of ratings, whether rating results under NSPS are 

consistent, equitable, and nondiscriminatory. Specifically, NSPS is 

designed with multiple layers of review before an employee’s appraisal is 

finalized. For example, a supervisor writes the employee’s performance 

assessment and recommends a rating which is then submitted for review 

to a higher level reviewer, who often serves as an interim level of review 

prior to the rating’s reaching the pay pool panel for its review. 

Additionally, at 10 of the 12 installations we visited, sub-pay pools had 

been established, often based on organizational structure to review a 

group of or all appraisals. The pay and sub-pay pool panels would either 

review all of the employee appraisals and self-assessments or they would 

review a sample of these documents. For example, the pay pool may 

review all appraisals assessed at the 1, 2, 4, and 5 ratings and randomly 

select a sample of the appraisals assessed at the 3 level. According to 

some pay pool panel members, panels reviewed employee appraisals 

separately, by job focus, such as engineers, to allow for a more consistent 

measure of employee performance. The panels also made efforts to 

determine the consistency among rating officials, which, according to the 

panel members, helps to eliminate bias, discrimination, or politicization. 

Predecisional Internal 

Safeguards to Determine if 

Rating Results Are 

Consistent, Equitable, and 

Nondiscriminatory 

Although these efforts are laudable, DOD is unable to determine whether 

rating results under the system are consistent, equitable, or 

nondiscriminatory prior to the ratings’ certification because it does not 

require any predecisional analysis of the ratings. In fact, only one quarter 

of the installations we visited analyzed the predecisional results of the 

rating distribution according to demographics, although doing so could 

expose possible trends, anomalies, or biases within the rating process. 

DOD does not require the components, or any levels within the 

department, to have a third party analyze the predecisional demographic 

results for trends or anomalies in the data. Furthermore, DOD does not 

provide the individual installations or commands with a means for 

assessing their rating distributions by demographics. Instead, DOD 

deliberately designed the computer application used by the pay pool 

panels to exclude demographic data. Therefore, any installation that 

performed demographic analysis, including those we visited, had to take

additional steps to gather and correlate the necessary data to perform the 

analysis. DOD officials told us they did not require any predecisional 

analysis of rating data and did not include demographic data in the 

computer application because they did not want to introduce the potential

for management to be influenced by bias or discrimination by adjusting 

the ratings so they could fit a certain predetermined or expected 

Page 23 GAO-08-773 NSPS Implementation
distribution by demographics. DOD officials were also concerned that 

employees might think that their ratings had been influenced by the 

demographic data for the same reasons. Furthermore, PEO officials stated

that the analysis of pay pools’ final rating results by demographics was 

sufficient to identify anomalies or trends associated with equity and 

nondiscrimination. However, the purpose of analyzing predecisional 

rating results is to identify any potential egregious decisions or investigate 

any potential problems, such as blatant discrimination, in a transparent 

manner before finalizing the ratings. The purpose of this predecisional 

analysis is not, however, to change the results to portray an “ideal” 

distribution, or to alter the outcome of the performance management 

process. Moreover, this type of analysis is not intended to change the 

rating results unless a mistake was identified. Identifying an anomaly in 

the data prior to finalizing the rating decisions would enable management 

to investigate the situation and determine whether the results accurately

reflect the employees’ performance or an outside factor is affecting the 

results. Furthermore, our prior work has highlighted other agencies that 

have implemented predecisional analysis as part of performance 

management systems.29 Until DOD conducts a predecisional analysis of 

the rating results to identify possible trends or anomalies, employees may

lack confidence in the fairness and credibility of the system. 

Reasonable Transparency 

of the System and Its 

Operation 

Although DOD has taken steps to ensure a reasonable amount of 

transparency during the implementation of NSPS, DOD’s performance 

management system does not provide employees with transparency over 

the final rating results. For example, DOD has taken actions to provide 

reasonable transparency by reporting periodically on internal assessments 

and employee survey results relating to performance management. 

Specifically, DOD has an “evaluation plan” that calls for it to conduct 

yearly employee focus groups following the close of the performance 

management cycle. The department distributed the results of its 2004 

focus groups concerning the design of NSPS and its performance 

management system to the union coalition representing DOD employees 

and according to officials it plans to brief employee representatives on the

results of its 2008 focus groups and other findings from its evaluation of

NSPS in spiral One. DOD’s assessment of NSPS also includes its 

 29GAO, Financial Regulators: Agencies Have Implemented Key Performance Management

Practices, but Opportunities Exist for Improvement, GAO-07-678 (Washington, D.C.: June

18, 2007). 

Page 24 GAO-08-773 NSPS Implementation
collaboration with the Defense Manpower and Data Center to sample and 

report on the NSPS workforce, and to include specific questions of 

interest for evaluating NSPS, in its now-yearly survey of DOD civilian

employees. The survey results are available on the Defense Manpower 

and Data Center’s Web site, and provided to key management officials in a 

briefing. Further, DOD’s NSPS office facilitates lessons-learned briefings 

with all four components at the conclusion of each cycle. 

Despite these efforts, DOD’s performance management system does not 

provide adequate transparency over its rating results to employees 

because it does not require commands or pay pools to publish their 

respective rating and share distributions to employees. Although DOD 

suggests that distributing aggregate data to employees is an effective 

means for providing transparency, the department does not require 

commands or pay pools to publish the rating distributions.30 Moreover, 

NSPS program officials at all four components told us that publishing 

overall results is considered a best practice. However, three of the 

installations we visited did not publish the overall rating and share 

distribution at any level for various reasons or, as officials at one 

installation told us, for no particular reason at all. Without transparency 

over rating and share distributions, employees may believe they are not 

being rated fairly, which ultimately can undermine their confidence in the 

system. 

Meaningful Distinctions in 

Individual Employee 

Performance 

The NSPS performance management system is designed to allow for 

meaningful distinctions to be made in employee performance. However, 

NSPS is not being implemented in a way that encourages use of all 

available rating categories, thus limiting the system’s ability to ensure that 

meaningful distinctions in employee performance, and therefore pay, are 

made. The performance management system for NSPS consists of five 

rating categories, of which the lowest rating is a “1” (unacceptable 

performance) and the highest rating is a “5” (role model performance). 

Further, the number of shares employees receive is commonly based on 

 30In response to comments on the original proposed NSPS regulations published in the 

Federal Register in 2005, PEO stated that it agrees with the concept of incorporating 

additional transparency in the performance management system, but not at the expense of 

employee confidentiality and privacy. Management offers alternatives to publishing 

individual ratings, to include publishing summary results and aggregate data such as 

average ratings and payouts within pay pools and job foci. 70 Fed. Reg. 66,116, 66,155 (Nov. 

1, 2005). 

Page 25 GAO-08-773 NSPS Implementation
the employees’ “raw performance scores,” and the shares ultimately 

determine employees’ overall payout.

 31 For example, at the installations 

we visited, the level “3” rating (valued performer) typically was awarded 

one or two shares depending on the employee’s raw performance scores. 

The overall number of shares awarded within a pay pool determines the 

value of the share. This means that the budget does not dictate the ratings 

because the value of a share depends on how many shares in total are 

being awarded. Regardless of the value of the share, an employee who 

receives a “3” rating with two shares would receive twice the payout 

percentage of an employee who received a “3” rating with one share within 

the same pay pool. 

Although DOD has established mechanisms within NSPS to allow for 

meaningful distinctions to be made, the guidance provided by the 

leadership at the PEO and component levels may discourage rating 

officials from using all available rating categories. Specifically, it was 

verbally expressed during training at multiple levels that the majority of 

employees should expect to be rated at the “3” level (or valued performer), 

according to PEO and component officials with whom we spoke. 

Furthermore, at 10 of the 12 installations we visited, rating officials, panel

members, program management, and/or employees told us they were 

instructed by management, through training, or informed via verbal 

guidance, to expect that most employees would be evaluated as valued

performers. The four components’ representatives noted that they 

received this guidance from PEO, along with the NSPS performance 

indicators and benchmarks, and disseminated it downward via verbal

guidance, often through training. Moreover, PEO officials confirmed that 

NSPS program management across the components was to communicate 

downward, through training, that the majority of employees were likely to 

be rated at the “3” level. In addition, one pay pool panel we visited 

specified in its business rules that most employees should expect to 

receive a “3” rating. As a result of this communication, there was a 

hesitancy to award employee ratings in other categories, across the sites 

visited. Some pay pool panel members and rating officials with whom we 

spoke noted that they were reluctant to award too many 4s and 5s. In 

addition, several rating officials told us that there is a hesitancy to assign 

lower ratings—specifically a “2” or “1”—due to the additional paperwork 

and justification required of the supervisor, and the potential for employee 

 31Employees are assessed on job objectives. Scores are given to each job objective, and the

average of these scores is the employee’s rounded rating, or rating of record. 

Page 26 GAO-08-773 NSPS Implementation
backlash. Moreover, during our group discussions with civilian 

employees, a prevalent theme was that it was impossible to receive a 

rating higher or lower than a “3.” As a result of the explicit guidance that

most employees should be rated as a “3” and the reaction of the pay pool 

panels, supervisors, and employees we met with, it is questionable 

whether meaningful distinctions are being made in NSPS employees’ 

performance ratings. 

The verbal guidance that was incorporated in training and town hall 

meetings with employees—i.e., that most employees should expect to be 

rated at the “3” level—was intended to prepare employees not to have high

expectations of what their ratings would be under NSPS, according to 

PEO officials. Further, officials within PEO and the components, as well 

as pay pool panel members and supervisors told us that the prior rating 

system was inflated and many employees were accustomed to receiving

the highest available rating. In other cases, employees were transitioning 

from a system that either rated the employee as passing or failing. As a 

result, PEO officials were concerned that the more stringent performance 

indicators under NSPS needed to be fully communicated to employees. 

Furthermore, PEO, and most of the installations we visited, emphasized 

that there was not a forced distribution of ratings. Specifically, PEO 

guidance prohibits forced rating distributions or quotas, and we have 

previously reported that making meaningful distinctions in employee 

performance, such as agencies not imposing a forced distribution of 

performance ratings—i.e., a fixed numeric or percentage limitations on 

any rating levels—is a key practice in effectively implementing 

performance management systems.32 Further, according to NSPS 

implementing issuance, rating results should be based on how well 

employees complete their job objectives using the performance indicators. 

We collected and analyzed the rating results from the pay pools we visited, 

as well as DOD-wide (see table 2). The pay pool rating distributions we 

reviewed from our 12 site visits revealed that 60 percent or more of 

employees were rated at the “3” level at 9 pay pools. However, we were 

unable to determine whether these final distributions were meaningful 

because we do not have specific knowledge of employees’ performance 

within these pay pools. For example, within one pay pool it is feasible that 

the vast majority of employees are performing at the “3” level based on the 

 32 GAO, Human Capital: Preliminary Observations on the Administration's Draft 

Proposed "Working for America Act, GAO-06-142T (Washington, D.C.: Oct. 5, 2005). 

Page 27 GAO-08-773 NSPS Implementation
performance indicators and employees’ performance. It is also possible 

that at a different pay pool a vast majority are performing at the “4” level.

Table 2: Percentage of Employees in Each Rating Category by DOD and Pay Pools Visited

Rating categories 

1 2 3 4 5

DOD 0.2% 1.6% 57.0% 36.1% 5.1%

Redstone Arsenal 0.3 1.0 66.0 31.0 2.0

Fort Huachuca 0 2.0 63.0 31.0 4.0

Fort Sam Houston 0 1.0 60.0 38.0 1.0

Tinker Air Force Base 0.1 4.0 68.0 26.0 2.0

Randolph Air Force Basea0 1.0 34.0 43.0 21.0

March Air Reserve Base 0 1.0 69.0 25.0 4.0

Joint Warfare Analysis Center 0.4 1.0 73.0 24.0 2.0

Naval Facilities Headquarters 0 1.0 50.0 40.0 9.0

Marine Corps Tactical Systems Support Activity 0 2.0 84.0 14.0 0

DOD, Office of Inspector General 0 2.0 53.0 38.0 6.0

Defense Microelectronics Activity 0 3.0 60.0 27.0 10.0

Defense Threat Reduction Agency 0.2 2.0 65.0 31.0 2.0

Source: GAO analysis of DOD data. 

Note: The percentages presented in this table may not total to 100 due to rounding. 

a

Officials we interviewed from one of the pay pools at Randolph Air Base told us that they were aware

that their pay pool rating distribution had more employees rated in category 4 and 5 than many other 

pay pools and the norm in DOD; however, they said they believed their ratings accurately reflected 

their employees’ performance. Furthermore, these officials told us that most of the employees who 

were under NSPS in their pay pool were supervisors and “high performing” employees. 

Unless NSPS is implemented in a manner that encourages meaningful 

distinctions in employee ratings in accordance with employees’ 

performance, employees will continue to believe they are not rated fairly 

and that there is an unspoken forced distribution of ratings, and their 

confidence in the system will continue to be undermined. 

Page 28 GAO-08-773 NSPS Implementation
While DOD employees under NSPS are positive regarding some aspects of 

NSPS’s performance management system, they generally expressed 

negative perceptions of the system in both DOD’s survey and the focus 

group sessions we held, and DOD does not have a plan to address these 

negative employee perceptions. Specifically, while DOD’s SOFS of civilian 

employees indicates that attitudes on certain aspects of performance 

management are more positive among employees who have transitioned to 

NSPS compared to all other DOD employees, the most recent survey 

results indicate that attitudes of employees who have been under NSPS 

the longest have become slightly more negative toward other aspects of 

performance management. Moreover, civilian employees, including 

supervisors, expressed concerns or negative attitudes about NSPS during 

the focus group discussions we held at 12 select installations. These 

attitudes are not surprising given that organizational transformations often 

require an adjustment period to gain employee acceptance and trust. 

However, DOD has not developed a specific action plan for addressing the 

critical issues raised by employees in both DOD’s survey results of 

employees and the PEO’s evaluation of NSPS through focus groups. 

DOD’s survey of civilian employees indicates that attitudes on certain 

aspects of performance management, such as pay raises depending on 

performance, are more positive among employees who have transitioned 

to NSPS compared to all other DOD employees. However, most recent 

survey results indicate that attitudes of employees who have been under 

NSPS the longest have become slightly more negative toward certain other 

aspects of performance management, such as the overall impact of NSPS

on personnel practices at DOD. During our analysis of DOD’s survey 

results for November and May 2006 and May 2007, we noted that employee 

responses to the questions we identified as related to NSPS and 

performance management were fairly evenly distributed across the 

“disagree,” “agree,” and “neither” responses. As a result, we do not know 

what the overall trend is or whether this movement in the negative 

direction will continue in future years. We will be able to identify trends in 

employee attitudes after employees have had more time under NSPS and 

additional surveys are administered. 

Although DOD 

Civilian Employees 

under NSPS Identified 

Some Positive 

Aspects of the 

System, DOD Does 

Not Have a Plan for 

Addressing the 

Generally Negative 

Employee 

Perceptions of NSPS

NSPS Employee Attitudes 

on Certain Aspects of 

Performance Management 

Are More Positive than All 

DOD Employees, but Have 

Slightly Declined among 

Those Employees Who 

Have Been under NSPS the 

Longest 

Page 29 GAO-08-773 NSPS Implementation
Our review of the results of the 2007 SOFS for DOD civilian employees 

found that employees under NSPS are slightly more positive than all other 

DOD employees about some aspects related to the goals of performance 

management. 33 Specifically, the Office of Personnel Management reported 

that the goals of performance management under NSPS are to link 

employee performance, pay, and mission accomplishment as well as to 

make meaningful distinctions in employee performance.34 For example, an 

estimated 56 percent of NSPS employees indicated that they believed that

bonus and cash awards are based on performance compared to 52 percent 

of all DOD employees.35 In addition, an estimated 40 percent of NSPS 

supervisors responded that they agreed they could influence their 

employee’s pay to reflect performance as compared to 27 percent of all

DOD supervisors. See table 3 for additional examples. Furthermore, we 

identified some instances in which spiral 1.1 employees, who were the first 

to transition into NSPS, showed even more positive attitudes toward 

performance management. For example, an estimated 25 percent of all 

DOD employees agreed that pay raises depend on how well employees 

perform their jobs, compared to 40 percent of all NSPS employees and 43 

percent of spiral 1.1 employees. See appendix III for additional survey 

questions and responses related to performance management and NSPS. 

Survey Results Indicate that 

Employees under NSPS Are 

More Positive than Other DOD 

Employees about Some 

Aspects of Performance 

Management 

 33DOD’s efforts to assess employee perceptions of NSPS have been captured within three

surveys. Since NSPS implementation began, the SOFS for civilian employees was 

conducted in May 2006, November 2006, and May 2007. Results from a fourth survey

conducted in 2008 were not available at the time of this report. 

34U.S. Office of Personnel Management, Working for America: An Assessment of the 

Implementation of the Department of Defense National Security Personnel System 

(Washington, D.C.: May 2007). 

35For the May 2007 survey, 102,000 civilians were surveyed and the weighted response rate

was 59 percent. Estimated percentages are reported for collapsed positive and negative 

responses. That is, agree includes those that responded both agree and strongly agree, and

disagree includes responses for both disagree and strongly disagree. The estimated 

percentages are reported with margins of error based on 95 percent confidence intervals. 

The margin of error is within +/- 2 percent. 

Page 30 GAO-08-773 NSPS Implementation
Table 3: Estimated Percentage of Responses from Status of Forces Survey for DOD Civilian Employees, May 2007

Question 

Employee 

description Agree Neither Disagree

Performance management 

Differences in performance are recognized in a meaningful way DOD 34% 32% 30%

NSPS 38 31 27

Bonus and cash awards are based on performance DOD 52 20 27

NSPS 61 19 20

In my work unit, steps are taken to deal with a poor performer who DOD 29 30 37

cannot or will not improve NSPS 34 31 30

Pay raises depend on how well employees perform their jobs DOD 25 28 43

NSPS 40 28 28

Personnel actions

I can influence my employees' pay to reflect performance DOD 27 31 43

NSPS 40 28 32

Leadership and management

Managers communicate their goals and priorities DOD 58 22 20

NSPS 63 19 17

Source: GAO analysis of DOD data. 

Note: The estimated percentages are based on a 95 percent confidence interval and the margin of 

error is within +/- 2 percent. The response categories are collapsed for positive (“agree”) and negative 

(“disagree”) responses. That is, “agree” is the estimated percentage of employees who responded 

either “agree” or “strongly agree”, while “disagree” is the estimated percentage of employees who 

responded either “disagree” or “strongly disagree.” 

In some instances, DOD’s survey results showed a decline in employee 

attitudes among employees who have been under NSPS the longest. 

Responses of spiral 1.1 employees, who were among the first employees 

converted to NSPS, were steadily more negative about NSPS from the May 

2006 to the May 2007 DOD survey. At the time of the May 2006 

administration of the SOFS for civilians, employees designated as spiral 

1.1 had received training on the system and had begun the conversion 

process, but had not yet gone through a rating cycle and payout under the 

new system. As part of this training, employees were exposed to the 

intent of the new system and the goals of performance management and 

NSPS, which include annual rewards for high performance and increased 

feedback on employee performance. However, as DOD and the 

components proceeded with implementation of the system, survey results 

showed a decrease in employees’ optimism about the system’s ability to 

fulfill its intent and reward employees for performance. The changes in 

attitude reflected in DOD’s employee survey are slight, but indicate a 

Survey Results in Some 

Instances Show a Slight 

Decline in Employee Attitudes 

among Those Employees Who 

Have Been under NSPS the 

Longest 

Page 31 GAO-08-773 NSPS Implementation
movement in employee perceptions. Most of the movement in responses 

was negative. Specifically, in response to a question about the impact 

NSPS will have on personnel practices at DOD, the number of positive 

responses decreased from an estimated 40 percent of spiral 1.1 employees 

in May 2006 to an estimated 23 percent in May 2007.36 Further, when asked 

how NSPS compared to previous personnel systems, an estimated 44 

percent said it was worse in November 2006, compared to an estimated 50

percent in May 2007.37 

Similarly, employee responses to questions about performance 

management in general were also more negative from May 2006 to May

2007, as shown in table 4. Specifically, the results of the May 2006 survey 

estimated that about 67 percent of spiral 1.1 employees agreed that the 

performance appraisal is a fair reflection of performance, compared to 52 

percent in May 2007. Further, the number of spiral 1.1 employees who 

agreed that the NSPS performance appraisal system improves 

organizational performance decreased from an estimated 35 percent to 23

percent. For additional questions and results related to NSPS and 

performance management, see appendix III. 

 36 Specifically, the SOFS of civilian employees asked employees to respond to the 

statement, “Overall, what type of impact do you think NSPS will have on personnel 

practices in the DOD.” In May 2006, responses were: 25 percent, negative; 35 percent, 

neither; and 40 percent, positive. In May 2007, responses were: 48 percent, negative; 30 

percent, neither; and 23 percent positive. 

37 Specifically, the SOFS of civilian employees asked employees to respond to the 

statement, “Compared to previous personnel systems, NSPS is worse, neither, or better.” 

The question was not asked in May 2006; however, in November 2006 the responses were: 

44 percent, worse; 41 percent, neither; and 15 percent, better. In May 2007, the responses 

were: 50 percent, worse; 35 percent, neither; and 15 percent, better. 

Page 32 GAO-08-773 NSPS Implementation
Table 4: Estimated Percentage of Spiral 1.1 Employees’ Responses for Select Questions from the May 2007, November 2006, 

and May 2006 Administrations of the Status of Forces Survey for DOD Civilian Employees

Question Survey administration Agree Neither Disagree

Performance management 

May 2006 67% 20% 12%

November 2006 59 22 16

Performance appraisal is fair reflection of performance 

May 2007 52 21 25

May 2006 68 20 12

November 2006 65 20 16

Performance standards/expectations take into account 

important parts of job 

May 2007 59 20 20

May 2006 35 39 26

November 2006 30 37 34

Performance appraisal system improves organizational 

performance 

May 2007 23 31 47

May 2006 43 33 25

November 2006 42 28 30

Current performance appraisal system motivates me to 

perform well

May 2007 38 26 36

NSPS 

May 2006 N/A N/A N/A

November 2006 38 36 38

NSPS has improved personnel process for communication 

between supervisors and employees 

May 2007 34 31 34

May 2006 N/A N/A N/A

November 2006 29 38 33

NSPS has improved personnel process for linking pay to 

performance 

May 2007 28 26 46

May 2006 N/A N/A N/A

November 2006 35 39 35

NSPS has improved personnel processes for individual 

performance supporting organizational mission 

May 2007 33 36 33

Source: GAO analysis of DOD data. 

Note: The estimated percentages are based on a 95 percent confidence interval with a margin of 

error for the May 2007 results within +/- 2 percent and within +/- 3 percent for the May 2006 and 

November 2006 results. The response categories are collapsed for positive (“agree”) and negative

(“disagree”) responses. That is “agree” is the estimated percentage of employees who responded 

either “agree” or “strongly agree,” while “disagree” is the estimated percentage of employees who 

responded either “disagree” or “strongly disagree.” In addition, some responses for the May 2006 

survey are “N/A” because those questions were not asked on that survey. 

DOD Employees in Our 

Discussion Groups 

Expressed Wide-Ranging 

but Consistent Concerns 

about NSPS 

In the discussion groups we held, DOD employees and supervisors 

expressed wide-ranging but consistent concerns about NSPS. While the 

results of our discussion groups are not generalizable to the entire 

population of DOD civilians, the themes that emerged from our 

discussions provide valuable insight into civilian employees’ perceptions 

about the implementation of NSPS and augment DOD’s survey findings. 

Page 33 GAO-08-773 NSPS Implementation
During these discussion groups, we found that some civilian employees 

were optimistic about the intent of the system and its potential benefits, 

for example, rewarding high performers and improving communication 

between supervisors and employees. Further, some employees we met 

with told us that they were satisfied with NSPS and had no complaints 

about the system. However, during all of our discussion groups, civilian 

employees, including supervisors, expressed concerns or negative

attitudes about NSPS. Prevalent themes or employee perceptions coming 

out of those discussion groups were that NSPS (1) had a negative impact 

on motivation and morale, (2) required employees and supervisors to 

spend excessive amounts of time navigating the performance management 

process, (3) was biased due to the potential influence that employees’ and 

supervisors’ writing skills have on panels’ assessments of employee 

ratings, (4) lacks transparency over the pay pool panel process, and (5) 

was implemented at a rapid pace. Employees also commented on other 

aspects of NSPS. (See app. IV for a discussion of less prevalent themes 

that emerged from our discussion groups.) Given that NSPS has just 

entered its third year of implementation, these negative attitudes are not 

surprising. As stated before, our previous work as well as the reports 

published by the Office of Personnel Management have shown that 

organizational transformations, such as the adoption of a new

performance management system, often entail fundamental and radical 

changes to an organization that requires an adjustment period to gain 

employee acceptance and trust.38 As a result, major change management 

initiatives in large-scale organizations can often take several years to be 

fully successful. 

A prevalent theme from our discussions with both employees and 

supervisors was that several aspects of NSPS have had a negative impact 

on employee motivation and morale. Specifically, employees and 

supervisors at 9 of the 12 sites we visited expressed concern that 

management had established an unpublished quota for rating distributions 

and that a majority of employees were arbitrarily placed in the “3” or 

“valued performer” category. As a result, some employees said they are 

not motivated to perform above the “3” level, because they think they will 

receive this rating regardless of their individual performance. In addition, 

employees suspected that both their ratings and their pay pool’s overall 

Negative Impact on Motivation 

and Morale 

 38GAO, Results Oriented Cultures: Implementation Steps to Assist Mergers and

Organizational Transformations, GAO-03-669 (Washington, D.C.: July 2, 2003); Office of

Personnel Management, Working for America: Alternative Personnel Systems in Practice

and a Guide to the Future (Washington, D.C.: October 2005). 

Page 34 GAO-08-773 NSPS Implementation
rating distribution were predetermined based on the pay pool’s available 

funding. While some employees said that giving too many “4” and “5” 

ratings would diminish share value, other employees expressed concern 

that management’s attempt to group everyone in the “3” category did not 

result in the recognition of different levels of performance. Another 

prevalent theme at 10 of the sites we visited was that a rating of “3” was 

perceived as being average, and not “valued,” despite what they were told

during training and in other information they received about the system. 

As a result, employees at 10 sites we visited stated that distinctions in 

different levels of performance were not being made, while others stated 

that, by not distinguishing between differing levels of employee 

performance, NSPS has the potential to discourage employees from going 

above and beyond in their performance over time. 

Furthermore, employees at 8 of the 12 sites we visited questioned the 

merit of a pay-for-performance system for civil service employees because, 

for many, money is not a motivator. Employees at 2 locations told us that 

they valued their reputation and recognition from their supervisor when 

they did a good job more than they did the monetary reward associated

with their rating. As a result, some employees did not agree with having 

their rating linked to the monetary award. Employees at a couple of sites 

stated that they would prefer a higher rating regardless of the payout. 

Employees at several locations told us that they did not trust that the 

system was in the employees’ best interest, but rather was an attempt by 

the government to “save money at the expense of the employees.” 

Moreover, some employees believed that they were not doing as well 

financially as their GS counterparts. During discussion groups we heard 

that employees were comparing pay increases they would have received 

under the GS system to those they received under NSPS. Discussion group 

participants also told us that DOD’s transition to NSPS has been further 

complicated by the fact that civilian employees were previously under a 

performance management system where ratings were inflated for an 

extended period of time. For example, a supervisor at one location we 

visited stated that employees at that location were used to the previous 

performance management system, under which a majority of the 

workforce received an inflated rating.

39 PEO heard similar concerns 

during a series of focus groups that it conducted in 2004. Specifically, 

 39General Schedule employees in DOD were under either a pass/fail or a five-level rating 

system prior to the implementation of NSPS. A pass/fail system assesses employees’ 

performance as either “passing” or “failing.” 

Page 35 GAO-08-773 NSPS Implementation
participating employees reported that rating inflation existed in the prior 

system, which resulted in the system’s inability to distinguish between 

high and low performers. 

A prevalent theme at all 12 locations we visited was that it was excessively 

time-consuming and/or labor intensive to navigate through all the steps of 

the performance management process of NSPS. While some participants 

recognized that a learning curve is to be expected with any new system, 

other participants told us that NSPS requires a much greater time 

commitment than previous performance management systems. 

Employees, including supervisors, also told us that, in some cases they 

found that the tasks and responsibilities associated with NSPS hindered 

their ability to focus on and complete their assigned job duties. 

Specifically, employees in both supervisory and nonsupervisory positions 

told us that the back and forth exchange of draft job objectives and selfassessments with their supervisor was particularly time consuming. 

Participants in some of our discussion groups also told us that they had to

devote excessive amounts of time to tracking and writing up their tasks 

over the course of the performance cycle. For example, we heard at 

multiple sites that employees kept a daily log, or record, of their tasks so 

that they would be able to write, in detail, what they did on their selfassessments. Moreover, both supervisors and employees expressed 

frustration that the entire process was too labor-intensive, with some 

saying that management had to delay their day-to-day work for extensive

periods of time to complete ratings and participate in the sub-pay pool and 

pay pool panel processes. Further, supervisors in our discussion groups 

told us that their administrative tasks under NSPS, specifically drafting 

ratings and maneuvering back and forth with the employee through the 

steps in the computer application, required so much of their time that they

could barely fulfill their other job responsibilities. During one discussion 

group, supervisors told us that it took a minimum of 4 uninterrupted hours 

per employee to complete a rating. Employees expressed a similar 

sentiment in regards to their supervisors. For example, during a discussion 

group with employees, we heard that one supervisor had to shut his door 

for an extended period of time in order to complete employee 

assessments. In addition, some employees told us that they did not see the 

added benefit of the system, given the amount of time and effort they had 

to invest in performing tasks such as drafting job objectives and selfassessments while navigating the performance appraisal process. 

Employees further noted that, despite the significant amount of time they 

invested to complete the process, they received a “3” or felt their payout 

was insufficient to justify the time investment. A couple of supervisors told 

Excessive Amount of Time 

Spent Navigating the 

Performance Management 

Process 

Page 36 GAO-08-773 NSPS Implementation
us that their subordinates have asked why they should put in the effort if 

they are going to get a “3.” 

Supervisors and employees at 11 of the 12 locations we visited voiced

concern that their writing skills, as evidenced in their job objectives, selfassessments, and ratings, influenced the panels’ evaluation of the ratings 

they received under NSPS and potentially overshadowed the 

accomplishments they achieved during the rating period. Specifically, 

during two discussion groups, employees in more technical positions felt 

that they were at a disadvantage when it came to writing objectives and 

self-assessments because their strengths lie in other areas or their jobs do 

not require them to regularly produce written products. Further, 

supervisors told us that they were concerned that their own writing skills 

were detrimental to employee ratings. For example, one supervisor told us 

that he bought a number of books on writing and performance appraisals 

to assist him with the process so that his employees would not be 

disadvantaged. 

Potential Influence that

Employees’ and Supervisors’ 

Writing Skills Have on Panels’ 

Assessments of Employee 

Ratings 

Some employees told us that they devoted a significant amount of time to 

their self-assessments, often using personal time to compose them. 

However, other employees told us that the quality of their assessment and 

their rating may have suffered because they were focused on their job 

responsibilities and did not invest a lot of time and effort in their 

assessment. For example, during one discussion group, employees said 

that since the end of the rating cycle coincides with the end of the fiscal 

year, they must choose between meeting fiscal year deadlines and 

completing their NSPS assessment tasks. Furthermore, some employees 

and supervisors were unclear as to (1) what information they should 

include in their self-assessments and/or employee ratings and (2) what 

format they should use, because they had not received any examples, 

feedback for improvement, or comments on the strengths of previous 

assessments. Participants also noted that it is difficult to explain to the pay

pool panel exactly what each employee’s job entails, regardless of the 

amount of explanation they are allowed. 

Employees and supervisors at 9 of the 12 sites we visited expressed 

concern that they lacked transparency over and an understanding of the 

pay pool panel process and the overall rating process. Some employees 

said that they did not trust the system because they think there is a lot of

secrecy in the pay pool panel process. For example, some employees we 

spoke with at 1 location indicated that they had limited understanding of 

the process from the moment their rating left their supervisors’ hands and

went up to the “pay pool in the sky.” Employees at almost all locations told

Employees Lack Transparency 

and Understanding of the Pay 

Pool Panel Process 

Page 37 GAO-08-773 NSPS Implementation
us that they did not feel as though the pay pool panel members knew them 

or the work they did. Specifically, at one location employees said that pay

pool panel members did not know them well enough to make a fair 

determination of their final rating. Furthermore, employees at 8 locations 

expressed concern that the visibility of their position or their assignment 

to the pay pool panel influenced the rating they received. A prevalent 

theme at a majority of the sites we held discussion groups at was that 

employees were concerned about the pay pool panel not having direct 

knowledge of them or their accomplishments. However, at a couple of the 

sites we visited, employees said that this was a benefit of the system. They 

stated that the additional level of review by the pay pool panel, and in 

some cases a sub–pay pool panel, removed some of the subjectivity from 

the process and allowed them to make management more aware of their 

accomplishments. 

Supervisors we spoke with also expressed concerns about their 

understanding of the pay pool panel’s decision on employee ratings and 

the communication they received from the panel. Some supervisors we 

spoke with were concerned about giving feedback, specifically praise, to 

their subordinates throughout the year or prior to releasing the final 

ratings because they were unsure if the pay pool panel would sustain the 

rating they assigned. Moreover, supervisors at some of our discussion 

groups expressed frustration regarding the pay pool panel’s lack of 

communication about their subordinates’ final ratings and its rationale for

its final ratings. In instances where changes were made to a rating, 

supervisors at half of the installations we visited told us that they were 

unsure how to give employees feedback on their final rating because they 

felt their employees had earned a different rating and the panel did not 

provide evidence to explain why it changed the rating. 

Another theme that emerged from our discussions with both supervisors 

and employees was that NSPS was implemented before all of the glitches 

with the system were identified and resolved. Employees described 

instances where they received incomplete information during training, as 

well as instances where the trainer could not provide answers to their 

questions. For example, one employee told us that he and others did not 

receive answers to the questions they submitted to the online question 

box. The employee told us that management at that location stated that

they were unable to answer some questions they received. Employees at 

another location described feeling as though they were turned loose to 

figure things out for themselves, because the trainers could not answer 

employee questions. One employee said that it felt as though the system 

“hit the street running.”

Rapid Pace of System 

Implementation 

Page 38 GAO-08-773 NSPS Implementation
Another theme that emerged from our discussion groups with both 

employees and supervisors was the haste with which the online tool—the

PAA—was rolled out, as well as the difficulties they continued to 

experience in using this tool, despite several different iterations of the 

program attempting to correct the problems. Employees and supervisors 

at several locations described the system as being fraught with problems. 

For example, they said the tool was nonintuitive and not user-friendly, or 

as one employee called it, “user hostile.” Specifically, during a couple of 

our discussion groups we heard that users were entering information into 

the system without knowing if they missed key steps or if their 

information would be lost before saving. In addition, during one of our 

discussion groups, employees who were trained to train other employees 

on NSPS told us that they found it particularly difficult to train employees

on the new online tool because of the new versions and updates that were 

released to correct problems with the system. The trainers told us that in 

some cases they were learning how to use the new versions at the same 

time as the employees they were supposed to be training. As a result, 

employees told us that they did not know whom to turn to for answers to 

their questions about the performance management system and online 

tool. 

DOD Has Not Developed a 

Plan for Addressing Issues 

Raised by Employees 

DOD has not developed a specific action plan to address critical issues 

raised by employees in forums such as DOD’s survey of employees and

other avenues, such as the PEO’s evaluation of NSPS through focus 

groups, according to PEO. As required by the National Defense 

Authorization Act for Fiscal Year 200440, OPM issued regulations requiring 

each agency to conduct an annual survey of its employees to assess 

leadership and management practices that contribute to agency 

performance and employee satisfaction with aspects of their organization.

According to OPM, survey information allows organizations to focus their

efforts and to improve various programs and processes. Further, OPM 

developed supplementary guidance recommending that agencies use 

survey results to provide feedback to employees and develop and 

implement an action plan. Specifically, it suggests that, after the survey 

results have been reviewed, agencies have a responsibility to provide 

feedback to their employees on the results, as well as to let employees 

know the intended actions to address the results and progress on these 

actions. The guidance further suggests, and we believe it is a best practice, 

 40Pub. L. No. 108-136, § 1128 (2003) and 5 C.F.R. Part 250, Subpart C. 

Page 39 GAO-08-773 NSPS Implementation
that agencies develop and implement an action plan to guide their efforts 

to address the results of the employee surveys. 

Through our own analysis of DOD’s survey and the discussion groups we 

held with employees and supervisors, we determined that employees 

under NSPS have generally negative perceptions regarding some aspects 

of NSPS. Further, PEO’s analysis of its most recent focus groups also 

showed that employees had concerns about NSPS.41 For example, PEO 

found that employees were concerned about the potential loss of their 

cost-of-living increase, the existence of adequate funding for pay increases 

and bonuses, and the lack of direct supervisory contact by their rater, 

among others.42 PEO issued its evaluation plan in 2007, the purpose of 

which is to describe the approach, types of data, and general time frames 

that PEO will use to evaluate and report on NSPS, including identifying 

aspects for modification and improvement. In addition, the evaluation plan 

specifies data sources, including employee attitude surveys, focus groups, 

and lessons learned. This evaluation plan is a first step toward successful 

implementation of NSPS. 

According to an official within PEO, the office has gathered information 

about employee perceptions since the onset of the system’s 

implementation and has used the information to make some adjustments 

to the system. However, the office has not developed a formal plan to 

address all employee issues. Further, an official within PEO stated that the 

office is hesitant to develop an action plan this early in the implementation

process because NSPS’s performance management process is relatively 

new and employees have not had a lot of time to become acclimated to the 

new processes and procedures. Further, theories of organizational 

transformation state that it takes years for large-scale organizational 

changes to be successfully integrated into the organization. Similarly, OPM 

studies on federal government demonstration projects for performance 

management show that employees’ attitudes were initially negative toward 

 41U.S. Department of Defense, NSPS Program Executive Office, National Security

Personnel System (NSPS) Focus Group Report (Washington, D.C.: February 2005). 

42According to PEO, many focus group participants incorrectly referred to the annual 

General Schedule (GS) pay adjustment as a cost of living increase, or COLA. The GS pay

adjustments are linked to changes in the Employment Cost Index (ECI), a measure of the 

overall rate of change in employers’ compensation costs in the private and public sectors, 

excluding the federal government. The ECI does not measure the cost of consumer goods

and services, and this adjustment is in no way tied to an inflation index. Rather, it is an 

attempt to keep federal pay in line with private sector pay. 

Page 40 GAO-08-773 NSPS Implementation
demonstration performance management systems; however, over time, 

these same employees developed more positive attitudes toward the 

systems. 43 Given this, it is reasonable for DOD to allow employees some 

time to accept the changes that NSPS brought about; however, it is also 

prudent for PEO to consider possible actions it could take to address 

persistent negative employee perceptions, particularly those perceptions 

that are not directly related to accepting a new system. For example, one 

prevalent theme from our discussion group was the potential for 

employees’ writing skills to influence the panels’ assessments of their 

performance. Without a plan to address employees’ negative perceptions 

of NSPS, DOD could miss opportunities to make changes that could lead 

to greater employee acceptance and, ultimately, successful 

implementation of NSPS’s performance management system. 

DOD’s implementation of a more performance- and results-based 

personnel system has positioned the agency at the forefront of a 

significant transition facing the federal government. NSPS is intended to 

move DOD from, in some cases, a pass or fail assessment of employees’ 

performance to a detailed assessment of employee performance that is 

linked to pay increases. We recognize that DOD faces many challenges in

implementing NSPS, as any organization would in implementing a largescale organizational change. However, the department has not fully 

addressed some key internal safeguards that could help it ensure the 

fairness and credibility of NSPS. Specifically, DOD cannot identify 

anomalies in predecisional rating results that might raise concerns about 

the equity of the system. Until DOD requires a third party to analyze the 

predecisional results of the ratings, it cannot be certain that NSPS 

performance management system is achieving consistency, equity, and 

nondiscrimination in the determination and assignment of employee 

ratings before those ratings are finalized. In addition, failure to provide all 

employees with key performance feedback on how their final rating and 

share value compares to those of other employees could lead to employee

distrust of the process and overall system. Finally, DOD’s NSPS guidance 

has discouraged the system from making meaningful distinctions in 

employee performance. Unless DOD encourages pay pools to make 

meaningful distinctions in employee performance to the fullest extent 

possible, as warranted by employees’ performance as compared to the 

Conclusions 

 43U.S. Office of Personnel Management, Working for America: Alternative Personnel 

Systems in Practice and a Guide to the Future (Washington, D.C.: October 2005). 

Page 41 GAO-08-773 NSPS Implementation
standards, employees will continue to feel devalued, which may result in 

further deterioration of morale and motivation. 

Furthermore, prevalent themes from our discussion groups, such as the 

perception of the pay pool process as secretive and the belief that 

employees will be rated a “3” no matter how well or poorly they perform, 

suggest that employees lack confidence in NSPS. Taken together, the 

absence of these safeguards and the negative, and declining, employee 

perceptions of NSPS are cause for concern about the success of the 

performance management system. NSPS is a new program and 

organizational change requires time for employees to accept the system. 

That said, DOD civilian employees will continue to question the fairness of 

their ratings and will lack confidence in the system until DOD develops an

action plan and takes specific steps to mitigate negative employee 

perceptions of NSPS. 

To better address the internal safeguards and improve employee trust in 

the NSPS performance management system, we recommend that the 

Secretary of Defense direct the National Security Personnel System Senior 

Executive to take the following four actions: 

Recommendations for 

Executive Action 

• Require a third party to perform predecisional demographic and other 

analysis as appropriate for pay pools.

• Require commands to publish the final overall rating results. 

• Provide guidance to pay pools and supervisors that encourages them to 

rate employees appropriately, including using all categories of ratings 

as warranted by comparing employees’ individual performance against 

the standards. 

• Develop and implement a specific action plan to address employee 

perceptions of NSPS ascertained from feedback avenues such as, but 

not limited to, DOD’s survey and DOD’s and GAO’s employee focus 

groups. For example, the plan should include actions to mitigate 

employee concerns about the potential influence that employees’ and 

supervisors’ writing skills have on the panels’ assessment of employee 

ratings and the lack transparency and understanding of the pay pool 

panel process. 

Page 42 GAO-08-773 NSPS Implementation
In written comments on a draft of this report, DOD concurred or partially 

concurred with three of our four recommendations to better address the 

internal safeguards and improve employee trust in the NSPS performance 

management system. DOD did not concur with our recommendation to 

require a third party to perform predecisional demographic and other 

analysis as appropriate for pay pools. DOD also provided technical 

comments, which we have incorporated in the report as appropriate. 

DOD’s official comments are reprinted in appendix V. 

Agency Comments 

and Our Evaluation 

DOD concurred with our recommendation to require commands to publish 

the final overall rating results. DOD noted that a vast majority of 

organizations under NSPS are publishing the overall final rating results, 

and stated that it will take steps to require all organizations under NSPS to 

share overall rating results with their employees. 

DOD partially concurred with our recommendation to provide guidance to 

pay pools and supervisors that encourages them to rate employees 

appropriately, including using all categories of ratings as warranted by 

comparing employees’ individual performance against the standards. DOD 

noted that ratings under NSPS rest firmly on the foundation of the written 

assessments and that the transition to NSPS requires leaders to 

demonstrate a firm commitment to rigorous, fact-based rating, as well as 

training and other efforts to “recalibrate” DOD’s workforce expectations 

from previous performance management systems in which nearly all 

employees got the highest available rating. We agree that NSPS was 

designed to assess employee performance using written assessments 

compared to performance indicators. Further, we acknowledged in the 

report that PEO and the components’ training and guidance on ratings 

were part of the transition process aimed at the majority of the employees 

who were, in the past, rated as “pass” or at the highest available rating. 

DOD, however, noted that it did not agree with our conclusion that it is 

questionable whether meaningful distinctions are being made in NSPS 

employees’ performance ratings, stating that our report relied heavily on 

workforce opinions gleaned from focus group discussions. Our 

conclusion, on the contrary, was based on our analysis of discussion with

management (including performance review authorities, pay pool 

managers, pay pool panel members, rating officials, and NSPS program 

managers or transition managers) at the 12 sites we visited, as well as 

during interviews with officials at the PEO and component headquarters.

Our analysis of these officials’ interpretation of the guidance among pay 

pool panels and rating officials consistently indicated that there was 

hesitancy to rate employees above or below a “3.” DOD further 

commented that it does “not accept the assumption” underlying our 

conclusion that pay pools and rating officials were not rating employees 

Page 43 GAO-08-773 NSPS Implementation
appropriately. We never assumed that pay pools and rating officials did 

not rate employees appropriately. Instead, as we stated in the draft, we 

were unable to determine whether the final distributions were meaningful

because we do not have specific knowledge of employees’ performance. 

DOD also noted that an employee has recourse, through the 

reconsideration process, if the employee believes a rating was “unfair” or 

did not result from meaningful distinctions. While we believe a 

reconsideration process is an important part of a performance 

management process, we do not necessarily think that the number of 

employees who filed reconsiderations or the outcomes of the 

reconsiderations are alone appropriate to determine whether employees 

believe their ratings are unfair or that meaningful distinctions were made. 

In fact, during our discussion groups at four locations, we heard that 

employees did not always choose to use the reconsideration process 

because they feared retribution from management and their supervisors. 

Lastly, DOD noted that suggesting that all rating levels be used, despite the 

caveat that they be “warranted,” could be interpreted as mandating rating

distributions based on other factors. Our recommendation, however, 

states that PEO should provide guidance to pay pools and supervisors that 

encourages them to rate employees appropriately, including using all 

categories as warranted by comparing employees’ performance against the 

standards. The essence of our recommendation reinforces that 

performance evaluations must be based on the employee’s actual 

performance measured against the standard criteria, rather than on a 

preconceived notion of a normal rating distribution, as DOD noted. By 

providing such reinforcement, we believe DOD will better implement 

meaningful distinctions in employees' performance and improve employee 

trust in the system. 

DOD partially concurred with our recommendation to develop and 

implement a specific action plan to address employee perceptions. In its 

written response, DOD stated that the department will address areas of 

weakness identified in its evaluation of NSPS. It further commented that it 

is premature to draw actionable conclusions from its recent survey, and it 

is, therefore, institutionalizing a continuous improvement strategy to give 

employees time to adjust to and accept the new performance management 

system. While we recognize that employees often require an adjustment 

period following any large-scale organizational transformation and 

acknowledged the department’s efforts to correct issues with the system, 

such as with the automated performance appraisal tools, we believe that 

DOD’s survey data, though preliminary, provide valuable insight into 

employee perceptions about NSPS. We, as well as the Office of Personnel 

Management, note that it is a best practice for agencies to use employee 

survey data by developing and implementing an action plan to guide its 

Page 44 GAO-08-773 NSPS Implementation
efforts to address the results of such surveys. Accordingly, we continue to 

believe that the development of a plan to address employees’ negative 

perceptions of NSPS could lead to greater employee acceptance and,

ultimately, could better enable successful implementation of the NSPS 

performance management system. 

DOD did not concur with our recommendation to require a third party to 

perform an independent, predecisional demographic and other analysis as 

appropriate for pay pools. In DOD’s written response, it stated that 

predecisional demographic and other analysis was not a “prescribed” 

safeguard. We agree that neither the National Defense Authorization Act 

for Fiscal Year 2008 nor the original statutory authority for NSPS 

prescribed predecisional analysis. However, the National Defense 

Authorization Act for Fiscal Year 2008 did direct GAO to (1) review the 

extent to which DOD had effectively implemented prescribed 

“accountability mechanisms” to include “adherence to merit principles” 

and “effective safeguards to ensure that the management of the system is 

fair and equitable and based on employee performance” and (2) assess 

other “internal safeguards.” 44 As part of our mandate to review the 

adherence of NSPS to merit system principles and internal safeguards, we 

examined whether DOD was performing predecisional analysis because it 

was identified in our prior work as a practice used by leading public sector

organizations. Further, we have emphasized the need for predecisional 

analysis as part of performance management systems’ internal safeguards 

since DOD first proposed NSPS.45 However, we revised the report to clarify

that predecisional analysis was not specified in the act. We continue to 

believe that our recommendation has merit and that independent, thirdparty predecisional analyses of rating results are a key internal safeguard 

for performance management systems in the federal government that can 

help agencies ensure that their systems adhere to merit system principles 

and are fair, equitable, and based on employee performance. In its 

 44 See National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 

1106(c)(1)(B) (2008) and 5 U.S.C. § 9902(b)(7)(A) and (G). 

45 For example, see GAO, Posthearing Questions Related to Strategic Human Capital 

Management, GAO-03-779R (Washington, D.C.: May 22, 2003); Defense Transformation: 

DOD’s Proposed Civilian Personnel System and Governmentwide Human Capital 

Reform, GAO-03-741T (Washington, D.C.: May 1, 2003); Human Capital: Agencies Need 

Leadership and the Supporting Infrastructure to Take Advantage of New Flexibilities, 

GAO-05-616T (Washington, D.C.: April 21, 2005); and Post-Hearing Questions for the 

Record Related to the Department of Defense’s National Security Personnel System 

(NSPS), GAO-06-582R (Washington, D.C.: Mar. 24, 2006). 

Page 45 GAO-08-773 NSPS Implementation
comments regarding the predecisional issue, DOD noted that its pay pool 

panel process provides checks and balances for fair and equitable ratings. 

We commended DOD’s efforts in our report, noting that the various levels 

of reviews incorporated into the department’s process were steps toward 

ensuring that predecisional internal safeguards are employed; however, 

we believe that such reviews are not sufficient to safeguard fair and 

equitable rating results because DOD is unable to determine whether 

rating results under the system are consistent, equitable, or 

nondiscriminatory prior to the ratings’ certification. Furthermore, DOD’s 

process does not include a review of all rating results to identify any 

anomalies. In fact, not all pay pool panels conduct 100 percent reviews of 

employee appraisals and assessments. As we noted in our report, some 

panels may review a sample of employees’ appraisals and assessments. 

Moreover, we found that one quarter of the pay pools we visited analyzed 

the predecisional results of the rating distribution according to 

demographics. As a result, DOD is inconsistently taking steps to 

implement this safeguard. DOD further commented that the rating 

reconsideration process and the Equal Employment Opportunity 

complaint process serve as another means for ensuring fairness in ratings. 

While we believe the reconsideration and complaint processes are an 

important part of the system, they do not take the place of predecisional 

reviews to identify potential anomalies or significant variances before 

ratings are finalized. DOD also stated that while demographic and other 

analyses can be used to ensure the process is fair and equitable, such 

analyses should be done after the ratings are finalized—noting that 

predecisional analysis may have detrimental effects on the credibility of 

the system. We agree with DOD that analyses done after the ratings are 

finalized are important and that any predecisional analyses should not be 

used to manipulate the results to achieve some type of parity among 

various groups of employees. However, we continue to believe that 

identifying an anomaly in the ratings prior to finalizing those ratings would 

allow management to investigate the situation and determine whether any

non-merit-based factors contributed to the rating results. We disagree with 

DOD that a predecisional analysis could have detrimental effects on the 

credibility of the system. As we noted in the report, the purpose of this 

predecisional analysis is not intended to change the results to portray an

“ideal” distribution, to alter the outcome of the performance management 

process, or to change the rating results unless a mistake was identified. 

Instead, we stated that the predecisional analysis could enable 

management to identify any potential egregious decisions or investigate 

any potential problems, such as blatant discrimination, in a transparent 

manner before finalizing the ratings. 

Page 46 GAO-08-773 NSPS Implementation
We are sending copies of this report to the appropriate congressional 

committees. We will make copies available to others upon request. This 

report will be available at no charge on GAO’s Web site at 

http://www.gao.gov. 

If you or your staff have any questions about this report, please contact me 

at (202)512-3604 or by e-mail at farrellb@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to the 

report are listed in appendix VI. 

Brenda S. Farrell 

Director, Defense Capabilities and Management 

Page 47 GAO-08-773 NSPS Implementation
List of Congressional Committees

The Honorable Carl Levin 

Chairman 

The Honorable John McCain 

Ranking Member 

Committee on Armed Services 

United States Senate 

The Honorable Joseph I. Leiberman 

Chairman 

The Honorable Susan M. Collins 

Ranking Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

The Honorable Ike Skelton 

Chairman 

The Honorable Duncan Hunter 

Ranking Member 

Committee on Armed Services 

House of Representatives 

The Honorable Henry A. Waxman 

Chairman 

The Honorable Tom Davis 

Ranking Member 

Committee on Oversight and Government Reform 

House of Representatives 

Page 48 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

Page 49 GAO-08-773

Appendix I: Scope and Methodology 

In conducting this review, we limited our scope to the performance 

management aspect of the National Security Personnel System (NSPS). 

Therefore, we addressed neither performance management of the Senior 

Executive Service at the Department of Defense (DOD) nor other aspects 

of NSPS, such as classification and pay. 

Determination of 

Implementation of Internal 

Safeguards and 

Accountability 

Mechanisms 

To determine the extent to which DOD has implemented safeguards to 

ensure that NSPS’s performance management system is fair, effective, and 

credible, we used the following internal safeguards and accountability 

mechanisms, which were either specified in the National Defense 

Authorization Act for Fiscal Year 2008 or identified in our previous work 

on pay for performance management systems in the federal government:1

 

• Involve employees, their representatives, and other stakeholders in the 

design of the system, to include employees directly involved in 

validating any related implementation of the system. 

• Assure that the agency’s performance management systems link 

employee objectives to the agency’s strategic plan, related goals, and 

desired outcomes. 

• Provide adequate training and retraining for supervisors, managers, and

employees in the implementation and operation of the performance 

management system. 

• Provide a process for ensuring ongoing performance feedback and 

dialogue between supervisors, managers, and employees throughout 

the appraisal period, and for setting timetables for review. 

• Implement a pay-for-performance evaluation system to better link 

individual pay to performance, and provide an equitable method for 

appraising and compensating employees. 

 1

The National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 

1106(c)(1)(B) (2008), directs GAO to evaluate the extent to which the Department of

Defense has effectively implemented accountability mechanisms, including those 

established in 5 U.S.C. § 9902(b)(7) and other internal safeguards. We identified some of

these safeguards in GAO, Post-Hearing Questions for the Record Related to the 

Department of Defense’s National Security Personnel System (NSPS), GAO-06-582R 

(Washington, D.C.: Mar. 24, 2006). Moreover, GAO has emphasized the need for internal

safeguards since DOD first proposed NSPS (for example, see GAO-03-779R.) 

NSPS Implementation
Appendix I: Scope and Methodology 

• Assure that certain predecisional internal safeguards exist to help 

achieve the consistency, equity, nondiscrimination, and 

nonpoliticization of the performance management process; such 

safeguards include an independent reasonableness review by a third 

party or reviews of performance rating decisions, pay determinations, 

and promotions before they are finalized to ensure that they are meritbased, as well as consideration by pay panels of the results of the 

performance appraisal process and other information in connection 

with final pay decisions. 

• Assure that there are reasonable transparency and appropriate

accountability mechanisms in connection with the results of the 

performance management process, to include reporting periodically on 

internal assessments and employee survey results relating to 

performance management and individual pay decisions while 

protecting individual confidentiality.

• Assure that performance management results in meaningful 

distinctions in individual employee performance. 

• Provide a means for ensuring that adequate agency resources are 

allocated for the design, implementation, and administration of the 

performance management system. 

To assess the implementation of these safeguards and accountability 

mechanisms, we analyzed regulations and other guidance provided by

officials in DOD and the four components’ headquarters—the Army, Navy, 

Air Force, and Fourth Estate.2

 We also reviewed documents, such as pay 

pool business rules, and regulations and training instructions obtained 

during 12 site visits and meetings with component-level program offices. 

Within DOD, we interviewed the Under Secretary of Defense for Personnel 

and Readiness, Arlington, Virginia as well as officials at: 

• the Program Executive Office (PEO), Arlington, Virginia; 

• Equal Employment Opportunity Office, Arlington, Virginia; 

 2

 The Fourth Estate includes all organizational entities in DOD that are not in the military 

departments or the combatant commands, for example, the Office of the Secretary of 

Defense, the Joint Staff, the Office of the DOD Inspector General, the defense agencies, and 

DOD field activities. 

Page 50 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

• Department of the Army, NSPS Program Management Office, 

Alexandria, Virginia; 

• Department of the Navy NSPS Program Office, Washington, D.C.; 

• Marine Corps NSPS Program Management Office, Quantico, Virginia; 

• Department of the Air Force, NSPS Program Office, Arlington, Virginia; 

• Department of the Air Force, Air Force Personnel Center, Randolph Air 

Force Base, Texas; and 

• Fourth Estate NSPS Program Management Office, Arlington, Virginia. 

We also interviewed appropriate officials across all four components, at 12 

installations total. To allow for appropriate representation by each 

component, we visited 3 installations per component and selected the sites 

because they (1) contained a large number of civilian employees under 

NSPS and (2) were geographically dispersed throughout the United States. 

Specifically, we visited the following 12 installations: 

• Redstone Arsenal, Alabama; 

• Fort Sam Houston, Texas; 

• Fort Huachuca, Arizona; 

• Joint Warfare Analysis Center, Virginia; 

• Naval Facilities Headquarters, D.C.; 

• Marine Corps Tactical Systems Support Activity, California; 

• Randolph Air Base, Texas; 

• Tinker Air Base, Oklahoma; 

• March Air Reserve Base, California; 

• Defense Microelectronics Activity, California; 

• Defense Threat Reduction Agency, Virginia; and 

Page 51 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

• Department of Defense Inspector General, Virginia. 

At the installations we visited, we interviewed the Performance Review 

Authority,3

 the pay pool manager, pay pool panel members, rating officials, 

and the NSPS program officer or transition manager. We compared and 

contrasted information extracted from the interviews regarding the 

implementation of the safeguards. We supplemented this testimonial 

evidence with policies and procedures, lessons learned, and other 

documents we obtained. We then identified how and at which 

installations each of the safeguards had been implemented. We also 

obtained and analyzed the rating and share distributions for each of the 12 

installations visited and compared the distributions to those of the 

components and DOD-wide. 

Further, we analyzed documents on NSPS and performance management 

published by the Office of Personnel Management, Washington, D.C., and 

interviewed appropriate officials at this agency. We also analyzed reports 

on performance management and NSPS published by the U.S. Merit 

Systems Protection Board, the Congressional Research Service, and GAO. 

Finally, we interviewed a representative from the American Federation of 

Government Employees as well as the coalition of DOD unions and 

analyzed relevant legal documents, such as the outcome of NSPS lawsuits. 

Determination of Civilian 

Personnel’s Perceptions of 

NSPS 

To determine how DOD civilian employees perceive NSPS, we analyzed 

two sources of employee perceptions or attitudes. First, we analyzed the 

results of DOD’s survey of civilian employees. Second, we conducted 

small group discussions with DOD civilian employees who had converted

to NSPS and administered a short questionnaire to discussion group 

participants to collect information on their background, tenure with the 

federal service and DOD, and attitudes toward NSPS. 

We analyzed employee responses to DOD’s SOFS of civilian employees—

including the May 2006, November 2006, and May 2007 administrations—

to gauge employee attitudes toward NSPS and performance management 

in general and to identify early indications of movement in employee 

perceptions. The Defense Manpower Data Center (DMDC) within DOD has 

conducted large-scale, departmentwide surveys of active military 

Analysis of DOD Survey 

Results 

 3

We were unable to schedule a meeting with the Performance Review Authority official for 

Redstone Arsenal, Alabama.

Page 52 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

personnel since 2002, called the Status of Forces Active Duty Survey. 

DMDC has also conducted surveys of reserve military personnel for DOD 

(Status of Forces Reserve survey). GAO has reviewed the survey results 

from prior active and reserve military personnel surveys and found the 

survey results sufficiently reliable to use for several GAO engagements.4

 

DMDC has conducted DOD-wide surveys of civilian employees since 

October 2003. The SOFS for civilian employees was created to measure 

the attitudes and opinions of these employees. The survey was developed

to satisfy the requirement

5

 to assess, among other things, employee 

satisfaction with leadership policies and practices; work environment; and 

rewards and recognition for professional accomplishment and personal 

contributions to achieving organizational mission. According to DOD, the 

May 2006 SOFS for civilian employees was the first to capture the attitudes 

of civilian employees under NSPS. The May 2007 survey was administered 

from May 7 to June 15, 2007, to more than 102,000 DOD civilian 

employees.6

 

To review whether DOD’s surveys of civilians were appropriately designed

and statistically valid, a team made up of GAO social science analysts with 

survey research expertise and GAO’s Chief Statistician (1) reviewed 

relevant documentation provided by DMDC regarding the survey methods

used in their surveys of DOD civilians, (2) interviewed DMDC officials who 

had knowledge of or were involved in the development and administration

of the DMDC surveys of civilians, and (3) reviewed the results for selected 

NSPS questions from the May and November 2006 and May 2007 surveys 

of DOD civilians. We determined that the survey results are sufficiently 

Review of Statistical Validity of 

DOD’s Survey of Civilians 

 4

GAO, Military Personnel: The DOD and Coast Guard Academies Have Taken Steps to

Address Incidents of Sexual Harassment and Assault, but Greater Federal Oversight Is

Needed, GAO-08-296 (Washington, D.C.: Jan. 17, 2008); Military Personnel: Federal 

Management of Servicemember Employment Rights Can Be Further Improved, 

GAO-06-60 (Washington, D.C.: Oct. 19, 2005); and Military Personnel: DOD Needs to 

Improve the Transparency and Reassess the Reasonableness, Appropriateness, 

Affordability, and Sustainability of Its Military Compensation System, GAO-05-798 

(Washington, D.C.: July 19, 2005). 

5

National Defense Authorization Act for Fiscal Year 2004, Pub. L. No. 108-136, § 1128 (2003) 

and 5 C.F.R. Part 250, Subpart C. 

6

In 2007, Human Resources Strategic Assessment Program decreased the number of 

respondents surveyed in the Status of Forces Survey of DOD Civilian Employees from 

approximately 150,000 to approximately 100,000 per year. This was accomplished by

covering about the same content in a single survey administration that was previously 

covered by two surveys each year. 

Page 53 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

reliable for the purposes of this report; however we identified areas for 

improvement. 

Based on the documentation of the DMDC’s surveys of DOD civilians, we

concluded that they were generally conducted in accordance with 

standard research practices. The civilian survey sample design, which 

determined which DOD civilians were selected for the survey, was 

reasonable and allowed for making appropriate comparisons between 

groups of civilians who are in the NSPS system and the rest of DOD 

civilians. It also distinguished between groups of NSPS employees who 

entered into the new performance system at different times (spirals 1.1, 

1.2, 1.3), allowing for appropriate statistical comparisons between groups 

over time. The development of the full list of DOD civilians from which to 

sample, or the population sampling frame, was reasonable, and does not 

appear to suffer from any significant under- or overcoverage of the target

population. The design of the sample and the related survey respondent 

selection methods were appropriate to develop statistically valid survey 

estimates.7

 Based on the reported percentage of the sample of DOD 

civilians who were located (96.67 percent), it appears that respondent 

contact information for the sample was adequate, allowing the survey to 

reach respondents at a high rate. 

Generally, DOD civilian questionnaires were appropriately designed. The 

questions that are specifically related to the NSPS are developed through a 

process whereby PEO officials review and suggest questions to DMDC 

survey officials. PEO develops new questions and alternative wordings for 

existing questions based on NSPS employee input through focus groups as 

well as PEO officials’ observations about the program. DMDC’s survey 

researchers then work with questions provided by PEO staff to revise 

them as necessary for balance and clarity. The survey was implemented 

via the Web and response follow-up activities made it possible for them to 

reach response rates comparable to other governmentwide surveys. 

Weighted response rates for the SOFS for civilian employees were: 59 

percent in May 2006, 55 percent in November 2006, and 59 percent in May 

2007. Similarly, the 2006 Federal Human Capital Survey, a large, stratified

random sample survey of civilian government employees conducted every 

2 years, achieved a response rate of 57 percent. To address nonresponse, 

the survey estimates incorporated appropriate statistical weighting 

techniques. 

 7

GAO did not monitor or audit the implementation of any of the DMDC survey processes.

Page 54 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

Although the NSPS question items were developed using input from NSPS

program officials and employees in the new system, the wording of 

questions was not pretested using cognitive interviewing techniques to 

assess clarity and comprehension and to minimize the risk of differing 

interpretations by those completing the questionnaires. Cognitive testing 

of survey items is a good practice used by survey researchers. We 

understand that survey researchers need to balance revising questions for 

validity and data quality with the need for survey questions that can be

compared over time. Nonetheless, some of the question-stem wording and 

response categories could be improved. For instance, some questions’ 

stems are worded positively and then respondents are asked to respond to 

an “agree/disagree” scale. For example, one question is worded, “To what 

extent do you agree or disagree with the following statements? The 

performance appraisal system I am under improves organizational 

performance,” and the response options are: “Strongly agree, Agree, 

Neither agree nor disagree, Disagree, Strongly disagree.” This question is 

worded positively and the scale of responses includes both positive and 

negative responses. It is difficult to interpret a response of “Disagree” or 

“Strongly disagree.” A respondent selecting one of these options disagrees 

with the statement presented, but we cannot determine whether they 

believe that the system has no influence on organizational performance or 

whether they believe that organizational performance is worse because of

the system. 

In addition, DMDC has not had a group of external experts review 

established survey practices for suggestions and recommendations, which 

is a best practice in survey research. Expert review for other large-scale 

federal surveys sometimes takes the form of advisory oversight boards, 

some of whose members have methodological expertise that allows them 

to make suggestions about the survey processes and particular projects. 

Lastly, DMDC does not perform nonresponse analysis to clarify whether 

those who did not respond to the survey may provide substantively 

different answers than those who did respond. The level of nonresponse 

warrants using at least some of the methods available for assessing 

whether nonresponse bias might under- or overrepresent some respondent

views on survey questions. For instance, it is conceivable that employees’

ratings might influence whether or not they are likely to reply to this 

survey, making it possible that some views are not reflected in the survey 

estimates for some questions, particularly for NSPS questions. The survey

results could be interpreted more confidently if nonresponse analysis was 

done to establish whether or not it is likely that there are any systematic 

Page 55 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

biases due to some civilians being more or less likely to respond to the 

survey. 

We conducted 3 discussion groups with civilian employees at each of the 

12 sites we visited, for a total of 36 discussion groups. Our overall 

objective in using the discussion group approach was to obtain employees’ 

perceptions about NSPS and its implementation thus far. Discussion 

groups, which are similar in nature and intent to focus groups, involve 

structured small group discussions that are designed to obtain in-depth 

information about specific issues. The information obtained is such that it

cannot easily be obtained from a set of individual interviews. From each 

location, we obtained lists of employees and information on their length of

employment and supervisory status. We divided these lists into three 

groups: employees with 0 to 5 years of service, employees with 6 or more 

years of service, and supervisors. We randomly selected 20 employees 

from each of these three groups. 8 The employee names and a standard 

invitation were supplied to our points of contact to disseminate to 

employees.At the majority of locations, we reached our goal of meeting 

with 8 to 12 employees in each discussion group; however, since 

participation was not compulsory, in some instances we did not reach the

recommended 8 participants in the group. Discussions were held in a 

semistructured manner, led by a moderator who followed a standardized 

list of questions. The discussions were documented by one or two other 

analysts at each location. 

Discussion Groups 

In conducting our discussion groups, our intent was to achieve 

saturation—the point at which we were no longer hearing new 

information. As noted, we conducted 36 discussion groups with three 

classifications of DOD civilian employees at the 12 DOD installations we 

visited (see table 5). Our design allowed us to identify differences, if any, 

in employee perceptions held by supervisors and employees with different 

lengths of employment. Discussion groups were conducted between 

November 2007 and March 2008. 

Scope of Our Discussion 

Groups 

 8

In a few locations, the population of employees with 0 to 5 years of service was too small 

to create a sample of 20 employees and subsequently achieve the 8-12 participants 

necessary for each of our groups. As a result, we expanded the population to include

employees with up to 8 years of service. 

Page 56 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

Table 5: Composition of Discussion Groups

Location 

Employees with

0-5 years of

experience

Employees with 6 

or more years of

experience Supervisors 

Total

participants in 

discussion

groups

Total NSPS 

employees at 

locationa

Air Force 

March Air Reserve Base, California 8 12 13 33 275

Randolph Air Force Base,Texas 9 9 10 28 1,487

Tinker Air Force Base, Oklahoma 13 15 7 35 2,538

Army 

Redstone Arsenal, Alabama 11 10 11 32 1,108

Fort Huachuca, Arizona 9 10 10 29 673

Fort Sam Houston, Texas 7 7 7 21 1,190

Navy 

Joint Warfare Analysis Center, 

Dahlgren, Virginia 

12 11 11 34 467

Naval Facilities Headquarters, Navy 

Yard, D.C. 

12 7 7 26 3,057

Marine Corps Tactical Systems 

Support Activity, 

Camp Pendleton, California 

9 11 12 32 183

Fourth Estate

Defense Microelectronics Activity, 

California 

8 15 11 34 121

DOD Inspector General, Arlington, 

Virginia 

7 16 8 31 1,316

Defense Threat Reduction Agency, Ft. 

Belvoir, Virginia 

4 10 7 21 616

Total 109 133 114 357b13,031

Source: GAO.

a

The totals listed include employees spiraled into NSPS as of February 2008. 

b

For one questionnaire we received, the location was not provided by the respondent; therefore, the 

total participants for all discussion groups above sums up to 356. However, we received 

questionnaires from 357 participants. 

A discussion guide was developed to facilitate the discussion group 

moderator in leading the discussions. The guide helped the moderator 

address several topics related to civilian employees’ perceptions of the 

performance management system, including their overall perception of 

NSPS and the rating process, the training they received on NSPS, the 

communication they have with their supervisor, positive aspects of NSPS, 

and any changes they would make to NSPS, among others. Each 

Methodology of Our Discussion 

Groups 

Page 57 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

discussion group began with the moderator greeting the participants, 

describing the purpose of the study, and explaining the procedures for the 

discussion group. Participants were assured that all of their comments 

would be discussed in the aggregate or as part of larger themes that 

emerged. The moderator asked participants open-ended questions related 

to NSPS. All discussion groups were moderated by a GAO analyst, while at

least one other GAO analyst observed the discussion group and took 

notes. After each discussion group, the moderator and note taker reviewed 

the notes from the session to ensure that all comments were captured 

accurately. 

We performed content analysis of our discussion group sessions in order 

to identify the themes that emerged during the sessions and to summarize 

participant perceptions of NSPS. We reviewed responses from several of 

the discussion groups and created a list of themes and subthemes. We then 

reviewed the comments from each of the 36 discussion groups and 

assigned each comment to the appropriate subtheme category, which was 

agreed upon by two analysts. If agreement was not reached on a 

comment’s placement in a category, another analyst reconciled the issue 

by placing the comment in either one or more of the categories. The 

responses in each category were then used in our evaluation and 

discussion of how civilian employees perceive NSPS. 

Content Analysis 

Discussion groups are not designed to (1) demonstrate the extent of a 

problem or to generalize the results to a larger population, (2) develop a 

consensus to arrive at an agreed-upon plan or make decisions about what 

actions to take, or (3) provide statistically representative samples or 

reliable quantitative estimates. Instead, discussion groups are intended to

provide in-depth information about participants’ reasons for holding 

certain attitudes about specific topics and to offer insights into the range 

of concerns and support for an issue. Specifically, the projectability of the 

information obtained during our discussion groups is limited for two 

reasons. First, the information gathered during our discussion groups on 

NSPS represents the responses of only the civilian employees present in 

our 36 discussion groups. The experiences of other civilian employees 

under NSPS who did not participate in our discussion groups may have 

varied. Second, while the composition of our discussion groups was 

designed to assure a distribution of civilian employees under NSPS, our 

sampling did not take into account any other demographic or job-specific 

information. Rather, our groups were determined solely on the basis of the 

employee’s supervisor or nonsupervisor classification and the employee’s

length of service with DOD. 

Limitations 

Page 58 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

We administered a questionnaire to discussion group participants to 

obtain further information on their background and perceptions of NSPS. 

The questionnaire was administered and received from 357 participants of

our discussion groups. The purpose of our questionnaire was to (1) collect 

demographic data from participants for the purpose of reporting with 

whom we spoke (see table 6); (2) collect information from participants 

that could not easily be obtained through discussion, e.g., information 

participants may have been uncomfortable sharing in a group setting; and 

(3) collect some of the same data found in past DOD surveys. Specifically, 

the questionnaire included questions designed to obtain employees’ 

perceptions of NSPS as compared to their previous personnel system; the 

accuracy with which they felt their ratings reflected their performance; 

and management’s methods for conveying individual and group rating 

information. Since the questionnaire was used to collect supplemental 

information and was administered solely to the participants of our 

discussion groups, the results represent the opinions of only those 

employees who participated in our discussion groups. Therefore, the 

results of our questionnaire cannot be generalized across the population of

DOD civilian employees. 

Use of a Questionnaire to 

Supplement Discussion Group 

Findings 

 Table 6: Composition of Discussion Groups by Demographic Category per Component 

Service

Category Air Force Army Navy Fourth Estate Total

Male 64 50 62 55 231

Female 32 32 30 31 125

Total 96 82 92 86 356a

American Indian or Alaskan Native 2 1 0 0 3

Asian 13 2 6 7 28

Black/African American 7 16 7 17 47

Hispanic 5 1 1 8 15

Native Hawaiian or other Pacific Islander 2 0 2 1 5

White 65 56 71 48 240

Missing or Non-response 2 6 5 5 18

Total 96 82 92 86 356a

Source: GAO.

a

Participants voluntarily self-reported demographic information in our questionnaire; some participants 

did not provide responses for all demographic questions. In addition, participants could select more 

than one response category for the ethnic and racial questions. Further, this table does not include 

results from one questionnaire, because we were unable to determine the service with which it was 

associated. Therefore, totals may not match overall total of 357 participants. 

Page 59 GAO-08-773 NSPS Implementation
Appendix I: Scope and Methodology 

We conducted our review from August 2007 to July 2008 in accordance 

with generally accepted government auditing standards. Those standards 

require that we plan and perform the audit to obtain sufficient and 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

Page 60 GAO-08-773 NSPS Implementation
Appendix II: E

to Missio

xample of Linking Performance

n and Objectives

Page 61 GAO-08-773

Appendix II: Example of Linking 

Performance to Mission and Objectives 

This slide was one of many presented to employees at Fort Sam Houston 

as part of a briefing titled “Garrison Action Plan and IPB.” The slide is 

designed to show employees that their work and performance are directly

aligned with the organization’s mission goals. Specifically, this chart 

shows National Security Personnel System (NSPS) as the foundation or 

bottom of the pyramid leading up to the command’s strategic plan. 

Further, the chart was designed to show employees that their individual 

objectives—which were to be “SMART”—should connect to the garrison’s 

action plan and ultimately to the strategic plan. 

Figure 4: Example of Linking Performance to Mission and Objectives

Part B

Relevant organizational

mission/strategic goals

Appropriate to your position

● Garrison mission

● Director

 ● Office chief

● METL task

NSPS Individual performance plans and 

GS/GM support forms

Operating plans

(METL/CLS)

IMCOM

Strat plan

S pecific

Measurable

Aligned

Realistic and relevant

T imed

SMART

Strategic action plan ● Objective/initiative ● Metric

Garrison action plan

Objective 1.

So, what else . . .

Performance Plan really is the foundation

Source: DOD.

NSPS Implementation
Appendix III: Additional Responses to 2007 

Status of Forces Survey of DOD Civilian Appendix III: Additional Responses to 2007 Employees 

Status of Forces Survey of DOD Civilian 

Employees 

In addition to the responses to the Department of Defense’s (DOD) Status 

of Forces Survey-Civilian (SOFS-C) we presented on page 30, we also 

identified other employee responses related to the National Security 

Personnel System (NSPS) or performance management from the 2007 

SOFS-C. The survey asked DOD civilian employees questions on various 

topics, such as overall satisfaction, leadership and management, retention,

personnel actions, motivation/development/involvement, performance 

management, and the NSPS. The following tables provide estimated 

percentage of employee responses. 

Table 7: Estimated Percentage of Employees Responding to Questions about Overall Satisfaction and Leadership and 

Management in May 2007 Status of Forces Survey-Civilian 

Response 

Question 

Employee 

description Satisfied Neither Dissatisfied

Overall satisfaction

Overall satisfaction with pay DOD 62% 16% 20%

NSPS 63 16 19

Leadership and management

Overall, how satisfied are you with management at your organization? DOD 49 25 26

NSPS 54 22 24

How satisfied are you with the policies and practices of your senior DOD 49 27 25

leaders? NSPS 52 25 24

How satisfied are you with the recognition you receive for doing a good DOD 48 26 26

job? NSPS 50 25 24

Source: GAO analysis of DOD data. 

Note: The estimated percentages are based on a 95 percent confidence interval and the margin of 

error is within +/- 2 percent. The response categories are collapsed for positive ("satisfied") and 

negative ("dissatisfied") responses. That is, "satisfied" is the estimated percentage of employees who

responded either "satisfied" or "very satisfied," while "dissatisfied" is the estimated percentage of 

employees who responded either "dissatisfied" or "very dissatisfied." 

Page 62 GAO-08-773 NSPS Implementation
Appendix III: Additional Responses to 2007 

Status of Forces Survey of DOD Civilian 

Employees 

Table 8: Estimated Percentage of Employees Responding to Questions about Leadership and Management, 

Motivation/Development/Involvement, and Performance Management in May 2007 Status of Forces Survey-Civilian 

Question 

Employee 

description Agree Neither Disagree

Leadership and management

I have trust and confidence in my supervisor DOD 62% 19% 19%

NSPS 66 17 17

Managers/supervisors deal effectively with reports of prejudice and DOD 52 34 13

discrimination NSPS 56 33 10

Managers/supervisors/team leaders work well with employees of different DOD 61 21 17

backgrounds NSPS 67 18 14

Managers review and evaluate the organization’s progress toward meeting its DOD 58 23 17

goals and objectives NSPS 62 21 16

I have a high level of respect for my organization’s senior leaders DOD 51 24 25

NSPS 56 22 22

In my organization, leaders generate high levels of motivation and commitment DOD 41 28 31

in the workforce NSPS 45 27 28

Motivation and morale

To what extent do you agree or disagree with the following statement? DOD 82 12 5

I know how my work relates to the agency's goals and priorities NSPS 83 11 5

Performance management

Performance appraisal is fair reflection of performance DOD 66 18 14

NSPS 68 18 12

Creativity and innovation are rewarded DOD 39 31 28

NSPS 45 29 24

Promotions in work unit are based on merit DOD 33 29 35

NSPS 41 28 27

In most recent appraisal, I understood what I had to do to be rated at different DOD 65 16 14

performance levels NSPS 65 16 15

Performance standards/expectations are directly related to the organization's DOD 66 24 9

mission NSPS 71 21 8

My bonus and cash awards depend on how well I perform my job DOD 52 20 27

NSPS 61 19 20

My current performance appraisal system motivates me to perform well DOD 47 31 22

NSPS 47 30 23

The people I work with cooperate to get the job done DOD 74 16 10

NSPS 79 13 8

The performance appraisal system I am under improves organizational DOD 31 40 29

Page 63 GAO-08-773 NSPS Implementation
Appendix III: Additional Responses to 2007 

Status of Forces Survey of DOD Civilian 

Employees 

Question 

Employee 

description Agree Neither Disagree

performance NSPS 28 41 31

Source: GAO analysis of DOD data. 

Note: The estimated percentages are based on a 95 percent confidence interval and the margin of 

error is within +/- 2 percent. The response categories are collapsed for positive ("agree") and negative 

("disagree") responses. That is, "agree" is the estimated percentage of employees who responded

either "agree" or "strongly agree," while "disagree" is the estimated percentage of employees who 

responded either "disagree" or "strongly disagree." 

Table 9: Estimated Percentage of Employees Responding to Question about

Performance Management in May 2007 Status of Forces Survey-Civilian 

Question Employee 

description Useful Neither Useless

Performance management

How useful is feedback? DOD 68% 25% 8%

NSPS 68 25 7

Source: GAO analysis of DOD data. 

Note: The estimated percentages are based on a 95 percent confidence interval and the margin of 

error is within +/- 2 percent. The response categories are collapsed for positive ("useful") and 

negative ("useless") responses. That is, "useful" is the estimated percentage of employees who 

responded either "useful" or "very useful," while "useless" is the estimated percentage of employees 

who responded either "useless" or "very useless." 

Table 10: Estimated Percentage of Employees Responding to Question about

Performance Management in May 2007 Status of Forces Survey-Civilian 

Question 

Employee 

description

Yes, regularly

throughout

year 

Yes,occasionally 

or at least once 

during the year No

Do you receive DOD 33% 50% 16%

performance feedback? NSPS 36 51 13

Source: GAO analysis of DOD data. 

Note: The estimated percentages are based on a 95 percent confidence interval and the margin of 

error is within +/- 2 percent. 

Page 64 GAO-08-773 NSPS Implementation
Appendix III: Additional Responses to 2007 

Status of Forces Survey of DOD Civilian 

Employees 

Table 11: Estimated Percentage of Employees Responding to Questions about 

Retention and Commitment in May 2007 Status of Forces Survey-Civilian 

Question 

Employee 

description Likely Neither Unlikely

Retention and commitment

How likely is it that you will leave at DOD 33% 21% 46%

the next available opportunity to 

take another job in the federal

government outside of the DOD? 

NSPS 34 20 47

Source: GAO analysis of DOD data. 

Note: The estimated percentages are based on a 95 percent confidence interval and the margin of 

error is within +/- 1 percent. The response categories are collapsed for positive ("likely") and negative 

("unlikely") responses. That is, "likely" is the estimated percentage of employees who responded 

either "likely" or "very likely," while "unlikely" is the estimated percentage of employees who 

responded either "unlikely" or "very unlikely." 

Table 12: Estimated Percentage of Employees Responding to Questions about the

National Security Personnel System in May 2007 Status of Forces Survey-Civilian 

Question 

Employee 

description Useful Neither Useless

National Security Personnel System

Usefulness of NSPS training; NSPS DOD 71% 22% 7%

performance management for 

managers/supervisors NSPS 72 21 7

Usefulness of NSPS training; DOD 70 22 8

human resources elements for 

managers, supervisors, and 

employees 

NSPS 70 22 8

Usefulness of NSPS training; NSPS DOD 66 25 8

performance management for 

employees 

NSPS 66 25 9

Usefulness of NSPS training; NSPS DOD 64 27 10

pay pool management NSPS 62 27 10

Source: GAO analysis of DOD data. 

Note: The estimated percentages are based on a 95 percent confidence interval and the margin of 

error is within +/- 2 percent. The response categories are collapsed for positive (“useful”) and 

negative (“useless”) responses. That is “useful” is the estimated percentage of employees who 

responded either “useful” or “very useful,” while useless is the estimated percentage of employees 

who responded either “useless” or “very useless.” 

Page 65 GAO-08-773 NSPS Implementation
Appendix III: Additional Responses to 2007 

Status of Forces Survey of DOD Civilian 

Employees 

Table 13: Estimated Percentage of Employees Responding to Questions about the

National Security Personnel System in May 2007 Status of Forces Survey-Civilian 

Question 

Employee 

description Positive Neither Negative

National Security Personnel System

Overall, what type of impact DOD 25% 38% 36%

will NSPS have on 

personnel practices in the 

DOD? 

NSPS 28 34 38

Source: GAO analysis of DOD data. 

Note: The estimated percentages are based on a 95 percent confidence interval and the margin of 

error is within +/- 1 percent. The response categories are collapsed for “positive” and “negative.” That

is, "positive" is the estimated percentage of employees who responded either "positive" or "very 

positive," while "negative" is the estimated percentage of employees who responded either 

"negative” or "very negative." 

Page 66 GAO-08-773 NSPS Implementation
Appendix IV: Other Themes Discussed by

Department of Defense Civilians during GAO 

Discussion Groups 

In addition to the themes that emerged during our discussion groups with 

select Department of Defense (DOD) civilian employees, which we presented 

on pages 34-39, we also identified other themes or topics that were discussed 

less prevalently by employees across all of the discussion groups we held. See 

table 14. 

Table 14: Additional Themes that Emerged during Discussion Groups with Select Employees 

Job objectives

Employees at six sites we visited expressed concerns about the time and effort it took to develop their objectives. Specifically, 

employees said it was difficult to write “SMART” (Specific, Measurable, Aligned, Realistic/Relevant, Timed) objectives that 

adequately captured all aspects of their job at the start of the performance cycle because, according to them, their jobs were 

often unpredictable or involved unexpected tasks over the course of the year. Employees also expressed concern over the fact 

that their objectives had to be rewritten several times during the year to incorporate shifting job duties. Others felt that their 

objectives were written in such a manner that made them impossible to exceed. 

Teamwork 

At six sites, employees we spoke with told us that NSPS has, and will continue to have, a negative impact on team work. Some 

participants in our discussion groups told us that employees no longer want to assist each other with their work because they are 

worried about getting credit for the work and would prefer to make themselves look better in front of management. Specifically,

employees were concerned that taking the time to help others takes time away from their own work, which is the basis for their 

objectives, rating, and eventual payout. Thus, we heard from one employee that assisting others will “help out another’s pocket” 

while financially disadvantaging them. Further, two employees we spoke with told us that employees are even keeping projects 

secret so that they can get credit for independently completing the project. However, at other locations we visited, participants 

discussed the use of the contributing factor, collaborating with others, to counter these employee concerns. 

Reconsideration

Employees at four sites expressed concern about the reconsideration process. Specifically, some employees in our discussion 

groups told us that even though they received information about the reconsideration process, they would not challenge a rating 

because they felt management would no longer view them as a team player. Further, some employees expressed concern that if 

they did challenge their rating, their supervisor or management would seek retribution during the next rating cycle. Other

employees saw no benefit in challenging their rating because the disputed rating is reviewed by the same individuals who 

finalized the rating. 

Ratings

As discussed on pages 34-35, employees at all sites we visited expressed some concern over the rating process. In addition to 

the concerns previously discussed, employees raised additional concerns with the process through which their ratings were 

determined. Some discussion group participants we spoke with said that more granularity was needed in the rating distribution 

and share values. One employee suggested using a 1 to 10 scale, as a way to better distinguish among employee performance. 

Further, employees at four locations we visited told us they would prefer to have their rating separate from their pay increase. 

Specifically, one employee told us that a smaller payout tied to a “good” (i.e., role model) rating was preferable. One employee, 

in particular, told us that her performance is tied to her self-esteem, including the praise she receives from management, and 

she did not want it tied to money. Further, several participants told us that supervisors were hesitant or not inclined to give

employees a rating other than a “3” because, for example, it required too much paperwork to give a lower rating or they did not

want to be seen as the “bad guy.” Still other participants expressed concern that the weights assigned to specific objectives be 

used to impact ratings 

Appendix IV: Other Themes Discussed by 

Department of Defense Civilians during GAO 

Discussion Groups 

Page 67 GAO-08-773 NSPS Implementation
Appendix IV: Other Themes Discussed by

Department of Defense Civilians during GAO 

Discussion Groups 

Job objectives

Timing of the cycle 

Employees we spoke with at eight locations told us that the lag between when the rating period ends, when they submit their 

self-assessment, and when they actually receive their rating and their payout is too long. Some employees expressed concern 

that they were already several months into the next rating cycle and working towards new objectives before they received their 

rating and feedback from the previous rating cycle. One employee in particular told us that, although the command was almost 5 

months into the rating cycle, employees at that location did not have their objectives finalized. The employee further told us that 

the prior year’s discussions on objectives and midyear review sessions were held at the same time. In addition, some 

employees were concerned that there were too many competing priorities—holiday leave and budgetary requirements—at the 

end of the fiscal year when the ratings and pay panel process occurred. 

Control points

Employees we spoke with at five sites expressed confusion and discontent over the existence of “pay lanes,” “pay caps,” and/or 

“control points.” Specifically, employees told us that they were unaware of the pay lanes, pay caps, and control points prior to 

the system’s implementation and only learned of these pay constraints once they were under the system. Employees further told 

us that they had thought they could advance to the top of their pay band, potentially earning more money through their 

performance increases than they would have through General Schedule step increases. However, once the system was 

implemented, several discussion group participants learned that artificial pay constraints would not allow them to reach the top 

of the pay bands and, upon reaching their pay caps, they would receive subsequent performance payouts as bonuses. 

Other positive comments on NSPS 

Discussion group participants at 11 of the 12 sites we visited spoke positively about certain aspects of NSPS. Specifically, some 

discussion group participants said that the initial design and intent of the system were good. Specifically, some employees 

commented on the system’s ability to recognize performance. Employees told us that they liked that pay increases were based

on performance and not on seniority, allowing them to receive pay increases faster than under the General Schedule. Other 

employees and supervisors told us that NSPS gives managers more flexibility to reward strong performers while allowing them 

to deal more effectively with poor performers. Finally, at some locations we heard that NSPS has increased the amount of 

communication between employees and their supervisors. For example, some discussion group participants have found that the 

process of drafting their self-assessment gave them the opportunity to point out accomplishments or activities to their supervisor 

that may have been overlooked. In addition, some discussion group participants have found that supervisors are providing their 

employees with more meaningful feedback on their performance. 

Source: GAO analysis. 

 

Page 68 GAO-08-773 NSPS Implementation
Appendix V: Comments from the Department Appendix V of Defense : Comments from the Department 

of Defense 

Page 69 GAO-08-773 NSPS Implementation
Appendix V: Comments from the Department 

of Defense 

Page 70 GAO-08-773 NSPS Implementation
Appendix V: Comments from the Department 

of Defense 

Page 71 GAO-08-773 NSPS Implementation
Appendix V: Comments from the Department 

of Defense 

Page 72 GAO-08-773 NSPS Implementation
Appendix V: Comments from the Department 

of Defense 

Page 73 GAO-08-773 NSPS Implementation
Appendix V: Comments from the Department 

of Defense 

Page 74 GAO-08-773 NSPS Implementation
Appendix VI: 

A

GAO Contact and Staff 

cknowledgments 

Page 75 GAO-08-773

Appendix VI: GAO Contact and Staff 

Acknowledgments 

Brenda S. Farrell, (202) 512-3604, or farrellb@gao.gov. 

In addition to the contact named above, Ron Fecso, Chief Statistician; 

Marion Gatling (Assistant Director), Lori Atkinson, Margaret Braley, Renee 

Brown, Jennifer Harman, Ron La Due Lake, Janice Latimer, Jennifer C. 

Madison, Oscar Mardis, Belva Martin, Julia Matta, Luann Moy, Carl 

Ramirez, Terry Richardson, Carolyn Taylor, and Martha Tracy made key

contributions to this report. 

GAO Contact 

Acknowledgments 

NSPS Implementation
Related GAO Products Related GAO Products 

The Department of Defense’s Civilian Human Capital Strategic Plan 

Does Not Meet Most Statutory Requirements. GAO-08-439R. Washington,

D.C.: February 6, 2008. 

Human Capital: DOD Needs Better Internal Controls and Visibility over 

Costs for Implementing Its National Security Personnel System. GAO-07-

851. Washington, D.C.: July 16, 2007.

Human Capital: Federal Workforce Challenges in the 21st Century. GAO07-556T. Washington, D.C.: March 6, 2007. 

Post-Hearing Questions for the Record Related to the Department of 

Defense's National Security Personnel System (NSPS). GAO-06-

582R. Washington, D.C.: March 24, 2006. 

Human Capital: Observations on Final Regulations for DOD's National 

Security Personnel System. GAO-06-227T. Washington, D.C.: November 

17, 2005. 

Human Capital: Designing and Managing Market-Based and More 

Performance-Oriented Pay Systems. GAO-05-1048T. Washington, D.C.: 

September 27, 2005. 

Human Capital: DOD's National Security Personnel System Faces 

Implementation Challenges. GAO-05-730. Washington, D.C.: July 14, 2005.

Questions for the Record Related to the Department of Defense's National

Security Personnel System. GAO-05-771R. Washington, D.C.: June 14, 

2005. 

Questions for the Record Regarding the Department of Defense's 

National Security Personnel System. GAO-05-770R. Washington, 

D.C.: May 31, 2005. 

Post-Hearing Questions Related to the Department of Defense's National

Security Personnel System. GAO-05-641R. Washington, D.C.: April 29, 

2005. 

Human Capital: Agencies Need Leadership and the Supporting 

Infrastructure to Take Advantage of New Flexibilities. GAO-05-

616T. Washington, D.C.: April 21, 2005. 

Page 76 GAO-08-773 NSPS Implementation
Related GAO Products 

Human Capital: Selected Agencies' Statutory Authorities Could Offer 

Options in Developing a Framework for Governmentwide Reform. GAO05-398R. Washington, D.C.: April 21, 2005. 

Human Capital: Preliminary Observations on Proposed Regulations for 

DOD's National Security Personnel System. GAO-05-559T. Washington,

D.C.: April 14, 2005. 

 

Human Capital: Preliminary Observations on Proposed Department of 

Defense National Security Personnel System Regulations. GAO-05-517T. 

Washington, D.C.: April 12, 2005. 

Human Capital: Preliminary Observations on Proposed DOD National 

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

March 15, 2005. 

Human Capital: Principles, Criteria, and Processes for Governmentwide

Federal Human Capital Reform. GAO-05-69SP. Washington, 

D.C.: December 1, 2004.

Human Capital: Building on the Current Momentum to Transform the

Federal Government. GAO-04-976T. Washington, D.C.: July 20, 2004. 

DOD Civilian Personnel: Comprehensive Strategic Workforce Plans 

Needed. GAO-04-753. Washington, D.C.: June 30, 2004. 

Human Capital: A Guide for Assessing Strategic Training and 

Development Efforts in the Federal Government. GAO-04-546G. 

Washington, D.C.: March, 2004. 

Human Capital: Implementing Pay for Performance at Selected 

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

23, 2004. 

Human Capital: Key Principles for Effective Strategic Workforce 

Planning. GAO-04-39. Washington, D.C.: December 11, 2003. 

DOD Personnel: Documentation of the Army’s Civilian WorkforcePlanning Model Needed to Enhance Credibility. GAO-03-1046. 

Washington, D.C.: August 22, 2003. 

Posthearing Questions Related to Proposed DOD Human Capital 

Reform. GAO-03-965R. Washington, D.C.: July 3, 2003. 

Page 77 GAO-08-773 NSPS Implementation
Related GAO Products 

Human Capital: A Guide for Assessing Strategic Training and 

Development Efforts in the Federal Government. GAO-03-893G. 

Washington, D.C.: July, 2003. 

Defense Transformation: DOD's Proposed Civilian Personnel System 

and Governmentwide Human Capital Reform. GAO-03-741T. 

Washington, D.C.: May 1, 2003. 

Human Capital: DOD’s Civilian Personnel Strategic Management and 

the Proposed National Security Personnel System. GAO-03-493T. 

Washington, D.C.: May 12, 2003. 

Human Capital: Building on DOD's Reform Efforts to Foster 

Governmentwide Improvements. GAO-03-851T. Washington, D.C.: June 4, 

2003. 

High-Risk Series: Strategic Human Capital Management. GAO-03-120. 

Washington, D.C.: January 2003. 

Acquisition Workforce: Status of Agency Efforts to Address Future 

Needs. GAO-03-55. Washington, D.C.: December 18, 2002. 

Military Personnel: Oversight Process Needed to Help Maintain 

Momentum of DOD’s Strategic Human Capital Planning. GAO-03-237. 

Washington, D.C.: December 5, 2002. 

Managing for Results: Building on the Momentum for Strategic Human

Capital Reform. GAO-02-528T. Washington, D.C.: March 18, 2002. 

A Model of Strategic Human Capital Management. GAO-02-373SP. 

Washington, D.C.: March 15, 2002. 

Human Capital: Taking Steps to Meet Current and Emerging Human 

Capital Challenges. GAO-01-965T. Washington, D.C.: July 17, 2001. 

Human Capital: Major Human Capital Challenges at the Departments of 

Defense and State. GAO-01-565T. Washington, D.C.: March 29, 2001. 

(351086) Page 78 GAO-08-773 NSPS Implementation
GAO’s Mission The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To

have GAO e-mail you a list of newly posted products every afternoon, go 

to www.gao.gov and select “E-mail Updates.” 

The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to: 

U.S. Government Accountability Office 

441 G Street NW, Room LM 

Washington, DC 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Ralph Dawn, Managing Director, dawnr@gao.gov, (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, DC 20548 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Mail or Phone 

To Report Fraud,

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

PRINTED ON RECYCLED PAPER