Office of Policy and Evaluation

Perspectives

 The U.S. Office of Personnel

 Management in Retrospect

 Achievements and Challenges

 After Two Decades

A report to the President and the Congress of the United States

by the U.S. Merit Systems Protection Board

A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD III

U.S. Merit Systems Protection Board

Beth S. Slavet, Chairman

Barbara J. Sapin, Vice Chairman

Susanne T. Marshall, Member

Office of Policy and Evaluation

Director

John M. Palguta

Project Managers

Jamie J. Carlyle, Ph.D.

Karen K. Gard

Project Analyst

Harry C. Redd III

A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD V

Table of Contents

OPM: A Twenty-Year Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

OPM has succeeded in achieving the CSRA’s vision for decentralization and deregulation of HRM. . . . . . . . . . . . 4

OPM has revitalized its program to oversee Federal HRM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Downsizing and dwindling resources have affected the way OPM does its job and have 

threatened agency HR effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

OPM has not always provided the program leadership agencies want and need. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Classification and compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Staffing Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Final thoughts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

General recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

OPM Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Appendix 1 — Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Origins of Today’s Civil Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Civil Service Growth Leads to Need for Reform. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

MSPB’s Current Review of OPM—Methods and Sources of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Second Decade Marked by Major Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Findings After 20 Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Decentralizing Personnel Management Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Overseeing the System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Program status at the end of the first 10 years (1979-1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

A period of further program adjustments (1989-1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

An era of total change (1995 to present) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Agency self-evaluation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Agencies’ views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Providing Program Guidance and Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Recruiting and retaining a high quality workforce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Employment Service mission and programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Customers’ views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Reimbursable services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Federal classification and compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Research programs and demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Equal employment opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Performance management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Retirement and insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

SES and executive development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Appendix 2 — Interrogatory Survey and Participating Agencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Appendix 3 — Letter from OPM Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 1

OPM: A Twenty-Year Overview

Some twenty years ago the Civil Service Reform Act (CSRA) replaced the Government’s 

100-year-old Civil Service Commission with the U.S. Office of Personnel Management 

(OPM). Along with eliminating the bipartisan Commission and creating the new OPM 

as an advocate of administration policies, the CSRA also established the Merit Systems 

Protection Board (MSPB or the Board). Since MSPB was created with a three-member 

bipartisan Board serving fixed, non-renewable, seven-year terms, it retains the critical 

element of independence in the oversight of the civil service and the merit systems. The 

statute also requires the Board to periodically provide the President and Congress with an 

analysis of whether the actions of OPM are in accord with merit system principles and 

free from prohibited personnel practices.1

The Board has, over the years, conducted numerous studies focused on specific OPM 

programs and activities in various areas of Federal human resources management 

(HRM). In addition, the Board provided a general retrospective review of OPM after its 

first ten years. This report presents the results of a second retrospective—this time 

providing an assessment based on two decades of oversight and observation. This report is 

not intended as an all-inclusive commentary on OPM’s programs and activities. It 

focuses, rather, on our perspectives regarding OPM’s overall performance, looking, in 

particular, at those issues that cause concern or deserve continuing scrutiny. The fact that 

this report focuses on areas of concern and opportunities for improvement, however, 

should not in any way overshadow the many important contributions OPM and its staff 

have made and continue to make in support of effective Federal HRM.

Overall, we have found that OPM’s performance has been marked by singular successes, 

but that some important programs are still in need of attention. More specifically, OPM 

has made commendable progress in a number of areas such as achieving the CSRA’s vision 

of a decentralized civil service, improving HR oversight, and fostering a diverse and 

family-friendly workplace. We also find, however, that OPM’s leadership needs to be 

1 5 U.S.C §§1204 and 1206.
2 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

more vigorous in responding to a number of critical program areas such as applicant 

examining and employee compensation policies and practices.

This report recognizes that in enacting the 1978 civil service reform, Congress clearly 

intended that OPM serve as an advisor to and advocate for the President’s personnel 

policies and programs. In addition, Congress expected OPM to lead and oversee the civil 

service, using as its policy compass the values embodied in a set of statutory merit system 

principles. These are not easy tasks and they are made more difficult by the dramatic and 

at times tumultuous changes that have affected the federal workforce and OPM over the 

last twenty years. OPM must constantly balance many different, and sometimes 

conflicting, interests and issues among many interested parties. In seeking a proper 

balance, however, OPM is expected to serve both the President and the public by being a 

forceful advocate for strategic and merit-based HRM programs, policies, and practices 

and the resources necessary to implement them. As outlined in this report, MSPB has 

identified several areas where, if that advocacy exists, it has not been fully successful based 

on the results achieved to date.

Looking ahead, there is a growing consensus that the Federal Government may be facing 

a human capital crisis with regard to its workforce. Earlier this year, for example, the 

General Accounting Office identified strategic human capital management as a 

governmentwide high-risk area. If OPM is to be effective in helping to address this 

situation, it’s clear that several conditions must be present. This report concludes with 

recommendations on what those conditions should be.

The OPM that has evolved since passage of the 

Civil Service Reform Act over twenty years ago is a 

decidedly different agency from the Civil Service 

Commission that it replaced. The dramatic change 

sought by the CSRA has, over the years, become a 

reality: OPM is a transformed agency, and Federal 

personnel management is a redefined enterprise. 

And while there will always be critics of the Government’s systems for hiring, firing, and paying 

people—major systems seldom being problemfree—it must be acknowledged that OPM has presided over Federal personnel functions during a 

period in which many significant improvements 

have been made in HR programs and processes.

The transformation of the Federal civil service from 

a patronage program to the values-centered, meritbased system that OPM and MSPB oversee today, 

began in the latter part of the 19th century. In the 

face of an entrenched spoils system that was ripe for 

major reform, Congress passed the Pendleton Act, 

which tackled many of the problems of patronage 

by emphasizing the need for competitive examinations as a criterion for entering the Federal civil service. That legislation also created the Nation’s 

central personnel agency, the bipartisan U.S. Civil 

Service Commission, which was to ensure that the 

Government’s examination program was fair and 

impartial.

Although the Commission’s initial concern was 

merit-based hiring, it became evident to policymakers that focusing on employee selection was not 

enough to ensure the efficient operation of the civil 

service. Other personnel functions such as job classification, pay, training, promotions, and retirement programs were also critical to sound 

operations. Consequently, the Civil Service Commission began expanding its responsibilities into 

other areas of human resources.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 3

Carrying out these growing responsibilities 

required systems and procedures that were up to 

the task of ensuring that the merit system was not 

being compromised. Over the years, as the complexities of the systems and procedures grew, so did 

criticism of the system’s increasing delays and inefficiencies. In the 1970s, President Carter characterized the system as “a bureaucratic maze which 

neglects merit, tolerates poor performance, permits 

abuse of legitimate employee rights, and mires 

every personnel action in red tape, delay, and confusion.”2

The creation of the Office of Personnel Management was part of the reform legislation that was 

passed to address these deficiencies. The Civil Service Reform Act of 1978 established OPM to be 

the administration’s voice on personnel matters as 

well as the Government’s leader in Federal personnel management. Changing the Government’s central personnel agency from a bipartisan 

organization to an agent of the President was seen 

as a way to stimulate reform of the Federal civil service by putting personnel policymaking into the 

hands of appointees who would be more responsive 

to the administration and its personnel management goals than the Commission was likely to be, 

given its divided responsibility and accountability. 

OPM was to ensure that Federal personnel management programs and systems enabled the Government to serve the public effectively, while at the 

same time preserving the merit system.

The Civil Service Reform Act enumerated a number of actions that OPM was to take, and roles it 

was to play, in order to achieve these goals. The law 

called for OPM to delegate personnel management 

authorities to Federal agencies; operate an aggressive oversight program that would ensure that 

agencies’ use of those personnel authorities was 

consistent with the merit system principles; and 

exhibit leadership of the civil service system 

through active improvement efforts in areas such as 

research and demonstration projects, recruitment 

and retention of highly qualified employees, performance management, and equal employment 

opportunity.3

When, after OPM’s first 10 years in operation, the 

Board conducted a review that asked whether 

OPM had met the expectations of the Civil Service 

Reform Act, the answer—not surprisingly, given 

the enormity of the undertaking—was yes and no. 

Although OPM could not have been expected by 

that time to have cured all of the problems plaguing the Federal civil service system, it was nonetheless envisioned as the agency to take the lead in 

bringing about needed changes. Consequently, 

expectations for OPM leadership were high.

The degree to which OPM has exercised that 

hoped-for leadership, and the success it has 

achieved, varies across multiple HRM functional 

areas and critical issues. Early in OPM’s second 

decade in operation, it was recognized that much 

remained to be accomplished. James King, OPM 

director in the early 1990s, asserted that “[The 

Civil Service Commission’s] rebirth in 1979 as the 

Office of Personnel Management was intended to 

reshape its identity from rulemaker and enforcer to 

developer and supporter of management systems to 

make the Federal agencies more effective in serving 

the public. Nevertheless, though some progress has 

been made, the process of change is incomplete. 

OPM still oversees a regulatory system based on 

central control, and has failed to embrace its new 

responsibility as a management agency.”4

But the decade of the nineties saw real and rapid 

change in the Federal Government as a whole, and 

in the human resources business no less than any 

other. The process of change that Director King 

viewed as incomplete has continued apace, so that 

2 U.S. Merit Systems Protection Board, “U.S. Office of Personnel Management and the Merit System: A Retrospective Assessment,” June 1989, p. 1.

3 Ibid., p. 3.

4 National Performance Review, “Office of Personnel Management,” Accompanying Report of the National Performance Review, September 1993, p. 1.
4 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

now even the vocabulary of the Federal personnel 

system is different. The business that once was 

“personnel” is now “human resources” (on its way, 

it seems, to becoming “human capital”). The formerly bureaucratic approaches to providing services 

have become “entrepreneurial.” And employees, 

supervisors, serviced activities, management officials, members of the public, and nearly any other 

persons or organizations with an interest in personnel are “customers.” These changes in language 

reflect the more substantial changes in Federal 

human resources management that OPM has been 

expected to cope with and lead.

Many of the significant HRM changes in OPM’s 

second decade have been driven by initiatives—

both budgetary and programmatic—of Congress 

and the administration. One of the most notable of 

these is the Clinton administration’s National Performance Review (NPR)5

, which studied Federal 

programs with the intent of “reinventing” Government operations to make them more efficient and 

cost effective. Among the changes that the NPR 

called for were “maximum deregulation and delegation, trust, accountability for results, decentralization, and entrepreneurial behavior.”6

 And, in fact, 

the reforms associated with reinventing Federal HR 

management may have been what fueled the final 

push toward decentralization of personnel 

authorities—particularly examining and hiring 

authorities—that the CSRA envisioned. This issue 

and others about which we have special observations and concerns are addressed in the pages that 

follow.7

OPM has succeeded in achieving the 

CSRA’s vision for decentralization and 

deregulation of HRM.

For years, OPM kept a tight hold on hiring authorities through centralized examining and referral, 

even in the face of the CSRA’s intent to change significantly the way people were hired for Federal 

jobs. But by the mid 1990s, OPM had delegated 

the lion’s share of responsibility for recruiting and 

examining new employees to the agencies. Today, 

the work required to competitively hire new 

employees is generally performed by agency personnel staffs working in the Government’s approximately 650 delegated examining units.8

 These 

examining units are responsible for publicizing the 

existence of job vacancies and for assessing candidates in order to refer the best ones to selecting officials for consideration. The units determine 

whether they themselves will do the work involved 

in the recruitment, assessment, and referral of candidates, or whether they will pay some other organization (such as OPM or other agencies) to do the 

work.

Giving agencies (and in turn agency managers) 

more direct control of Federal hiring was meant to 

eliminate red tape and delays. Although Federal 

agencies initially offered some resistance to the delegations of examining authority because of the 

workload increases it meant for them, they began 

to see these delegations in a more favorable light, 

recognizing them as a way to exercise more control 

over the hiring process and streamline the cumbersome, time-consuming procedures of earlier times. 

Our interrogatory surveys confirm agency satisfaction with delegation of examining authority: survey 

5 The National Performance Review was later renamed the National Partnership for Reinventing Government.

6 Op. cit., National Performance Review, p. 1.

7 Our discussion is based on a number of sources of information: various studies conducted since the CSRA created OPM, feedback from Federal agencies, discussions with OPM officials, and our interactions with agency staffs and others, both within and outside Government, who have an interest in maintaining a 

merit-based civil service system. In addition, OPM shared with us data from its 1998 customer satisfaction survey, including the views of 43 human resources 

directors and over 1,300 HR specialists. We incorporated these data into our discussion and also administered our own interrogatory surveys to HR directors of 

the largest Federal departments and agencies (as well as a sample of the remaining smaller Federal agencies). These information sources also provided material 

for appendix 1 of the report which presents discussions (and somewhat more detail) on several specific OPM program areas. 

8 U.S. Merit Systems Protection Board, “The Role of Delegated Examining Units: Hiring new Employees in a Decentralized Civil Service,” August 1999, p. vii.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 5

respondents were nearly unanimous in saying that 

the delegation has been beneficial in helping them 

fill their jobs more quickly and cost-effectively than 

in the past, and with greater satisfaction on the part 

of hiring officials.

At the same time, our interrogatories revealed some 

lingering concerns about the delegation of examining authorities. For example, agency officials worry 

that the quality of the candidate assessments may 

suffer when delegated examining units have to cope 

with very heavy workloads. At the time we collected information for this report, some agencies 

expressed concern that they had not been delegated 

authority to examine for those entry level professional and administrative positions that are covered 

by the Luevano consent decree.9

 In November 

2000, OPM addressed this concern by delegating 

to agencies authority to administer the examination 

that it had been using for positions covered by the 

decree.

In responding to our interrogatories, a number of 

agency officials also complained that in the process 

of decentralizing, delegating, and deregulating, 

OPM eliminated too much valuable guidance, 

such as the entire Federal Personnel Manual, which 

might have been more helpful as a personnel guidebook for managers taking on HR responsibilities 

than the less detailed title 5 of the U.S. Code or the 

Code of Federal Regulations that remain. The timing of this event, coinciding as it did with increasing delegation of personnel matters to agency 

managers, may have contributed to its unpopularity with many in the Federal personnel community. 

The provisions of the 7,000-page FPM often were 

burdensome, and the Board, in a 1993 report recommended that OPM and Congress reduce the 

scope and volume of Federal personnel laws and 

regulations in conjunction with efforts to increase 

managers’ and supervisors’ involvement and the 

competence of Federal HR staffs.10 Over the years, 

the FPM had become to many Federal human 

resources specialists a set of requirements, not guidance, and was relied upon as an ultimate authority 

on personnel matters by both managers and HR 

staff. Its elimination was seen as rather abrupt. In 

its capacity as an agent of administration policy, 

however, OPM wanted to make a strong statement 

about eliminating excessive guidance. Dispensing 

with the FPM was a dramatic way to do this. As 

responses to our interrogatories suggest, however, 

whether this was ultimately in the best interests of 

Federal human resources management is open to 

dispute. In some agencies the elimination of the 

FPM did not result in efficiencies brought about by 

freedom from excessive control. Rather, to avoid 

numerous and inconsistent interpretations of the 

laws and regulations that remained, some agencies 

came to rely on internal regulations that often were 

clones of the FPM.

Despite reservations voiced by a number of interested parties, OPM has been generally successful in 

putting HR authority into the hands of Federal 

managers. As a critical accompaniment to that 

achievement, OPM has focused much attention 

and effort on oversight of human resources programs in Federal agencies. With agencies having 

been given greatly increased control over personnel 

matters and having been relieved of much of the 

interpretive guidance that formerly applied to their 

actions, an aggressive program to assure that personnel authorities are not misused is particularly 

important. OPM has also accomplished the intent 

of the CSRA in this important program, which is 

discussed below.

9 The Luevano consent decree is a 1981 agreement that settled a lawsuit alleging that a written test, the PACE, or Professional and Administrative Career Examination, had adverse impact on African Americans and Hispanics. The provisions of the consent decree are still in effect. More details about the consent decree 

are available in the Board’s report “Restoring Merit to Federal Hiring: Why Two Special Hiring Programs Should be Ended,” January 2000.

10 U.S. Merit Systems Protection Board, “Federal Personnel Offices: Time for Change?” August 1993.
6 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

OPM has revitalized its program to 

oversee Federal HRM.

Oversight of the civil service system has always 

been a core OPM mission. However, under OPM’s 

stewardship, this mission has not always been wellserved. During OPM’s first 10 years, the regulatory 

compliance aspects of the oversight program 

appeared to have been handed off to the agencies 

and the program in general lacked the capacity to 

identify systemic problems or abuses. But in the 

late 1980s and early 1990s the oversight program’s 

emphasis moved from reviewing agency statistical 

indicators to examining agency compliance with 

regulations and focusing on individual installation 

needs.11

The oversight program received an important boost 

when OPM undertook an internal reorganization 

in 1995. Previously, the function had been positioned organizationally under an associate director 

who was responsible for a number of high-profile 

programs including labor relations, compensation, 

and workforce performance. In that environment, 

oversight tended to get lost. But the 1995 reorganization re-positioned the function under an associate director whose only functions were to be (and 

remain now) oversight of the Federal civil service, 

improvement of personnel policies and programs, 

and helping agencies meet mission goals through 

effective human resources management. This structure is much more consistent with the real importance of the oversight function, and has resulted in 

more consistency in oversight program philosophy 

and delivery.

The program has made merit system principles its 

focal point, easing away from the rigid case-examining and compliance-oriented reviews that had 

sometimes characterized the program in the past. 

This has met with the approval of agency officials. 

One of our interrogatory survey respondents noted 

that the departure from examining only cases and 

records “helps promote a more balanced view of 

HR performance and accountability . . . [and] 

opens avenues for candid discussions of HR in an 

agency.” We had some concern that OPM’s oversight is now so focused on outcomes that it had lost 

sight of how important process can still be to the 

integrity of the merit system. For example, agency 

merit promotion programs have systematic candidate assessment processes that are applied uniformly to job applicants to assure that the best 

candidates are considered for job vacancies. Ensuring that those processes are applied fairly and consistently is as important an oversight activity as 

outcome measures such as the number of jobs filled 

and the length of time it took to fill them. OPM 

agreed that process is important and reported that 

it reviews both outcomes and process, but that its 

oversight reports emphasize process only “when 

there is a negative impact on a merit principle.”

Several survey respondents also commended 

OPM’s efforts to encourage agency self-assessment 

and offered positive observations about a self-evaluation program they were developing with OPM’s 

help. According to one of these respondents, 

“Given OPM’s own dwindling resources, the overall cause of personnel program compliance and 

effectiveness may be better served by helping agencies evaluate themselves.”

OPM still is looking for the proper balance 

between focusing on outcomes and reviewing procedural correctness, and it still must find a way for 

its oversight reviews to address the fact that HRM 

accountability no longer lies only with the personnel office, but also with line managers and supervisors who are exercising delegated authorities. OPM 

staff have taken steps to improve the collection, 

administration, and accuracy of statistical workforce data, currently maintained in OPM’s Central 

Personnel Data File (CPDF). OPM needs to show 

11 The 1998 MSPB report, “Civil Service Evaluation: The Evolving Role of the U.S. Office of Personnel Management,” provides more details on OPM’s HR 

evaluation program.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 7

strong leadership in fostering agency programs for 

self-monitoring.

Overall, OPM’s oversight program is one that 

agency personnel officials are generally pleased 

with, and one that seems to have been given the 

appropriate amount of attention and support. In 

fact, the oversight function is fully funded by 

appropriated funds (unlike a number of other critical OPM services that are marketed and sold to the 

agencies), and thus avoids potential conflicts of 

interest. As OPM enters its third decade, the oversight program is sound, with OPM recognizing the 

oversight problems that it still faces and continuing 

to devise ways to address those challenges.

Downsizing and dwindling 

resources have affected the way 

OPM does its job and have 

threatened agency HR effectiveness.

In the Board’s 1989 report looking back over 

OPM’s first ten years, the Board expressed concern 

about the significant cutbacks in funding and staff 

that had occurred during that period, noting that a 

lack of resources could continue to present an 

obstacle to OPM’s effective fulfillment of the 

CSRA’s expectations. That concern persists. The 

staff reductions that were central to the goals of the 

NPR left OPM, at the end of the last decade, with 

less than half the staff it had had at the 

beginning—from 6,208 employees in 1993 to 

2,984 in 2000. Many of these cuts were accomplished through OPM’s divesting itself of its investigations and training operations, but all functional 

areas in the agency experienced some personnel 

reductions.

This dramatic decrease in staff resources forced 

OPM into different ways of doing business. Many 

functions formerly performed by OPM have been 

delegated to agency HR offices; others have been 

privatized. Much of the HR work that OPM traditionally had done to assist agencies in operating 

and improving their personnel programs remains 

within OPM’s purview, but is no longer available 

to agencies as a free service. Budget reductions have 

moved OPM into a cost-recovery operation for 

many of its services. Today, when Federal agencies 

need help in recruiting candidates, planning reductions-in-force, processing applications, administering tests, assessing employee training needs, 

restructuring work, or a host of other services, they 

can visit the OPM web site devoted to consulting 

services and be greeted by the motto “Human 

Resource Solutions on a Reimbursable Basis.” 

Organizations within OPM that used to give agencies this kind of help in the normal course of their 

work now must pay their own way by selling those 

services to the agencies.

These changes are very much in the entrepreneurial 

spirit that has marked Government activities during the 1990s, and agencies that have purchased 

OPM services are generally pleased with them. 

However, the situation raises questions about what 

agencies are to do if their own budgets don’t permit 

much spending on HR initiatives, especially in 

light of the fact that they now have the delegated 

responsibility for recruiting and examining, which 

they have no choice but to fund. While the transfer 

of examining responsibilities to the agencies may 

have relieved OPM of a considerable burden, the 

agencies have also experienced staff and budget cuts 

that affect their personnel programs. Federal HR 

staffing levels dropped by 21 percent between 1993 

and 1997, with some agencies cutting their HR 

workforce as much as 40 percent.12

Under such circumstances, it seems reasonable to 

be concerned about whether agencies have sufficient knowledge and ability on their staffs to manage HR programs for the 21st century and, if they 

don’t, whether they can afford to purchase the 

expertise they need from OPM or other consultants. And, in the future, if agencies begin to rely on 

themselves or other consultants more than on 

12 Figura, Susannah Z., “Personnel Freedom,” Government Executive, March 1999.
8 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

OPM, will OPM be able to retain the expertise to 

remain at the forefront in the Federal human 

resources business?

OPM has not always provided the 

program leadership agencies want and 

need.

OPM has shown initiative and creativity in many 

efforts to help agencies meet HR needs in areas 

such as retirement and insurance, performance 

management, and aspects of recruitment and staffing, including executive staffing and development. 

(Appendix 1 to this report addresses some of these 

programs.) Indeed, considering the dramatic 

downsizing and budgetary constraints OPM has 

faced over the past decade, the agency’s efforts have 

been commendable. However, in the opinion of 

some agencies we have heard from over the years, 

things have not improved significantly in a number 

of other areas, and OPM has been criticized for not 

showing the type of leadership needed to maintain 

the most effective civil service system possible.

For example, a growing consensus that the Federal 

government is facing a human capital crises is 

driven, in part, by the aftermath of the manner in 

which the Federal government identified, met, and 

then exceeded its workforce downsizing goals over 

a seven-year period. A lack of good workforce planning during this time has resulted in numerous 

examples of serious skills imbalances and concerns 

about the capacity of Government to fulfill its 

many missions.13 OPM cannot and should not be 

held solely accountable for this situation, but neither can OPM, as the president’s primary advisor 

on civil service issues, absolve itself of any responsibility. In like manner, we found that agencies are 

still frustrated with the lack of progress in improving the Federal classification and compensation system. Agencies also find it difficult to administer 

recruitment and staffing programs that both meet 

their needs and adhere to all of the multiple policies and laws that govern the employee selection 

process. These programs are discussed in the sections that follow.

Classification and compensation. The statutory 

Federal classification and compensation systems (5 

USC chapters 51 and 53, respectively) have been 

the target of much criticism over the last several 

decades. The classification system, which has 

existed essentially in its present form since the late 

1940s, is believed by critics to be antiquated and 

not particularly applicable to the work and workers 

of today. The reasons for the system’s growing irrelevance have been alluded to by former OPM 

Director Janice Lachance who has commented on 

the ineffectiveness of organizing the workplace and 

its HRM systems around traditional “positions.” 

“In many organizations now,” she has said, 

“employees are assigned to a position, but are called 

upon to perform one role today and another 

tomorrow . . . Selections for these assignments are 

often based not on the employee’s position . . . but 

rather on the skills of the particular employee . . . 

So, in the future, staffing and employment will be 

quite a different process than our traditional model 

of simply matching employees with specific positions that are expected to remain fairly stable.”14

The former director makes an excellent point, and 

one that was echoed by some respondents to our 

interrogatory survey, one of whom observed, “The 

issue of how Federal employees will be compensated for their work in future years is one of the 

most important matters to be addressed in the next 

century. A new compensation system that rewards 

contribution and serves as an incentive to productivity is required. OPM leadership to foster this 

kind of development would be welcome.”

13 Details on human resources problems in specific agencies are discussed in “High-Risk Update” (GAO-01-263, pp. 73-81), the U.S. General Accounting 

Office’s January 2001 report on Governmentwide high risk areas. In that report, GAO has identified 20 agencies with human capital challenges and program 

risks, many of them a result of staffing shortfalls and skills losses. 

14 Speech by Janice Lachance at the Strategic Compensation Conference, Alexandria, VA, September 8, 1999.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 9

It’s encouraging to note that OPM has now publicly recognized the significant changes that have 

occurred in the nature of work, but these changes 

have not come about suddenly. They have been 

brewing for years. Of course, the pace of the 

change seems to be increasing, making it more difficult to keep up with the problem. And OPM has 

made efforts to simplify the classification of many 

jobs by modifying various classification standards, a 

move that has given Government managers needed 

flexibility. But this has merely changed the guidelines used to classify jobs; the basis for those 

guidelines—the statutory grade definitions in 

chapter 51 of title 5, U.S. Code—remains 

unchanged. Moreover, this has not changed the 

role of classification, which remains the primary 

determinant of an employee’s pay. Thus OPM’s 

efforts have not changed the system for organizing 

the workplace and placing value on the work that is 

performed. Consequently, Federal employees are 

remunerated in basically the same way today as at 

the end of World War II. At that time, most work 

was routinized, and an employee’s compensation 

was determined more by position—assigned duties 

and responsibilities—than by individual performance skills and contributions. But Federal work is 

no longer routinized, and it has not been for quite 

some time. While it is reassuring that OPM recognizes this change, a more aggressive demonstration 

of HR leadership would have included a revamping 

of the system for compensating workers that is 

much more comprehensive than the rewriting of 

standards has proven to be.

Federal compensation, like job classification, also 

has been criticized, primarily because of the putative pay gap between Federal and private sector salaries for similar jobs. But unlike the classification 

system, the compensation system became the subject of legislative reform within the first decade of 

OPM’s existence. Discontent with the compensation system led OPM, in the late 1980s, to oversee 

an extensive research effort to identify specific system problems and to plan appropriate remedies. 

Among the issues addressed was the pay gap. In 

1990, largely as a result of OPM’s efforts, Congress 

passed the Federal Employees Pay and Comparability Act (FEPCA) with the intent of closing that gap 

over a nine-year period by focusing on geographical 

locations rather than treating positions the same 

way across the board.15

Nonetheless, in the years since the passage of 

FEPCA, the pay gap that it addressed remains. Following passage of the pay act, a new presidential 

administration took charge, and asserted that the 

FEPCA methodology was flawed. The law’s critics 

contend, among other things, that FEPCA’s concept of comparability is fundamentally flawed, and 

that the methodology fails to credit all the advantages of Federal employment (e.g., employee benefits and intangibles such as job and retirement 

security) in calculating Federal comparability with 

the private sector. OPM, which under an earlier 

administration had helped to craft the legislation 

and its methodology, now finds itself echoing these 

criticisms of FEPCA. Thus, during the past ten 

years, the law governing pay comparability has 

been effectively ignored, and Federal salary 

increases have not been at the levels FEPCA calculations called for. As of 2001, locality rates covered 

approximately 38 percent of the amount needed to 

reduce pay disparities to 5 percent, far less than 

envisioned when FEPCA was passed. One writer 

described the situation this way: “Inadequate political support for resolving Federal workers’ pay 

problems offsets any interest in improving the program. Despite Congress’ willingness to enact 

FEPCA in 1990 and accept the need for locality 

pay, the pay gap is still an issue in every one of the 

metropolitan areas defined for locality pay differentials.”16

15 Friel, Brian, “Pay gap takes center stage again,” GovExec.com, January 7, 1999.

16 Risher, Howard, “Why Your Pay Doesn’t Stack Up,” Government Executive, August 1997.
10 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

Although the framers of FEPCA apparently didn’t 

view the methodology they created as a problem, 

reasonable people can disagree on such matters. 

And in an environment in which the best interests 

of the civil service and Federal HRM come first, a 

reasonable person might expect that if methodology were the problem, the methodological deficiencies would have been corrected some time during 

the decade since the pay comparability act became 

law. Whether that would have resulted in higher or 

lower Federal pay, it’s certain to have resulted in the 

dissatisfaction of one or more of OPM’s constituencies. Deciding on a course of action in this regard 

is difficult. There are parties who are interested in 

keeping Federal pay lower, and parties who want 

Federal pay to rise.

It is readily apparent, under these circumstances, 

why OPM’s lack of action on this issue is viewed by 

some as a failure of leadership. One interrogatory 

survey respondent put it this way: “[For OPM], 

trying to change the compensation system is like 

trying to steer the Titanic with an oar—just doesn’t 

seem to have any effect. We have been mumbling 

about grade banding, series consolidation, compensation reform, etc., for years and Rip Van Winkle 

could return after his 20-year nap and not miss a 

beat.”

It is only relatively recently that OPM has begun to 

resume leadership in the compensation area, having 

established in 1997 a new Workforce Compensation and Performance Service to “create a performance-oriented total compensation system suitable 

for the multi-faceted Federal workforce of the 21st 

century.”17 In 1999, OPM announced its intention 

to undertake an extensive study of Federal pay and 

benefits in order to “develop a performance-oriented system of total compensation within the next 

two to three years . . . [with the] goal of proposing 

legislative changes to achieve a modernized pay system by the year 2002.”18

The comprehensive approach that OPM seems to 

be taking is encouraging. However, former director 

Lachance warned that “since legislation will be 

essential to make systemic changes, this is not a 

short-term initiative.”19 Such cautions are realistic, 

understandable, and well-taken. But it is important 

that this undertaking not become yet another 

extensive study that results in business as usual. As 

the Government’s HRM leader, OPM needs to 

guard against that outcome. Given that the comprehensive pay study of the late 1980s actually 

prompted pay legislation and still was not successful in reforming the federal compensation system, 

passage of legislation and enactment of systematic 

changes in the compensation system will be a real 

challenge for OPM.

Staffing Issues. Setting the Federal Government’s 

staffing policy and leading its staffing programs are 

among the most important and difficult of OPM’s 

missions, and they are ones in which the balance 

among agencies’ need for flexibility, the pressures of 

public policy objectives, and the desire to accommodate OPM’s various constituencies sometimes 

seem to be at odds. In many cases, of course, OPM 

cannot act unilaterally to correct problems because 

they have arisen as a result of public law, and must 

be changed through legislative action. Legislative 

proposals, in turn, must have the approval of various parties, including the Office of Management 

and Budget. Given that OPM is the Government’s 

HR expert, however, OMB and other public policymakers should give deference to OPM’s advice 

and recommendations when management of the 

Federal workforce is at issue. And OPM can and 

should forcefully employ its influence as the leader 

17 “OPM Creates Compensation Service with Vision for 21st Century,” U.S. Office of Personnel Management news release, September 17, 1997.

18 “OPM to Look at Reinventing Federal Pay,” Federal Section News, IPMA Federal Section, May 1999.

19 Keynote address to the Classification and Compensation Society by Janice Lachance, Washington, DC, December 8, 1998.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 11

of the civil service to help bring about legislative 

and other needed changes in civil service laws and 

policies.

It is in the staffing area and, in particular, on issues 

related to how the Government hires new employees that we find several examples of policies or practices that either conflict with or detract from a 

merit-based employment system. Further, some of 

these policies and practices were identified as nonmeritorious, out-dated, or problematic many years 

ago but they still exist. For example:

• The Government’s Rule of Three20 has long outlived any usefulness it may have once had, and 

OPM has in some situations endorsed departures from the rule (e.g., through demonstration 

projects that permit agencies to use other alternatives in ranking candidates). A number of state 

government merit systems that had originally 

followed the Federal example years ago in adopting a rule of three have since dropped or modified that rule. Federal managers have complained 

for years about the rule and the lack of flexibility 

it represents. MSPB first recommended in 1994 

that OPM propose legislation to modify or 

change the statutory requirement. Yet the basic 

law, established over 100 years ago, still exists in 

the Federal Government.

It is unclear why OPM has been so slow to propose changes in this regard. We do know that 

some military veterans—one of OPM’s constituency groups—perceive application of the Rule 

of Three as an essential part of the process of 

granting veterans preference and have opposed 

suggestions that the statute be changed. We also 

know, however, that there are alternative methods of ensuring that veterans are provided with 

their legal entitlement to preference in hiring 

that are as effective and perhaps more effective 

than the Rule of Three. Not proposing a change 

allowed OPM to avoid having to respond to the 

opposition of one or more groups. But such 

inaction has perpetuated an outdated procedure 

which, if eliminated (or even revised to permit 

consideration of more than three candidates), 

would give selecting officials much-needed flexibility in hiring decisions while still fulfilling the 

public’s promises to those who have served and 

sacrificed for the nation.21

OPM has not led the way in allaying the fears of 

veterans about the consequences of eliminating 

the Rule of Three. Because this remains a problem for Government managers, however, there 

have been individual agency initiatives to do 

something about it. A demonstration project, 

now made permanent in the bureaus of the 

Department of Agriculture where it was tested, 

uses categorical rankings with absolute veterans 

preference applied within each category. The 

Department of Defense has proposed similar 

changes to streamline its staffing procedures, and 

wants to submit this and other personnel 

reforms to Congress for approval. And finally, 

managerial flexibility legislation recently introduced in the Senate, and supported by OPM, 

includes a provision for category rating systems.22

• Appointment authorities that do not require the 

use of merit-based competition obviously should 

be used sparingly in a merit-based civil service 

20 This rule comes into play when personnel offices provide a list of qualified applicants—in order of their numerical scores—to selecting officials for their consideration in filling vacancies. The selecting official must choose from among the top three interested, available candidates. Unfortunately, the assessment tools 

most frequently used to evaluate applicants are not very good at making the fine distinctions among candidates that would justify limiting consideration to just 

the top three candidates referred. MSPB reports “The Rule of Three in Federal Hiring: Boon or Bane?”(1995), “Entering Professional Positions in the Federal 

Government” (1994), and “The Role of Delegated Examining Units: Hiring New Employees in a Decentralized Civil Service” (1999), provide more detailed 

discussions of the Rule of Three.

21 In fact, veterans are very well represented in the Federal workforce. According to data published in OPM’s 1999 edition of The Factbook, Federal Civilian 

Workforce Statistics (page 32), more than one in every four Federal executive branch employees are veterans.

22 This legislation, S. 1612, was introduced by Senator Fred Thompson on November 1, 2001. Category ranking provisions are also included in the Federal 

Human Capital Act of 2001 which was introduced as S. 1603 by Senator George Voinovich on October 31, 2001.
12 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

system. There are several widely supported special hiring programs that operate as exceptions to 

competitive procedures to meet public policy 

goals, e.g., programs to increase employment 

opportunities for the disabled and veterans. 

However, OPM has also continued to support 

the use of two non-competitive entry level hiring 

programs in which veterans are not afforded hiring preference. The two programs in question 

(the Outstanding Scholar and the Bilingual/

Bicultural hiring authorities) exist under the 20-

year old Luevano consent decree. When reviewing the use of these hiring methods for over one 

hundred different professional and administrative occupations, the Board has noted that fewer 

veterans are hired under these programs than 

under competitive hiring methods.23

Further, the individuals who are supposed to be 

the beneficiaries of these programs (African 

Americans and Hispanics) are just as likely, if not 

more likely, to be hired for entry level jobs 

through competitive, merit-based hiring programs.24 Additionally, OPM’s own oversight 

reviews have found numerous instances in which 

Federal departments and agencies have misused 

these non-competitive hiring authorities. In a 

January 2000 report that detailed some of the 

unintended consequences associated with these 

two programs, MSPB recommended to the 

Department of Justice that it petition the court 

for termination of the consent decree. OPM disagreed with that recommendation, and the Government has not, to date, taken action to end the 

consent decree.

These non-competitive hiring authorities, however, do have some vocal supporters. The supporters are primarily Federal managers who find 

the noncompetitive programs quick and easy to 

use and advocates who believe the non-competitive authorities would be more effective than 

competitive hiring in increasing minority 

representation—despite experience that indicates just the opposite. And, to date, OPM has 

actively supported the continuation of these two 

exceptions to competitive hiring even though 

they account for fewer Black and Hispanic 

entry-level hires than competitive programs, and 

veterans do not fare as well as nonveterans under 

these programs. 

This situation is illustrative of the difficulties 

OPM faces in trying to promote a system based 

on merit while at the same time trying to accommodate the perceptions of all its constituencies 

including those who may advocate a non-merit 

based approach in order to achieve a particular 

objective. Further complicating matters, as in 

this case, is the fact that perceptions sometimes 

can be mistaken. For example, there is no need 

to choose between merit-based hiring methods 

and procedures that promote workforce diversity. Merit-based methods can and do promote 

diversity, as our research has demonstrated.25

• As the Government’s premier test developer, 

OPM is in an ideal position to demonstrate leadership by acting as a champion for the development and use of the best assessment tools 

possible. However, it has not always done so. 

Nor has OPM served as an adequate resource for 

agencies seeking to improve their candidate 

assessment strategies—except on a reimbursable 

basis (which renders such improvements unfeasible for many resource-strapped agencies). Even 

for the one occupation for which it still has 

responsibility to examine centrally, OPM has 

not implemented the assessment process in a 

23 U.S. Merit Systems Protection Board, “Restoring Merit to Federal Hiring: Why Two Special Hiring Programs Should be Ended,” Janua ry 2000, pp. 19-20.

24 Ibid., pp. 10-11.

25 Ibid, pp. 7-9.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 13

manner that ensures the selection of the best 

candidates.26

To its credit, OPM has devoted many resources 

over the years to the development of assessment 

tools to assist agencies in achieving a high quality 

workforce, and test development has been an 

important feature of those efforts. The Administrative Careers With America (ACWA) test of 

cognitive ability is one example, as are tests 

developed by individual agencies—often with 

assistance from OPM—for specific careers or 

occupations, such as law enforcement.27 However, the use of testing—cognitive testing in 

particular—is not popular among many agencies, and not because the tests are not valid. 

Rather, using tests can lengthen the recruitment 

and placement process, which many managers 

view as already too time-consuming. In addition, 

some tests have a disparate impact on minorities, 

and the process of validating a test as job-related 

and defending it successfully in the event of a 

legal challenge is an understandable concern of 

agencies. Nonetheless, aside from an actual trial 

period for candidates (Cooperative Education 

Programs are one way to do this), one of the best 

ways to predict future job performance is 

through the use of written tests, especially when 

used in conjunction with other applicant screening devices such as structured interviews.

For the most part, instead of actively encouraging agencies to develop and use the best assessment strategies possible for the jobs they fill, 

OPM appears to be content with allowing each 

Federal department and agency to develop its 

own approach to employee selection. While we 

believe agencies should be allowed to tailor their 

selection systems to meet their needs, OPM has 

a role to play in impressing upon agencies the 

consequences of failure to conduct adequate candidate assessments. As we have noted in previous 

Board studies, there is sometimes a trade-off 

between filling jobs quickly and filling jobs with 

the best possible candidates.28 But when OPM 

continues to support special hiring programs 

that may involve little or no systematic assessment of candidate qualifications or job-related 

competencies, it is, in essence, sanctioning quick 

and easy hiring over a merit-based assessment 

process designed to hire the best-qualified candidates. The fact that hiring using these non-competitive hiring authorities can be accomplished 

quickly because they do not require extensive 

screening and assessment of applicants may deter 

agencies from finding ways to do better assessments. While most managers want to hire the 

best available job applicant, they may be limited 

in their ability to do that if they are not given 

assistance in the development and use of good 

applicant assessment tools and an understanding 

of the limitations inherent in the tools currently 

available to them. In our view it is OPM’s role to 

both promote the use of the best possible candidate evaluation tools and to assist in their development.

Final thoughts

In looking back over the last twenty years, and 

focusing especially on the last ten, it’s clear that 

OPM is to be commended for its diligence, innovation, and commitment to many civil service 

improvements. It’s important to remember that fact 

26 As detailed in Azdell v. Office of Personnel Management, 87 M.S.P.R. 133 (2000), reconsideration denied (July 13, 2001), the Board found that OPM failed to 

give proper weight to the results of assessment tools used in the Government’s program for hiring administrative law judges. In commenting on OPM’s use of a 

scoring formula for the various elements of its examination procedure for ALJ positions, the Board observed that “the scoring formula violated [regulations governing employment practices] because it was not rationally related to performance in an ALJ position.” Thus, it is not enough that the individual elements of the 

examination are related to successful performance in an ALJ position; the way in which the scores in those elements are combined to result in a list of qualified 

candidates must also be done fairly and “according to professionally accepted examination development and validation procedures.”

27 The ACWA test is a written examination that covers six broad occupational groupings, each with its own scoring key. The ACWA, along with a self-rating 

schedule (also called ACWA), recently became available for agencies to administer through their delegated examining units.

28 The June 1998 MSPB Perspectives report, “Federal Supervisors and Strategic Human Resources Management,” provides a discussion of this issue.
14 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

when considering areas in which we have found 

weaknesses or raised questions. And it is important 

to note that the identified deficiencies should not 

detract from the agency’s significant accomplishments over the years. OPM is responsible for having initiated or refined a number of programs over 

the past decade that have been supportive of merit 

system health (e.g., the oversight program), helpful 

to employees (e.g., benefits programs, familyfriendly policies and regulations), useful to Federal 

supervisors (e.g., guidance on dealing with poor 

performers); and supportive of the goals of the 

CSRA (e.g., delegation of authorities and effective 

diversity programs). But much remains to be done 

in areas that agencies have perennially identified as 

needing improvement, such as compensation and 

staffing policies and practices.

In considering these issues, it is important to recognize some underlying circumstances that contribute to the real and perceived deficiencies that we 

have discussed. First, lack of resources is a chronic 

problem. A massive program overhaul, such as is 

needed by the Federal compensation system, 

requires considerable resources to design and 

implement. Resources at the agency level also have 

an effect on how satisfied agencies are with OPM’s 

work. Agencies with adequate HR staffs and 

resources may prefer to develop their own systems 

and approaches to meeting HR needs, and may 

even resent OPM’s involvement in their operations. 

Agencies without such resources, however, are frustrated by the lack of assistance they receive from 

OPM, or the price tag on the help that is available.

There also may be a temptation to allocate scarce 

resources to projects in which the objectives are 

more easily achieved, and to leave the bigger, more 

problematic undertakings for another time when 

budgets aren’t so lean. That may be shortsighted, 

because it allows the big problems to get bigger and 

ultimately more expensive to solve. A real commitment of budget and staff resources may be necessary to finally accomplish goals such as 

compensation reform or other legislative objectives. 

And years of study, followed by months of composing legislative proposals, followed by multiple 

rounds of revisions and approvals may not be a luxury the 21st century will allow policymakers who 

really want to make a difference. Issues as important as some of the staffing and compensation matters that we’ve raised here should not, of course, be 

dispensed with impulsively. But there’s probably little danger of that. More of a danger, perhaps, is the 

possibility that even as observations are being made 

about how quickly the workplace is changing, the 

organizations responsible for responding to those 

changes will proceed at the same stately pace that 

has characterized Government bureaucracy for a 

century. Such a slow response may not be something the Government can afford if it is to meet 

today’s human capital challenges.

Finally, and perhaps most compelling, is the fact 

that the law has given OPM a dual role:

1. OPM is to be a fair and impartial leader of the 

Federal civil service by “executing, administering, and enforcing the civil service rules and regulations . . . ; and maintaining “an oversight 

program to ensure that activities under any [delegated] authority . . . are in accordance with the 

merit system principles . . . .”

2. OPM, by virtue of its structure and charter, is 

also to be an advocate of administration policies 

(with all the responsiveness and enlightened partisanship that that implies) by “aiding the President, as the President may request, in preparing 

such civil service rules as the President prescribes, and otherwise advising the President on 

actions which may be taken to promote an efficient civil service and a systematic application of 

the merit system principles.”

Observers who criticize OPM for making decisions 

that are “too political” sometimes fail to appreciate 

this fact. OPM must balance its roles, making decisions that are in the best interests of Federal human 

resources and the merit system, while at the same 

time, doing what is consistent with the administration’s plans for the civil service. We are always 

hopeful that what is in the best interest of a merit-
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 15

based civil service aligns with an administration’s 

vision for Federal human resources management. 

Realistically, however, the two will occasionally 

conflict when goals and ideals are translated into 

programs and policies. When this happens, OPM 

faces its most thorny challenges and toughest decisions. We believe that OPM has done fairly well at 

achieving this balance. However, to solve the serious problems that still exist in the civil service system, successive administrations and the OPM 

leaders they appoint will need to commit and recommit to finding ways to achieve their objectives 

while also seeking the best interests of a meritbased public service.

General recommendations

1. OPM should be especially circumspect when OPM should be especially circumspect when OPM should be especially circumspect when 

balancing the long-term interests of the civil balancing the long-term interests of the civil 

service with short-term political objectives. service with short-term political objectives. The service with short-term political objectives.

expectation that OPM will be responsive to the 

goals of the administration and also an advocate 

for long-range, strategic human resources management is a special challenge. And that challenge is matched by the burden of trying to 

balance the needs and desires of the various 

groups that have a stake in OPM’s decisions. In 

pursuing that balance, of course, OPM cannot 

always satisfy all of its constituencies. Trying to 

do so can have the unhappy consequence of a 

lack of progress, since maintaining the status quo 

may often be the least controversial option. 

There may be times when the best course of 

action for a merit-based civil service is an unpopular one. It is at those times that it should be 

demonstrably clear that OPM’s decisions are 

guided by the merit system principles and the 

long-term health of the civil service.

2. If inadequate resources are standing in the 

way of OPM’s providing the level of leadership and assistance that Federal agencies need 

and want, then the drastic shrinkage of OPM 

resources that has taken place over the past 

ten years needs to be reexamined. Cutting 

OPM resources so drastically may have satisfied 

the short-term goal of reducing the size of its 

workforce. But weakening OPM’s ability to 

tackle some of the Government’s persistent personnel problems (while Federal HR staffs in 

many agencies were also being pared dramatically) surely does not bode well for the future 

health of the Federal civil service system. Even 

though many of the OPM staff reductions 

reflect the agency’s elimination of in-house 

investigations and training operations, OPM 

still appears to have been left with insufficient 

staff in other areas to meet agency needs. While 

OPM can and does seek reimbursement for 

some of its services, that does little for Federal 

agencies that have not been allocated sufficient 

resources to pay for those services. In some cases, 

such as development of valid and predictive 

employee assessment and selection tools, it may 

make more sense to fund these activities on a 

centralized basis through OPM. Recent increases 

in resources allocated to OPM are an encouraging sign as long as at least some of the additional 

people and/or funds are devoted to the more 

persistent, long-standing problems facing Federal human resources management.

3. OPM must not only respond to changes in 

the Federal workforce and workplace, but 

also must actively influence their evolution. 

The nature of work, the workplace, and workers 

themselves are drastically different from what 

they were in the mid-twentieth century. Some of 

the traditional approaches to Federal human 

resources are no longer effective. Some Federal 

agencies, faced with these challenges, are taking 

matters into their own hands by seeking congressional action to enable them to develop specific 

human resources programs or practices that are 

not available under title 5 of the U.S. Code. 

OPM needs to help manage this evolution by 

anticipating the legitimate HR program and policy needs of the various departments and agencies and promoting broad-based regulatory or 

statutory changes where feasible. Each Federal 

department and agency needs to be able to tailor 
16 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

its HR policies and practices to unique needs 

and circumstances but they should be able to do 

so within a common statutory framework and a 

shared set of merit principles. To do otherwise 

threatens to balkanize the Federal workforce.

4. Not only should OPM be “at the table” with 

OMB and others in setting Federal HR policy 

and determining related budget priorities, but 

policymakers should give deference to OPM’s 

views when management of human capital is 

at issue. OPM needs to be more than just a 

presence in high level discussions about the Federal workforce. It must be an active participant 

in decisionmaking regarding HR policies and 

programs. Top Federal policymakers should take 

full advantage of the wealth of experience, professionalism, and wisdom about Federal human 

resources that OPM brings to the process by 

paying special heed to OPM’s advice on decisions affecting Federal workers and the Federal 

workplace.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 17

OPM Response

The U.S. Office of Personnel Management was 

given an opportunity to review a draft of this 

report, and made a number of useful suggestions to 

clarify and update the information presented. In 

addition, in her response to the report, OPM 

Director Kay Coles James indicated agreement that 

OPM faces challenges in balancing its dual roles 

(administration advocate and merit systems protector). Director James expressed both OPM’s devotion to the merit system and its commitment to 

assuring that OPM’s policies and programs are 

responsive to today’s needs.

The Board appreciates the clarifications and 

updates OPM has provided and we have incorporated these suggestions into the report. We have, in 

addition, revised language in our discussion of the 

Federal Government’s classification system, to 

make it clear that it is the law (chapter 51 of title 5, 

U.S. Code) that remains the basis for the classification system. Without legislative change, then, constraints will remain on the way workers are 

compensated. Both OPM and the Board agree that 

this is an area that needs to be reconsidered in the 

light of the dramatic changes in the nature of work.

We have also revised our report to reflect up-todate information in the areas of oversight, measurement and accountability, and investigations.

Director James’s letter is reproduced at appendix 3.

A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 19

Appendix 1 — Background

Origins of Today’s Civil Service

During the latter part of the 19th century, after 

years of operating under an entrenched spoils system, the Nation’s civil service was ripe for major 

reform. In 1883, reform efforts culminated in the 

passage of the Pendleton Act, which created the 

bipartisan U.S. Civil Service Commission. The act 

emphasized the need for competitive examinations 

as a criterion for entering the Federal civil service 

and gave the Civil Service Commission responsibility for ensuring that the examination program was 

fair and impartial. The Commission was charged 

with establishing rules to implement the Pendleton 

Act, and with investigating violations of those 

rules. Initially, only ten percent of the civil service 

came under the jurisdiction of the Civil Service 

Commission, with the remaining 90 percent subject to patronage appointments and removals.29

Opponents of patronage continued to push for 

expansion of the merit system over the several 

decades that followed passage of the Pendleton Act. 

By the early 1900’s, almost two-thirds of the Federal workforce was covered by the merit system, 

and during his two terms as President, Theodore 

Roosevelt centralized and strengthened the Civil 

Service Commission’s management role. The 

emphasis at that time was on hiring based on merit, 

and those years also saw hiring-related changes 

such as the modification of the procedures for 

training test examiners and registering applicants.30

Gradually, however, policymakers began to realize 

that focusing on employee selection was not 

enough to ensure the overall efficient and effective 

operation of the civil service. Other personnel 

functions such as job classification, pay, training, 

promotions, and retirement programs were also 

critical to sound operations. Consequently, Civil 

Service Commission responsibilities began to 

expand into areas of human resources in addition 

to hiring.

Civil Service Growth Leads to 

Need for Reform

Carrying out these growing responsibilities 

required systems and procedures that were up to 

the task of ensuring that the merit system was not 

being compromised. But as the Federal workforce 

grew over the years, the complexities of the systems 

and procedures also grew. Invariably, this growth 

led to delays and inefficiencies in the operation of 

the personnel management system, so much so that 

by the 1970s, the system was characterized by President Carter as “a bureaucratic maze which neglects 

merit, tolerates poor performance, permits abuse of 

legitimate employee rights, and mires every personnel action in red tape, delay, and confusion.”31

29 Hayes, Stephen W. and Reeves, T. Zane, “Personnel Management in the Public Sector,” Boston: Allyn and Bacon, Inc., 1984, p. 17.

30 Ibid., p. 19.

31 Op. cit. “U.S. Office of Personnel Management and the Merit System: A Retrospective Assessment,” p. 1.
20 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

To address these deficiencies, Congress passed the 

1978 Civil Service Reform Act (CSRA), viewed as 

the first comprehensive reform effort since the 

Pendleton Act of 1883. The legislation eliminated 

the bipartisan Civil Service Commission, and created the Office of Personnel Management, which 

was intended to be the administration’s voice on 

personnel matters as well as the Government’s 

leader in Federal personnel management. Changing 

the Government’s central personnel agency from a 

bipartisan organization to an agent of the President 

was seen as a way to stimulate reform of the Federal 

civil service by putting personnel policymaking 

into the hands of appointees who would be more 

responsive to the administration and its personnel 

management goals than the Commission was likely 

to be, given its divided responsibility and accountability. OPM was to ensure that Federal personnel 

management programs and systems enabled the 

Government to serve the public effectively, while at 

the same time preserving and protecting the merit 

system. The CSRA called for OPM to:

• As it deemed appropriate, delegate personnel 

management authorities (including authority for 

competitive examinations) to Federal agencies.

• Operate an oversight program—including gathering and analyzing data on the civil service—to 

ensure use of Federal personnel authorities consistent with the merit system principles.

• Lead the Federal civil service system by administering and enforcing civil service laws, rules, and 

regulations. Exhibit leadership through active 

improvement efforts in critical personnel management areas, including:

◆ Research and demonstration projects to 

develop more effective or efficient methods of 

human resources management;

◆ Recruitment and retention of highly qualified 

employees;

◆ Performance management; and

◆ Equal employment opportunity.32

In eliminating the bipartisan Civil Service Commission and creating the new Office of Personnel 

Management as an advocate of administration policies, the CSRA also created the Merit Systems Protection Board which retains the critical element of 

independence in the oversight of the civil service 

and the merit systems. The Board is required by 

statute to provide the President and Congress an 

analysis of whether the actions of OPM are in 

accord with merit system principles and free from 

prohibited personnel practices.33 Thus, in compliance with its own statutory responsibilities, the 

Board undertook a review after OPM’s first 10 

years of operating under the CSRA and has again, 

after a second decade, looked at OPM’s continuing 

efforts to fulfill the Reform Act’s requirements in 

the very different environment of the 1990s.

MSPB’s Current Review of OPM—

Methods and Sources of Information

The current study emphasizes OPM performance 

since the Board’s 1989 OPM retrospective report. 

To conduct the assessment, we relied on numerous 

sources of information. First, we met with OPM 

officials, including directors of the various functional areas, who provided data, information, and 

insights into the missions, goals, and operations of 

their organizations. We were particularly interested 

in hearing how these individuals saw their programs’ performance in light of the goals established 

for the agency as well as the changes that the organization (and the entire Federal civil service) have 

been undergoing in the last decade.

We also wanted to hear the opinions of some of 

OPM’s customers about the service they receive 

from OPM. OPM shared with us data from customer satisfaction surveys that they administered in 

1998, including the views of 43 HR directors and 

32 Ibid., p. 3.

33 5 U.S.C §§1204 and 1206.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 21

1,336 HR specialists. We incorporated these data 

into our findings, but we also administered our 

own interrogatory surveys to HR directors of the 

largest Federal departments and agencies (as well as 

a sample of the smaller Federal agencies). These 

interrogatories were designed to elicit experiences 

and opinions about some of the significant OPM 

activities over the last decade in the various Federal 

HR functions. (A copy of the interrogatory survey 

and list of agencies returning the survey can be 

found in appendix 2.) Finally, we supplemented 

our information with the findings from prior 

MSPB reports concerning the significant activities 

of OPM, and with information obtained from a literature search targeting OPM’s activities over the 

last twenty years.

Second Decade Marked by Major 

Change

The Federal human resources landscape has seen 

enormous changes during the last decade, some of 

the most significant occurring from 1993 to 1995, 

when the National Performance Review studied 

Federal programs in an attempt to find ways to 

make Government operations more efficient and 

cost effective. The NPR called for “maximum 

deregulation and delegation, trust, accountability 

for results, decentralization, and entrepreneurial 

behavior” and called upon OPM and agency HR 

operatives to become consultants, “providing 

expert advice and assistance, not acting as an obstacle to progress.”34 NPR recommended that to better address its customers’ needs, OPM should alter 

not only the role it had played since the passage of 

the CSRA, but also its structure and internal culture.

Following NPR’s recommendations, a number of 

significant changes within OPM occurred. Most 

notably, the staff was restructured and 

streamlined—by 1996 the staff had shrunk by 43 

percent. Likewise, there was a significant decrease 

in OPM’s budget (19 percent) from 1993 to 1996. 

OPM also began to cultivate partnerships (and better relationships) with Federal agencies. Because so 

many agencies were facing budget and staff cuts, 

OPM promoted career transition services within 

agencies to help displaced Federal workers find new 

jobs. During this time OPM delegated virtually all 

examining to agencies, and began charging fees for 

the examining services that agencies needed. OPM 

also began developing tests for agencies on a 100 

percent reimbursable basis and initiated other 

“entrepreneurial” activities in its employment services area. Likewise, in the oversight function, evaluators were actively encouraged to identify 

opportunities to perform reimbursable work for the 

agencies they oversaw. (This practice, however was 

stopped and oversight and evaluation now remains 

an appropriated fund activity supported by OPM’s 

congressionally approved budget rather than by 

fees collected from the agencies.) Other significant 

changes during that period included the “privatization” of the training and investigations functions. 

In addition, during this time OPM became a vocal 

proponent for automation in Federal human 

resources management. The overall result was a 

very different OPM than had existed before 1993.

In passing the CSRA, Congress had signaled its 

intention that OPM was to be a proactive central 

personnel management agency that would provide 

aggressive leadership, guidance, and oversight for 

the civil service system, a mandate that, at the time, 

was a departure from the Government’s traditional 

approach to human resources management. Similarly, the new entrepreneurial role called for by 

NPR in the nineties was a very different one for an 

agency that previously had functioned as a central 

management agency.35 And, according to at least 

one author, it was a surprising role for OPM, given 

the downsizing—and reduced capacity—that had 

been taking place in agency HR staffs all over the 

34 National Performance Review, “Office of Personnel Management, Accompanying Report of the National Performance Review,” September 1993, p. 1.

35 Gary S. Marshall, “Whither (or Wither) OPM?” Public Administration Review, May/June 1998, Vol. 58, No. 3.
22 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

Government.36 Because of this downsizing, as well 

as changes occurring in HR staff roles, a number of 

organizations including the General Accounting 

Office have argued for OPM to assume a leadership 

role in support of a stronger HR function that is 

more closely integrated into agencies’ strategic 

planning and mission accomplishment. However, 

with OPM staff cut by more than half (from 6,208 

employees in 1993 to only 2,984 in 1999), with 

many of its functions delegated to agency HR 

offices, and with other functions privatized, OPM’s 

current ability to fulfill that expectation is open to 

question.

Findings After 20 Years

The Board’s 1989 report on OPM’s accomplishments looked back over a decade of Board research 

and observations of OPM, and described considerable progress, as well as some dissatisfaction with 

the pace of reform. The Board also expressed concern over the significant cutbacks in funding and 

staff that had occurred during OPM’s first ten 

years, noting that a lack of resources could continue to present an obstacle to OPM’s effective fulfillment of the CSRA’s expectations. Thus, reform 

of civil service systems still was considered very 

much a work in progress a decade after the Reform 

Act, so it is fair, now, to revisit the issues that were 

important then, since they remain critical to the 

efficient and effective management of the civil service.

As in the case of OPM’s first ten years, the second 

decade of OPM’s actions and accomplishments can 

be examined in the context of the major expectations delineated by the Civil Service Reform Act, 

how well OPM has met those expectations, and 

whether events over the last decade have enabled 

OPM to realize some of those previously unfulfilled goals. In the material that follows, we present 

the Board’s view of OPM in that context, elaborating on some of the information presented in the 

body of this report.

Decentralizing Personnel Management 

Authority

Historically, decentralization has alternated with 

centralization as the favored method of administering personnel management authorities in the Federal sector. However, at the time the CSRA was 

passed, Congress and other policymakers believed 

that decentralization, with its more timely and flexible approach to personnel management, was the 

appropriate strategy for making the system more 

responsive to agencies’ needs and for combating 

some of the personnel system’s more onerous problems.37

Although many personnel authorities were open to 

delegation by OPM, the one considered most 

important was the authority to examine and hire 

individuals for the Federal workforce. The CSRA 

clearly intended to bring about significant changes 

in the way in which people were hired for Federal 

jobs. By giving agencies (and in turn agency managers) more direct control of personnel actions such 

as recruitment and selection, while still cautiously 

ensuring that the agencies given this authority protected the integrity of the merit system, it was felt 

that the red tape and delays that had plagued 

OPM’s predecessor—the Civil Service 

Commission—would be eliminated.

By the end its first ten years in operation, OPM 

had begun to make an active effort to increase the 

number and scope of the delegations. This progress 

continued until, by the mid 1990s, individual 

departments and agencies had “assumed the lion’s 

share of the responsibility for and control over the 

recruitment and examination of new employees in 

the hundreds and thousands of professional and 

administrative positions within the executive 

36 Ibid.

37 Op. Cit., “U.S. Office of Personnel Management and the Merit System: A Retrospective Assessment,” p. 8.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 23

branch.”38 The reinvention efforts initiated by the 

NPR provided a catalyst to hasten this decentralization of Federal human resources management, 

especially the hiring process. In addition to NPR 

recommendations, the administration spurred further delegations by significantly reducing the FY 

1996 budget recommended for the OPM unit 

responsible for competitive examining. The final 

OPM appropriation reflected that reduction.39

Finally, in January 1996, acting under the authority 

of Public Law 104-52, OPM delegated examining 

authority to Federal agencies for virtually all positions in the competitive civil service.40 Decentralizing Federal examining authority in this manner was 

a reflection of the long-standing desire of Congress 

and the administration to make the hiring process 

faster and less bureaucratic.

As a result, the work required to competitively hire 

new employees is now generally performed by 

agency personnel staffs working in the Government’s approximately 650 delegated examining 

units. The delegated examining units are run by 

agency personnel officials whom OPM has trained 

to operate a fair and lawful competitive process. 

Through DEUs, agencies determine how a job will 

be advertised, how the candidates will be assessed, 

and which candidates will be referred for job consideration. Agencies also decide whether their 

DEUs will perform each element of this process or 

contract out any or all parts of it. Thus, agencies 

and their DEUs have become key players in the 

process for bringing new hires into the competitive 

service.41 Candidate assessments are done through 

written tests or by a process, called unassembled 

examining, that generally relies on information 

about training and experience submitted in writing 

by candidates, usually supplemented by interviews. 

For most job vacancies, candidates are evaluated 

through unassembled examining.

By 1999—some 20 years after the enactment of 

CSRA—OPM had delegated to Federal agencies 

virtually all hiring authority. With the agencies 

now responsible for examining and hiring, OPM 

has assumed an entrepreneurial role, turning its 

attention to developing new techniques and instruments to assist agencies with their hiring responsibilities. OPM sells these techniques and devices but 

does not require agencies to purchase them. Agencies are free to develop their own hiring tools or to 

buy them from one another or from non-Governmental sources.

In light of OPM’s own downsizing, budget cuts, 

and restructuring, the transfer of examining 

responsibilities to the agencies relieved OPM of a 

considerable burden. But the agencies have also 

experienced significant changes in the budgetary 

and staffing levels over the last decade. As noted 

above, HR staffing levels throughout Federal agencies have decreased fairly dramatically—by 21 percent just between 1993 and 1997, with some 

agencies cutting as much as 40 percent. Because 

delegation of examining authority to the agencies 

occurred at the same time that the agencies experienced dramatic reductions in their own HR staffs, 

it is reasonable to be concerned about how well 

agencies are able to handle these new authorities 

when the expertise to support and guide their 

actions, which had formerly resided in their HRM 

offices, may no longer exist.

Early in the process of delegating these authorities, 

agencies seemed to be handling the task fairly well. 

The Board reported in 1994 that even as more and 

more authorities were delegated to agencies, there 

were no significant claims raised that the merit sys38 U.S. Merit Systems Protection Board, “Entering Professional Positions in the Federal Government,” Washington, DC, March 1994, p. xi-xii.

39 Op. cit. “The Role of Delegated Examining Units: Hiring New Employees in a Decentralized Civil Service,” p. 2.

40 The exceptions to this are administrative law judges positions and positions covered under the Luevano consent decree, i.e., GS grades 5-7 positions in professional and administrative occupations.

41 Op. cit., “The Role of Delegated Examining Units: Hiring New Employees in a Decentralized Civil Service,” p. 2.
24 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

tem was being undermined. Likewise, there 

appeared to be no significant decline in the quality 

of the Federal workforce, and the workforce was 

growing increasingly representative of the nation’s 

diversity.42 This was true in spite of the fact that, at 

about the same time as it was delegating these 

authorities to agencies, OPM was also eliminating 

the massive volumes of written guidance it had previously provided agencies concerning personnel 

actions such as hiring—the Federal Personnel 

Manual.

But now that they have been given authority for 

virtually all examining, do agencies still believe that 

the benefits outweigh the costs? And are agencies 

able to take advantage of the new products and services now offered by OPM, given the agencies’ own 

budgetary constraints? To answer these questions, 

we relied on findings from a Board report on delegated examining units, data from OPM’s customer 

satisfaction survey, and inquiries made in our interrogatory survey.

The Board report indicates that although agency 

officials, managers and supervisors are very positive 

about having these examining authorities delegated 

to them, they still have concerns about the process 

as it currently exists.43 Specifically, they are concerned about the quality of the assessment determinations made by their DEU’s in situations in which 

there is an extremely heavy workload. When this is 

the case, these officials and managers feel that DEU 

staffs have insufficient time to make appropriate 

judgments (especially when candidates submit 

information that’s inadequate to properly assess 

their applications) and insufficient staff resources 

to follow up with candidates to request additional 

information.

The managers and supervisors reported that they 

still experience many frustrations with the hiring 

process, although most of their complaints have 

nothing to do with the fact that the agency is doing 

the recruitment, assessment, and referral of candidates instead of OPM. Their complaints include 

concerns about the time it takes to get security 

clearances for individuals they wish to hire, budgetary constraints which result in hiring freezes, and a 

general lack of skills in determining which candidates referred to them would actually perform best 

in the job.

OPM’s customer satisfaction survey results show 

that 80 percent of the HR specialists polled are satisfied with the Delegated Examining Operations 

Handbook distributed by OPM. Similarly, 78 percent of the respondents reported satisfaction with 

the technical assistance they receive from OPM 

concerning their delegated examining unit (with 

only 8 percent being dissatisfied). The respondents 

to our interrogatory surveys were almost unanimous in saying that the delegation of examining 

authority has been beneficial in helping them fill 

their jobs. They report that the delegation of examining to the agencies has enabled them to fill positions in a more timely manner, as well as to do a 

better job of matching hiring needs with applicant 

skills. Some also reported that they are able to fill 

jobs more cost effectively than when they had to 

request candidate referrals from OPM. Several 

reported that they have been able to develop crediting plans that are better tailored to the jobs being 

filled because they have increased input in the form 

of subject matter expertise from the selecting officials. This has resulted in their clients being more 

satisfied with the process (especially since the clients often feel more comfortable dealing with 

agency staff rather than just receiving lists of eligibles from OPM), which in turn relieves some of the 

pressure that always exists for HRM staff when trying to fill jobs.

However, our interrogatories also revealed some 

lingering concerns about the issue of delegation (or 

lack of delegation) of these authorities. One 

42 Op. cit., “Entering Professional Positions in the Federal Government,” p. xii.

43 Op. cit. “The Role of Delegated Examining Units: Hiring New Employees in a Decentralized Civil Service,” p. 10.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 25

respondent expressed the view that the delegation 

of these authorities had occurred too swiftly for 

OPM to provide agencies with good tools for handling the delegations. A few mentioned that they 

did not like having to pay for the assessment and 

referral services they received from OPM, and felt 

that there should be caps on the examining services 

they contracted for. Some mentioned that they felt 

they should be able to examine for ACWA positions (i.e., positions covered under the Luevano 

consent decree, for which only OPM is authorized 

to examine candidates) because they don’t believe 

the quality of the candidates referred by OPM 

makes it worth what it costs them to have OPM 

assess and refer those candidates. (OPM addressed 

this issue in November 2000 by delegating to agencies authority to administer the examination it uses 

to examine for these positions.) And many still 

complain that the elimination of guidance (such as 

the FPM) and attempts to streamline Federal hiring have failed to solve some of the problems they 

see with the staffing process. Finally—and not 

surprisingly—they believe that some of the laws 

and regulations governing the staffing process (such 

as those concerning veterans’ preference, the Rule 

of Three, and the Career Transition Assistance Program44) make the system unnecessarily complex 

and difficult to work with, and inhibit them from 

hiring the best qualified people for the job.

In summary, OPM has succeeded in delegating 

examining authority as was envisioned by the framers of the Civil Service Reform Act. However, this 

delegation of examining authority has not eliminated many of the complaints that agencies have 

voiced about the bureaucratic nature of the process. 

This is partially due to the severe decreases that 

agencies have seen in their own HR budgets and 

staffs. Perhaps even more relevant to these complaints, however, are the many rules and regulations 

that still control how selections are made. Many of 

these rules make sense from the standpoint of social 

needs or public policy and tradition, but aren’t necessarily consistent with the best interests of the 

merit system. Further, there are HR requirements, 

procedures, and activities that represent inefficient, 

ineffective, or antiquated ways of doing things. 

Considering whether such things are worth doing 

should be a factor in the decision about whether 

they’re worth delegating.

Overseeing the System

Oversight of Federal human resources management 

is a core mission of the Office of Personnel Management. The original purpose of the program was 

to ensure that organizations exercising delegations 

of personnel authority complied with the laws, regulations, public policies, and procedures that gave 

structure to the civil service. With the passage of 

time, the program took on an additional responsibility: measuring how well Federal organizations 

managed their human resources.

In 1969 the program was highlighted when a Presidential memorandum prescribed that agencies 

would have a role in evaluating personnel management practices and ensuring compliance with personnel laws and regulations that complemented the 

role of OPM’s predecessor, the Civil Service Commission. Throughout the 1970s, the program 

underwent incremental changes as it sought to 

define the respective roles of the Commission and 

agencies and to determine the appropriate weight 

to give to enforcing compliance versus encouraging 

good personnel management practices.

The CSRA institutionalized decentralization and 

delegation of personnel authority and concurrently 

made the director of OPM accountable for compliance with civil service laws and regulations. It also 

codified the civil service’s underlying values into 

the merit system principles and made agency heads 

and their subordinate supervisors accountable for 

exercising their personnel authority in conformance with the merit system principles and applica44 This program requires that before other candidates may be considered for vacancies, consideration be given to well qualified Federal employees displaced 

from their jobs by downsizing or reorganization.
26 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

ble laws, regulations, and public policies. This both 

reaffirmed that oversight is a core mission of OPM 

and that agencies share in the accountability for 

carrying out proper oversight of HRM.

In the past, MSPB has expressed concern that 

under OPM’s stewardship this program has not 

always served its goals well. Especially during the 

first 10 years, the program veered away from a 

focus on ensuring regulatory compliance and also 

lost steam in its efforts to strengthen agency internal oversight efforts. Meeting these goals became 

even more important with increased delegations of 

HR authority in the early 1990s, and also with the 

passage of the Government Performance and 

Results Act.

Now, looking back on OPM’s first 20 years of existence, we see that the oversight program has undergone significant revitalization. It is now closer to 

achieving the delicate balance between enforcement of the laws, regulations, public policies, and 

procedures that give structure to HRM and serving 

as advisor and change agent to managers who operate in an HRM environment marked by fewer constraints and greater managerial authority than ever 

before.

The changes in this program introduced since 1995 

are encouraging, suggesting that during its third 

decade OPM will be in a position to contribute 

even more to effective Federal HRM in a still 

decentralized environment.

Program status at the end of the first 10 years 

(1979-1989). In our 10-year retrospective published in June 1989, we observed that OPM’s oversight program was in a state of flux, but we 

concluded that the program was evolving “in an 

encouraging direction.” We made some other 

observations as well, most notably that OPM:

• Appeared to have “handed off” regulatory compliance to the agencies;

• Had initiated efforts to strengthen agency internal mechanisms for ensuring compliance with 

personnel laws, rules, and regulations;

• Had operated, during much of its first decade of 

existence, an oversight program that “lacked the 

capacity to uncover systemic problems or abuses 

in the larger interrelated network of Federal personnel management laws, regulations, programs, 

and procedures.”

We also noted, however, that between late 1987 

and early 1989 OPM initiated a “mid-course correction” to its oversight program and concluded 

that the “program continues to evolve in an 

encouraging way.”45

A period of further program adjustments (1989-

1994). In November 1992 the Board again 

reported on OPM’s oversight program, noting that 

“Since fiscal year 1990, OPM has been amending 

its PME [personnel management evaluation] program, changing its emphasis from aggregated statistical indicators to greater focus on individual 

Federal installations and on regulatory compliance.”46 We saw this re-emphasis on compliance 

and on individual Federal installation needs as a 

positive development. However, our report also 

suggested that OPM’s PME program should have 

been playing a more effective role in supporting the 

Federal human resources management program. 

Our analysis noted that Federal departments’ and 

agencies’ commitment to PME varied widely, and 

where commitment was lacking, managers tended 

not to see the linkage between PME and their 

efforts toward more effective mission accomplishment. We recommended that OPM work to provide or improve this linkage in Federal agencies.47

In our 1992 report we also addressed the OPM 

oversight program’s ability to focus on enhancing 

45 Op. cit., "U.S. Office of Personnel Management and the Merit System: A Retrospective Assessment," p. 21.

46 U.S. Merit Systems Protection Board, “Civil Service Evaluation: The Role of the U.S. Office of Personnel Management,” Washington DC, November 1992, 

p. v.

47 Ibid., p. iv-vi.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 27

the merit system principles and helping managers 

identify and solve their human resources problems.48 We noted that the program had improved 

since our 1989 review, with most of that improvement occurring in the vital arena of regulatory 

compliance, and concluded that “OPM’s own evaluations are probably doing all that can reasonably 

be expected in terms of ensuring compliance with 

specific regulations and standards.”49 With respect 

to making the PME program acceptable as a tool 

that enhances agencies’ human resources management programs in a way that meets managers’ 

needs, we observed that OPM faced a number of 

challenges. We perceived that one key to meeting 

those challenges was for OPM “to communicate 

with and lead the agencies more effectively in providing innovation in human resources management.” To achieve this outcome, we recommended 

greater efforts to strengthen existing agency PME 

programs and renewed efforts to encourage development of such programs in agencies where they 

were nonexistent.

In 1992 the organizational placement of the oversight function within OPM was a weakening factor. The function’s top executive reported to an 

associate director who also was responsible for a 

number of other high-profile programs, including 

systems innovation and simplification, position 

classification, labor relations and workforce performance, and compensation policy. This diversity of 

programs diluted the attention the associate director could give to oversight issues. Attainment of a 

single oversight program philosophy and approach 

was also hampered by OPM’s regional structure, 

since the oversight staff in each region reported to 

its regional director, although program guidance 

came for the central office assistant director. Each 

region’s program implementation bore the stamp of 

its regional director.

Following our 1992 report, OPM’s PME managers 

undertook initiatives to encourage agencies to revitalize or develop their internal personnel management evaluation programs. They also developed 

and tested a training module intended to heighten 

managers’ awareness of the statutory merit system 

principles. However, these efforts were hampered 

by the relatively low level of support provided by 

upper OPM management, including the director. 

Their efforts also coincided with administration 

and congressional initiatives aimed at human 

resources decentralization, delegation, and downsizing. Conditions were not ripe for positive outcomes, and in general the effort expended during 

the years 1992 through 1994 yielded little 

improvement in the program’s image or outcomes.

An era of total change (1995 to present). In 1995 

OPM took a number of steps to revitalize the oversight program. The biggest was execution of an 

internal OPM reorganization that placed the oversight function in an organization directly under a 

new associate director for merit systems oversight 

and effectiveness (O&E) whose sole responsibility 

was (and remains) to:

• Protect and promote a merit-based Federal civil 

service;

• Identify opportunities for improving Federal 

personnel policies and programs; and

• Help agencies meet mission goals through effective recruitment, development, and utilization of 

employees.50

The reorganization also abolished OPM’s regions, 

changing the former regional PME staffs into field 

divisions of the new oversight organization. The 

director of OPM has ensured that the oversight 

program is fully funded through appropriated 

funds, despite the fact that much of OPM’s business is now carried out on a cost-reimbursement 

48 Ibid., p. 1.

49 Ibid., p. 21.

50 U.S. Merit Systems Protection Board, “Civil Service Evaluation: The Evolving Role of the U.S. Office of Personnel Management,” Washington DC, July 

1998, p. v.
28 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

basis. In addition, the term “personnel management evaluation” was dropped in favor of “oversight,” reinforcing the break with the program’s 

past.

The changes made were more than structural, however. The key changes in the program’s substance 

were:

1. Focus: The current program has a strong focus 

on the statutory merit system principles, and 

attempts to place all review activity and all 

reported findings within the context of one or 

more of these principles. Although this has not 

always proven an easy task (because not every 

aspect of human resources management is easily 

associated with a specific merit system principle), this effort represents a way to raise the consciousness of agency HR officials and line 

managers with respect to the existence and 

importance of the merit system principles.

The oversight program faces other challenges not 

totally within its control as it attempts to shift its 

focus. First, the program must ensure that 

achieving results and complying with regulations 

and procedural requirements are given the same 

importance. This shift in focus is spurred in 

large measure by recommendations made by the 

NPR, and more recently by the mandate to 

focus on results established by the Government 

Performance and Results Act. Perhaps the biggest challenges to this effort are the difficulty in 

developing standards against which to measure 

HRM results, and the fact that, in the HR field, 

there are times when process is critical to ensuring a fair result. Thus, the oversight program 

must find a proper balance between examining 

for process compliance and reviewing on the 

basis of results.

Another challenge in establishing program focus 

is how to ensure that line managers are held 

accountable for the HRM decisions that they 

make. This has become especially important as 

HRM authority is increasingly delegated to line 

managers, and HR offices increasingly are shifting to the role of advisor rather than “doer.” This 

challenge is complicated by two trends: (a) disproportionately large reductions in the numbers 

of HR staff members in most agencies; and (b) 

the consolidation of HR staffs in many agencies 

into large HR centers often located great distances from the managers and employees they 

serve. Currently, within the Federal HR system, 

many personnel actions require an approving 

signature within an HR office before becoming 

final, although the authority to approve the 

action may effectively rest with a line manager 

who is organizationally and geographically distant. This structural anachronism—dating to an 

earlier time when personnel office control over 

HRM decisions was considered critical to 

upholding merit—creates an illusion of HR 

office control and accountability for decisions 

that really belong to line managers. In light of 

the current environment’s emphasis on managerial control and accountability, this is an issue 

that needs to be addressed.

2. Operations. The new program is structured to 

allow an assessment of HRM in each of the 23 

largest departments and independent agencies 

over a 4-year cycle. Previously, OPM’s goal was 

to review, on a 5-year cycle, every establishment 

with 100 or more employees. Under the current 

approach, all oversight work in a scheduled 

agency is completed in the year its review is 

begun, resulting in a comprehensive picture of 

the state of HRM throughout the agency and 

limiting the length of that inescapable period of 

intrusion by onsite review teams into an agency’s 

day-to-day work.

Other changes in operations are also evident. 

Each year an evaluation agenda is established for 

the purpose of gaining information about specific governmentwide programs and policies as 

well as information about the agencies being 

reviewed. Further, OPM invites each agency 

scheduled for review to identify issues of agency 

interest that the review will include. This 

approach gives the agencies an active stake in the 
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 29

conduct and outcome of the review. It usually 

results in a significant agency commitment of 

staff resources to the review team and helps 

improve communications between OPM and 

the agency.

Oversight reviews have identified areas in which 

better governmentwide policy direction, guidance, or interpretation is needed. When this 

occurs, the oversight staff has referred the issue, 

together with indicators of a problem, to the 

appropriate OPM program office for action. We 

have noted that such referrals have not always 

resulted in action by the OPM program office. 

This is an area where we have recommended 

closer attention by the OPM director.

Agency self-evaluation. As noted earlier, MSPB 

has expressed concern in the past about the 

unevenness of agencies’ self-evaluation efforts. 

Those concerns led us to recommend that OPM 

act to strengthen existing agency programs and 

renew efforts to encourage such programs in agencies where they were nonexistent. The creation of 

the Office of Merit Systems Effectiveness (a component of O&E) during OPM’s 1995 reorganization, allows OPM to provide leadership to agency 

self-assessment efforts. Together with a subcommittee of the Interagency Advisory Group (IAG) established for this purpose, the Office of Merit Systems 

Effectiveness has been instrumental in developing 

results-based measurement tools for the self-assessment of HRM, and in the development of model 

programs, systems, and procedures for applying the 

measures. The strength of this approach is that 

while OPM has been a catalyst for this effort, much 

of the work has been accomplished by agency participants, which has led to strong buy-in by a number of participating agencies. However, this 

approach has weaknesses, including the fact that 

participation is voluntary, so a number of agencies 

remain with little or no capability (or apparent 

interest) in conducting self-assessments of their 

HRM programs. OPM reports that its “HRM 

Accountability System Development Guide” contains more than a hundred measures that could be 

applied to the whole range of HRM programs and 

processes, and also identifies several possible measures for each of five broad HRM functions of 

more or less universal relevance to Federal agencies. 

Nonetheless, the measurement tools that were 

developed are not universally viewed by participants as practical or sufficiently based on measuring results. As noted by one disappointed senior 

line official who had participated in developing a 

self-assessment guide for the program:

A great deal of time and effort went into developing descriptions of intangibles. Why go to all that 

trouble to measure the unmeasurable? The guide 

does not have tangible, measurable results. It was 

an incredible amount of work, brainstorming, and 

the like with no results that can be measured.51

OPM reports that it subsequently “has developed a 

number of other initiatives to identify and disseminate information about HR measures.” This simply 

may be an area where there is always more to be 

accomplished.

A particular challenge in operating the oversight 

program is creating a better link between what the 

oversight and effectiveness components of OPM 

are doing. In addition, agencies must establish better internal communications concerning the work 

they are doing jointly with OPM. In fact-finding 

for our 1998 report, we made two observations:

• Oversight field divisions we visited were not 

“carrying the banner” for the work of the effectiveness staff. Neither were the oversight staff 

members encouraging self-assessment efforts in 

organizations that they visited. This is a missed 

opportunity, since the oversight staff are trained 

evaluators whose expertise could help “sell” the 

self-assessment ideas coming out of the work of 

the effectiveness staff.

51 Ibid., p. 31.
30 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

• While the effectiveness staff are working closely 

with agency representatives (largely in the greater 

Washington, DC metropolitan area) to develop 

self-assessment models, key HR and management officials in field offices of those agencies 

told us they were unaware of the work being 

done. Unless or until agencies improve their 

internal communications concerning this work, 

the work by agencies and OPM will be of little 

practical value.

OPM believes it has substantially addressed the 

former issue. Accountability coverage has been 

made a standard part of each oversight review and 

is routinely conducted by Oversight staff both in 

the field and in Washington. Every agencywide 

oversight report contains a section addressing this 

subject, and that section includes a discussion of 

the status of each agency’s self assessment system. If 

an agency’s self assessment program is considered 

weak, OPM reports that it offers the agency suggestions for strengthening it. The latter issue is one 

that can only be addressed by the agencies themselves.

The current oversight approach includes significant 

reliance upon analysis of information captured by 

the Central Personnel Data File and on survey 

information obtained in advance of reviews. Similarly, all agencies and OPM offices rely on the 

CPDF for a variety of recurring and special reports 

reflecting the status of employees and HR programs. Data analysis capabilities for oversight purposes are developed by staff in O&E’s effectiveness 

component—indicating an area where good interaction between the oversight and effectiveness components exists. Maintenance of the CPDF is the 

responsibility of the third component of O&E, the 

Office of Workforce Information (OWI).

There is widespread recognition today that the 

CPDF falls somewhat short of its optimum capabilities. While a 1998 GAO report found that at 

least “63 percent of CPDF data elements in [two 

samples drawn for the GAO study] were 99 percent 

or more accurate”52 on a Governmentwide basis, 

GAO found something else that agencies know: 

that data elements vary widely with respect to accuracy. GAO found “the least accurate data element, 

education level, was about 73 to 77 percent accurate,”53 again on a Governmentwide basis. GAO 

also cautioned that “previous work has shown that 

specific data elements for specific agencies can be 

much less accurate”54 than the Governmentwide 

99-percent-or-more accuracy found in its study. 

Since data analysis is directly influenced by the 

accuracy and timeliness of the data being analyzed, 

this makes the content of the CPDF a matter of 

importance to all agencies, and OWI has also been 

tasked to work with agencies to develop the structure, operating parameters, and content for the 

next generation CPDF.

OPM has made progress in making data available 

to Government agencies and the public. Recently 

OPM introduced an online tool for accessing and 

analyzing a large array of employment data. With 

this program (called Fedscope), users can call up 

data reports that have already been created or create 

their own reports. Anyone who has internet access 

can use this software, which is accessible through 

OPM’s website.

Agencies’ views. What do agencies think of the 

changes that have taken place in OPM’s oversight 

of the merit system over the last ten years? Based on 

responses to our interrogatory surveys, they are 

generally pleased with OPM’s new directions in its 

approach to oversight of HRM. Most responding 

to our survey believed that the move away from a 

52 United States General Accounting Office, “OPM’s Central Personnel Data File: Data Appear Sufficiently Reliable to Meet Most Customer Needs,” Washington, DC, September 1998 (GAO/GGD-98-199), p. 5.

53 Ibid., p. 5.

54 Ibid., p. 5.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 31

strict case-examining, compliance-oriented review 

toward broader performance measures and outcomes was an appropriate one, and in line with 

what’s happening in the rest of the Federal Government (e.g., GPRA requirements). As one agency 

respondent noted:

“OPM has moved toward analyzing a variety of 

HR-related activities, programs, perceptions and 

personnel actions, and away from examining only 

cases and records. This broadbased look helps promote a more balanced view of HR performance 

and accountability. It also opens avenues for candid discussions on the status of HR in an agency.”

Several agencies also commended OPM’s efforts to 

encourage self-evaluation (although some did not 

believe that OPM had gone far enough in this 

area). Some agencies are currently working with 

OPM to develop self-assessment programs in HR. 

While some agencies reported that they expect 

their programs to rely heavily on monitoring of 

selected indicators taken from multiple program 

evaluation reports, surveys, and real time data from 

the agency’s personnel/payroll system, OPM indicates that it will encourage agencies also to include 

proper attention to the effect of process on the 

merit system.

A number of agencies commented that they supported the emphasis on program management 

accountability for HR. However, the belief was also 

expressed that to really take the lead in Federal HR 

accountability, OPM needs to be involved in all the 

major accountability initiatives going on throughout Government. Unfortunately, resource limitations make it difficult for OPM to stay abreast of 

accountability efforts governmentwide. But helping agencies to build accountability systems by providing automated customer feedback tools/models, 

appropriate measures, and usable processes for 

assessing HR effectiveness would be one way for 

OPM to exert more leadership in this area.

To summarize, OPM’s oversight program has 

ended its first two decades on a positive note. 

OPM’s structure offers consistency in oversight 

program philosophy and delivery; merit system 

principles are the program’s focal point; and there is 

a clear effort to help build agency self-assessment 

systems. OPM also has sought and obtained two 

new civil service rules, put into effect early in 2001, 

that require agencies to establish HRM accountability systems, extend OPM authority to review 

alternative personnel systems, and ensure that all 

agencies report accurate and timely workforce 

information to OPM. And it has extended its coverage of non-title 5 systems and agencies in its oversight reviews. Further, OPM has demonstrated the 

ability—and the will—to ensure legal and regulatory compliance, and the program has begun to 

focus on measuring the outcomes of HRM decisions and on demonstrating the importance of 

good HR practices to mission accomplishment. 

Full funding through appropriations ensures that 

the program need not seek reimbursement from 

agencies, avoiding potential conflicts of interest. 

Along with these improvements, there are continuing challenges as the oversight program continues 

to adapt to or be refined to accommodate a decentralized HRM environment:

• Continuing work on devising practical measures 

with respect to HRM outcomes (both for OPM 

reviews and agency self-assessments);

• Finding the proper balance between focusing on 

outcomes and reviewing procedural correctness;

• Ensuring proper attention to the accountability 

of line managers and supervisors during oversight reviews;

• Continuing to encourage agencies to assess their 

own HRM programs and, integrating their 

efforts with OPM’s oversight efforts (OPM 

reports it is undertaking this latter as a pilot in 

FY 2002); and

• Helping to define and develop a next generation 

CPDF that is responsive to the accuracy and 

timeliness needs of agencies and OPM offices, 

with special attention to the concerns of line 

managers.

Providing Program Guidance and Leadership

We noted in our 1989 retrospective report that for 

OPM to provide program guidance and leadership, 

it must exert a positive influence in most personnel 
32 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

program areas. This influence “may start with carefully developed program guidance which has, as 

one of its ultimate goals, the development of sound 

personnel policies which allow and encourage the 

Federal workforce to operate effectively and efficiently.”55 As part of the exercise of influence, 

OPM is engaged in conducting research, oversight 

of the agencies’ HRM operations, providing technical assistance on HRM matters, and developing 

and administering various HRM programs and 

policies.

We cautioned in that 1989 report, however, that 

sharp declines in OPM’s staff levels from 1980 to 

1989 seemed to have a negative impact on its ability to carry out these critical functions. Unfortunately, the years since our last study have seen even 

more dramatic reductions in staff (and budget) levels for the agency. As the figure above illustrates, 

OPM’s overall staffing levels fell by 47 percent 

between FY 1989 and FY 1999, with an overall 

decrease of 58 percent since FY 1981. If one were 

to judge by staffing levels alone, OPM is a shell of 

the agency that was created by the Civil Service 

Reform Act of 1978.

Some might argue that the new “leaner” OPM, 

with its emphasis on automation, privatization of 

some functions, streamlining of operations, and 

reimbursable work, is able to 

accomplish its mission more 

effectively than ever before. 

Speaking at her 1997 swearingin ceremony, former OPM 

Director Janice Lachance stated, 

“We here at OPM have often 

discussed the Government of the 

future . . . It is one that is 

smaller, more automated, more 

family-friendly, more customer 

oriented, more focused on 

results and performance, and 

more dedicated to the merit principles than ever 

before. Under Jim King’s leadership, we have 

reshaped this agency into one that is now poised to 

lead the way to this new vision of Government.”

Despite that expression of confidence, one cannot 

help but wonder if the drastic reductions that have 

occurred in funding and staffing levels at OPM 

have hampered its ability to exert leadership in Federal human resource management. With that question in mind, we discuss in the following sections 

some of OPM’s activities in critical HR program 

areas over the last decade.

Recruiting and retaining a high quality workforce. In our 1989 report we voiced concerns 

about the Federal Government’s continued ability 

to recruit, maintain, and retain a highly qualified 

workforce. The quality of the Federal workforce 

continues to be of paramount concern. In the opinion of one researcher who commented on this 

issue:

Simply stated, the Federal talent pool is about to 

start draining out with little or nothing in the 

pipeline to replace it. It is a crisis of staggering, if 

quiet, proportions, and one that merits immediate 

action at both ends of Pennsylvania Avenue. It is 

also a problem that cannot be solved with the current inventory of Federal recruitment programs

. . . Gone are the days when talented employees 

55 Op. cit., “U.S. Office of Personnel Management and the Merit System: A Retrospective Assessment,” June 1989, p. 22.

OPM FTE Staff Levels, FY 1981, 1989-2000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1981 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Source: U.S. Office of Personnel Management

FTE's
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 33

would endure endless hiring delays and a mindnumbing application process just to get a Government job.56

There are currently more than 1.8 million Federal 

employees (excluding postal workers) performing 

an immense range of tasks required to carry out 

thousands of Government programs and services. 

Over the past decade we’ve seen a substantial 

decline in the overall number of Federal employees, 

but without a substantial decline in the level and 

amount of work required of them. This fact—even 

if one does not accept the more dire of the popular 

predictions about a workforce quality decline—

means that the workers who remain and the candidates who are hired in the future must be top quality employees. Because the mission of the Federal 

workforce is so complex and varied, the Federal 

Government must compete hard for workers with 

the skills and abilities needed to administer its multifaceted mission.57 There is a prevailing belief, 

however, that in today’s world, the Federal Government is not the employer of choice. For example, a 

poll of Phi Beta Kappa college seniors conducted 

by George Washington University found that “only 

13% considered working for the Federal Government a ‘very appealing option’.”58 This situation is 

certainly cause for concern as the Federal Government anticipates the likelihood of a future with a 

smaller workforce carrying out responsibilities 

requiring increasing levels of skills and education.

Without a well-qualified workforce, the Federal 

Government cannot effectively provide the services 

the Congress requires of it or the public demands 

of it. What is OPM’s role in quelling this crisis? 

According to former Director Lachance, OPM 

plays a major role in attracting and selecting the 

talent to ensure the integrity of the civil service system. As she noted in 1998, “ . . . in a downsized 

and increasingly more complex and constantly 

evolving Government, it is ever more important 

that we have the best leaders, the best workers, the 

best team we can possibly assemble. Assembling 

that team—and taking proper care of it—is one of 

OPM's core purposes.”59

Employment Service mission and programs. Recognizing the tremendous challenges agencies face in 

recruiting and assessing candidates, OPM sees the 

following as the primary mission of its division 

responsible for providing agencies with staffing 

assistance:

The Employment Service provides leadership and 

manages the merit-based employment system for 

the Federal Government. In partnership with 

agencies, the Service provides a high-quality, 

diverse workforce through a mix of policy direction, technical assistance, and reimbursable services in the following areas: readily accessible 

employment information for job seekers; state-ofthe-art assessment techniques; efficient, meritbased staffing services; veterans’ preference; workforce diversity analyses; automated human 

resources management (HRM) systems; organizational analysis and improvement services; and 

innovative restructuring and placement programs.

But the Employment Service faces a tough challenge in achieving this vision, particularly in view 

of the very dramatic changes it has experienced 

over the last 10 years. The division has undergone 

significant downsizing since FY 1995, and a complete transformation in the sources of its funding. 

In 1994, Employment Service had a salaries-andexpenses appropriation of $442 million and a 

revolving fund (for reimbursable work) of $4.7 

million; in 1999, its salaries-and-expenses appropriation was only $21.4 million, and its revolving 

fund was estimated at $33 million. OPM closed 

eight service centers during that time. By the late 

1990s, OPM had “introduced new, collaborative 

56 Light, Paul C., “The Talent Pool Runs Dry,” Government Executive, September 1999, p. 14.

57 Advisory Committee on Federal Workforce Quality and Assessment, “Workforce Quality Measurement and Improvement,” August 1992.

58 Adams, W., Goldsmith, A.S., McKenna, D.A. and Rosse, P. S., “Phi Beta Kappas View the Feds,” FPMI Newsletter, September 14, 1999.

59 Speech by Janice Lachance to Presidential Management Interns, August 31, 1998, in Shepherdstown, WVA.
34 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

processes for developing policy, major HR system 

improvements for use by Government agencies, 

and new internal operating and financial systems to 

support the delivery of cost-effective reimbursable 

HR services.”60 So, not only were the size and 

structure changed through downsizing and budget 

reductions, but the Service essentially became a 

market-based operation “which pays its own way 

by selling to other agencies such staffing services as 

processing applications, administering tests, and 

rating applicants for promotion.”61

These changes, for all intents and purposes, put the 

examining system into the hands of the agencies. 

Agencies, in turn, could either conduct their own 

examining or contract with OPM or some other 

organization to provide all or part of the recruitment and placement services they needed. Under 

the new structure and entrepreneurial approach, 

Employment Service has introduced a number of 

initiatives that agencies can use in their staffing 

programs. Some of the more significant of these 

initiatives include:

• The design and maintenance (with financial 

assistance from the agencies) of an automated 

employment information system (USAJobs) in 

which all Federal job vacancies are announced 

via telephone, fax, personal computer, and touch 

screen kiosks. This system includes both vacancy 

announcements and application forms, and is 

available around the clock.

• Initiation of stakeholder forums to develop staffing policies with the agencies’ input.

• Establishment of career transition and placement 

programs to give displaced Federal employees 

special selection consideration for vacancies for 

which they are well qualified.

• Introduction of a recruiting program designed to 

increase the representation and advancement of 

Hispanics in the Federal workplace; also, actions 

to enable students at Historically Black Colleges 

and Universities to have better access to Federal 

employment information.

• Design and implementation (in collaboration 

with a multi-agency consortium) of Employee 

Express, an automated system that allows Federal employees to use their computers to make 

certain changes (e.g., name, address, benefits) to 

their personnel system records. The system eliminates much paper processing formerly done by 

HR office staff.

• Development of USACareers, an automated 

package that agencies can use to help employees 

affected by downsizing to determine training 

needs, develop career paths and find new jobs. 

This package is offered on a subscription basis.

• Sponsorship of an annual conference for agency 

HR employment professionals in order to communicate the latest developments in the employment arena.

• Development and refinement of training provided delegated examining units staffs, as well as 

the automated data systems available to DEU’s 

which provide information and guidance on 

examining, qualifications, merit systems issues, 

etc.

• Development of an array of staffing services and 

products, available to Federal agencies as well as 

state and local governments on a reimbursable 

basis.

• The elimination of the standard form 171 as the 

required format for application for Federal jobs. 

In most cases, applicants may now opt to submit 

resumes when applying for Federal jobs, in lieu 

of the SF-171.

Clearly, OPM’s Employment Service staff took 

seriously the advice of the NPR concerning 

changes recommended in its structure and operating methods. Again, while staffing and budget cuts 

meant that they had to change in order to survive, 

it does appear that many of the actions and initia60 “1998 Federal Section Award Winners,” Federal Section News, IPMA, December 1998, vol. 16, no. 6, p. 5.

61 Speech by James B. King, June 18, 1997.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 35

tives were intended to streamline the recruitment 

and staffing process, making it more user-friendly 

for both the agency and the applicant customer 

while still adhering to the underlying merit principles.

Customers’ views. What do OPM’s customers think 

of the quality of the products and services offered 

to help with recruitment and selection? Almost 

two-thirds (63 percent) of the HR specialists polled 

by OPM agreed that OPM’s products, presentations, and assistance are helping their agencies to 

understand existing HR flexibilities designed to 

attract and retain highly qualified employees. 

Almost half of OPM’s survey respondents (47 percent) reported that they were satisfied with the 

range of reimbursable services OPM offers. When 

the Board asked the agency officials about some of 

those products and services, the respondents were 

generally positive about the quality of the products 

and services. USAJobs, for example is viewed as 

fairly progressive, with agencies reporting that they 

are able to draw more applicants in less time. (And 

according to OPM’s customer survey data, 80 percent of HR specialists responding were satisfied 

with OPM’s policy leadership in undertaking 

improvements to the USAJobs system.) However, 

some of the agency officials whom we queried complained that because the information about job 

vacancies is so readily available to such a wide audience, they were getting a large number of unqualified applicants—people looking for jobs who have 

little or no knowledge about the kind of work done 

in the Government and the skills required for those 

jobs. One respondent explained:

[USAJobs] is a powerful double-edged sword. On 

one hand, it allows agencies to quickly and easily 

disseminate job information worldwide, it streamlines the process of meeting public notice requirements, and undoubtedly has garnered the 

attention of individuals who would not have 

actively sought Federal employment through the 

older, more cumbersome process. On the other 

hand, it has exponentially increased the volume of 

applications received, many being incomplete or 

from unqualified candidates. It requires considerably greater expenditure of agencies’ HR resources 

to screen the applications, rate and rank qualified 

candidates, and respond to applicants.”

Despite the mixed feelings expressed by some, most 

respondents to our interrogatory survey seemed 

pleased to have USAJobs available to assist with 

their staffing responsibilities, primarily because of 

the speed with which jobs can be advertised and 

because the system typically gives them a larger 

pool of candidates from which to choose than previously had been available. The Board has, on 

numerous occasions, advocated “encouraging selection from among as large a number of well qualified candidates as is reasonable and feasible”62 in 

the interest of increasing the likelihood of the best 

candidates being selected for Federal jobs, and 

USAJobs certainly appears to assist in that effort.

Reimbursable services. A number of interrogatory 

survey respondents complained about what they 

saw as high costs of some of the reimbursable services, especially when there is no cap on the charges 

for the services (or no good way of estimating what 

particular services will ultimately cost, since the 

charges are influenced by factors that aren’t always 

known, such as the number of individuals who will 

apply for a particular job when OPM is reviewing 

the applications). Although it is understandable 

that OPM would not be able to establish fees in 

advance or set maximum prices on contracts when 

there are unknown variables, as they perform more 

reimbursable work they should be able to provide 

agencies with better estimates. For example, OPM 

should be able to use its experience with different 

combinations of occupations, timeframes for 

receipt of applications, and various labor market 

conditions to project the number of candidates 

who are likely to apply for a given vacancy. However, even with accurate cost estimates, agencies 

might not be able to afford OPM’s services. As we 

62 U.S. Merit Systems Protection Board, “The Rule of Three in Federal Hiring: Boon or Bane?” Washington, DC, December 1995, p. 36.
36 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

noted in our 1999 report on delegated examining, 

it is really in the best interest of the Government to 

have agencies use good assessment tools when making hiring decisions, but “it is inconsistent with 

that interest for written tests capable of improving 

the quality of those decisions to be priced beyond 

what agencies are prepared to pay for them.”63

Thus, it may be in the Government’s best interest 

for agencies to have access to some of these assessment tools without charge.

Although reimbursable services account for the 

greater portion of the Employment Service’s work, 

there are other staffing-related services that agencies 

do not pay for. The development of policies (with 

input from the agencies), and advice and interpretation of those policies (and Federal staffing laws 

and regulations) continue to be provided without 

charge, and apparently, with the general approval of 

OPM’s customers. According to OPM’s customer 

satisfaction survey results, 87 percent of HR specialists are satisfied with OPM’s information sharing concerning employment information (84 

percent are satisfied with technical assistance in this 

area); 81 percent are satisfied with information 

shared concerning selection and promotion policies, and 77 percent are satisfied with information 

shared concerning merit-based examining tools 

(while 79 percent and 76 percent are satisfied with 

the technical assistance in these two areas, respectively).

Our own interrogatory survey uncovered some 

concerns in this area, however. Agencies expressed 

concern that OPM’s allocation of a large portion of 

its resources to reimbursable services has compromised its ability to adequately assist agencies with 

their questions and problems concerning interpretation of laws, regulations, and policies. Some of 

our respondents were frustrated with the scarcity of 

experienced staff available to respond to their questions in a timely manner. Others complained of 

inconsistent or inaccurate interpretation of the regulations or guidance. This has become especially 

critical since the elimination of the Federal Personnel Manual.

A number of agencies offered suggestions as to how 

this situation might be improved such as establishing a “one-stop-shopping” advice line, or providing 

agencies with names and numbers of experts in the 

various program areas who might be contacted for 

specific advice. One suggestion, offered by several 

agencies, was for OPM to become a more proactive 

resource by collecting and sharing “best practices” 

information with agencies in the area of employment services. This is a suggestion that arises again 

and again when stakeholders discuss ways in which 

OPM can help them. Indeed, the Board’s 1998 

report on OPM’s oversight program offered the 

same recommendation,64and that was not the first 

time it had been suggested. More recently, an interagency work group on performance management 

recommended, in a report to the President’s Management Council, that agencies should “share successful practices [that lead to resolution of 

performance problems].”65 However, simply stating that agencies should share information doesn’t 

help much. Here’s an ideal place for OPM to step 

in and take the lead in establishing a central clearinghouse for soliciting, collecting, and sharing 

information. Whether it’s in the staffing, performance management, or some other area of human 

resources, the sharing of best practices and 

approaches to problem-solving is something that 

agencies always want. OPM’s oversight staff has 

been providing this sort of information since 1997 

(when we collected data for our 1998 oversight 

study, some HR offices reported receiving this 

information, but not at regular intervals or in a 

uniform manner), and for the past 2 years has been 

63 Op. cit., “The Role of Delegated Examining Units: Hiring New Employees in a Decentralized Civil Service,” p. 13.

64 Op. cit., “Civil Service Evaluation: The Evolving Role of the U.S. Office of Personnel Management,” Washington, DC, July 1998, pp. viii, 21-22. 

65 Interagency Work Group on Performance Management, “Report to the President’s Management Council on Managing Performance in the Government,” 

Washington, DC, February 2000, p. 9.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 37

using the Internet to distribute this information 

approximately quarterly. In addition, in the performance management area, OPM’s website offers a 

“Performance Management Clearinghouse,” where 

users can search for performance management 

information by agency, type of program, process, or 

practice. A concerted effort to collect this kind of 

information in all HR areas, to present it in a systematic manner at a single, easy-to-access source, 

and to make sure agencies know it’s available seems 

like a logical next-step for OPM.

Most agencies that responded to our questionnaire 

seemed to understand OPM's dilemma of having 

to juggle resources when there were more needs to 

be met than resources to handle those needs. They 

were not as understanding, however, about what 

they see as the lack of communication between 

those dispensing advice and assistance in the 

Employment Service area and those responsible for 

oversight of agencies' staffing actions. A number of 

agencies complained that they had been faulted in 

OPM oversight reviews for inappropriate actions 

when the actions had been based on advice received 

from the OPM program office staff. OPM is 

attempting to remedy the situation by having the 

oversight staff and the Employment Services staff 

conduct monthly teleconferences to discuss technical issues in order to assure consistent interpretation of laws and regulations.

Despite some real and continuing problems, given 

the resources that OPM has had to work with over 

the last decade, the Board believes that it has done 

an admirable job of trying to assist the agencies 

with their staffing needs by developing and offering 

products and services to enhance the recruitment, 

assessment, and selection process. However, we 

remain concerned about the ability of the Government to perform high quality assessments to determine which candidates for Federal jobs are most 

likely to perform well. Written tests, which are a 

superior assessment tool, have been and continue 

to be developed and administered by OPM, but at 

a cost that many agencies may not be prepared to 

pay. Further, while OPM markets tests on a reimbursable basis, it has not campaigned to get agencies to use written testing as a preferred method of 

assessing candidates. Nor has OPM tried to help 

agencies by requesting funds to develop tests that 

can be made available Governmentwide without 

charge. The cost effectiveness of one agency being 

funded to develop tests that can be used by all 

agencies should not be discounted. As the Government’s HR leader, OPM is well-positioned to promote these concepts, but has not done so.

In addition to our concerns about agencies’ funding constraints preventing them from taking 

advantage of OPM’s products and services, we are 

also concerned that managers (and HR staff) are 

still quite unhappy with the state of staffing as it 

exists in the Federal Government today. We base 

this assessment on responses to our interrogatories 

as well as information from numerous studies we 

have conducted over the past 20 years. Many managers and HR specialists are still convinced that 

they are not getting the high quality candidates that 

they should be getting for their jobs. Based on their 

comments, it appears that the source of their discontent lies not only in the recruiting and selection 

procedures per se, but also in the laws and regulations that control how the process operates. Specifically, they are unhappy with restrictions on how 

they are allowed to select, appoint, and promote 

employees, such as the so-called “rule of three,” veterans preference laws, and time-in-grade restrictions, as well as what our respondents see as a 

compensation system that does little to help them 

compete with private sector employers.

While we have made recommendations over the 

years that OPM seek legislative relief from some of 

these laws and regulations (for example, we recommended that OPM seek legislation to abolish the 

rule of three), changes are slow in coming. This is 

not always because of OPM’s lack of initiative. For 

example, in 1995 and 1999, because of the success 

of pay banding in demonstration projects, OPM 

drafted legislative proposals to extend that initiative 

to all agencies. Such action could greatly assist 

agencies’ recruiting and retention efforts as they try 
38 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

to compete with the private sector. Congress has 

not yet enacted such legislation, however. Similarly, 

a 1999 OPM legislative proposal recommended 

that categorical grouping—an alternative to the 

Rule of Three—be authorized, but again, no 

changes have been enacted. Thus, even in cases 

where OPM has sought legislative changes to rules 

that agencies believe hamper their efforts, the lack 

of progress very likely colors agencies’ views of both 

the staffing process and OPM’s role in that process.

Federal classification and compensation.

The issue of how Federal employees will be compensated for their work in future years is one of 

the most important matters to be addressed in the 

next century. A new compensation system that 

rewards contribution and serves as an incentive to 

productivity is required. OPM leadership to foster 

this kind of development would be welcome.

— Interrogatory Survey Respondent

The statutory Federal classification and compensation systems are critical aspects of the Government’s human resources management program. 

The two systems (codified in 5 USC chapters 51 

and 53) are very much related: the classification 

system provides a means of categorizing positions 

according to the kind of work done, the level of difficulty and responsibility, and the qualifications 

required, thus serving as a building block for the 

compensation systems to determine how much an 

employee should be paid for performing in those 

positions.

These systems have been the target of much criticism over the last several decades. The classification 

system, which has existed essentially in its present 

form since the end of World War II, is thought to 

be antiquated and no longer relevant by many critics. As former Director Lachance noted, “The 

effectiveness of organizing the workplace and its 

human resources management systems around 

‘positions’ or ‘jobs’ as we have known them is waning fast. In many organizations now, employees are 

assigned to a position, but are called upon to perform one role today and another tomorrow. They 

often spend much of their time working on a variety of tasks, teams, and special projects. Selections 

for these assignments are often based not on the 

employee’s position . . . but rather on the skills of 

the particular employee . . . So, in the future, staffing and employment will be quite a different process than our traditional model of simply matching 

employees with specific positions that are expected 

to remain fairly stable.”66

Likewise, the compensation system has been criticized by many as being so outdated as to hamper 

efforts to recruit and retain an effective Federal 

workforce. Criticisms of the system, many of which 

focused on the so-called “pay gap” between Federal 

salaries and private sector salaries for similar jobs, 

reached a critical level in the late 1980s. As a result 

of the discontent with the system, OPM led an 

extensive research effort to identify specific problems with the compensation system and develop a 

plan for addressing those problems, including the 

gap between public sector and private sector pay. In 

1990, largely as a result of OPM’s efforts, Congress 

passed the Federal Employees Pay and Comparability Act (FEPCA) in an attempt to narrow the pay 

gap. FEPCA was designed to close the gap over a 9-

year period by addressing the pay gap by locality 

rather than across the board.67

Nonetheless, in the years since the passage of 

FEPCA, the pay gap has not been narrowed to the 

extent originally envisioned. The Clinton administration, which took charge after the legislation was 

enacted, believed the FEPCA methodology to be 

flawed. These flaws included, among others, an 

inability to consider labor market factors such as 

quit rates and applicant quality when recommending locality pay adjustments. Thus, yearly Federal 

salary increases that ultimately were approved have 

66 Speech by Janice Lachance at the Strategic Compensation Conference, Alexandria, VA, September 8, 1999.

67 Friel, Brian, “Pay Gap Takes Center Stage Again,” GovExec.com, January 7, 1999.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 39

not been at the levels FEPCA calculations called 

for. As one writer has noted, “Inadequate political 

support for resolving Federal workers’ pay problems offsets any interest in improving the program. 

Despite Congress’ willingness to enact FEPCA in 

1990 and accept the need for locality pay, the pay 

gap is still an issue in every one of the metropolitan 

areas defined for locality pay differentials.”68

In recognition of ongoing problems with the classification and compensation systems, OPM has proposed a number of initiatives aimed at improving 

these systems and enabling agencies to be more 

competitive with the private sector in recruiting 

and retaining a high quality workforce. For example, based on the success of pay-banding initiatives 

in Federal demonstration projects, OPM has recommended the adoption of pay banding on a Governmentwide basis. Also, OPM has promoted the 

use of pay incentives such as recruitment and retention bonuses to assist agencies in recruiting for 

hard-to-fill jobs. And most recently, OPM 

embarked upon (yet another) extensive study of the 

total compensation system. As one of its strategic 

objectives, OPM is reviewing the current compensation system and plans to “develop a performanceoriented system of total compensation within the 

next two to three years . . . [with the] goal of proposing legislative changes to achieve a modernized 

pay system by the year 2002.”69 OPM created a 

new organization, the Workforce Compensation 

and Performance Service, which is reviewing the 

various elements of the system with stakeholder 

groups (such as unions, administration leadership, 

and employee and management groups) in an 

attempt to design an improved system based on 

their identification of the best compensation practices available.

When we asked agency HR directors their views 

concerning OPM’s leadership in improving the 

Government’s Federal compensation system, their 

opinions were mixed. Several commended OPM’s 

new approach of looking at total compensation, 

and expressed the hope that it will lead to improvements. A few also noted that OPM has taken some 

actions, such as those relating to recruitment and 

retention bonuses, which have been of help in their 

efforts to maintain a high quality workforce.

Others, however, criticized OPM’s lack of leadership in this area. Several felt that OPM has relied 

on a piecemeal approach to solving problems with 

the compensation system. Others complained that 

OPM sees pay-banding as the answer to everything 

and are frustrated with OPM’s lack of progress in 

creating a system that helps them recruit and retain 

a high quality workforce. As one HR director 

noted, “It isn’t so much that OPM has taken specific actions that hurt recruitment and retention, 

but the fact that they haven’t taken actions to 

enhance recruitment and retention.” Recent OPM 

legislative proposals to improve incentives such as 

recruiting and retention bonuses may help, but that 

remains to be seen and in any event, they do not 

eliminate the impression of a piecemeal approach.

OPM’s role in compensation is an interesting one. 

In a sense, the compensation situation epitomizes 

the sometimes conflicting missions that OPM was 

created to accomplish. That is, one would expect 

that an agency charged with providing Federal HR 

leadership would be urging the Congress and the 

administration to approve pay raises in accordance 

with FEPCA, a law many of whose specifics are 

based on OPM’s own research. On the other hand, 

OPM was established as an agency to carry out the 

administration’s mandates, which may not always 

be consistent with previous administrations’ visions 

of ideal HR policies and practices. When shortterm objectives clash with the best interests of the 

civil service, what role should OPM play—leader 

for a professional, merit-based civil service system 

or agent of the administration?

68 Risher, Howard, “Why Your Pay Doesn’t Stack Up,” Government Executive, August 1997.

69 “OPM to Look at Reinventing Federal Pay,” Federal Section News, IPMA Federal Section, May 1999.
40 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

While OPM’s current efforts to study and redesign 

federal compensation are encouraging, we fear that 

they may not be sufficient to bring about major 

change in the system. If the past is indeed prologue, 

extensive study of the problem and recommendations for system overhaul may not be adequate in 

the face of political resistance to change.

Research programs and demonstration projects.

The authority for conducting research and demonstration projects was created by title VI of the 

CSRA. These projects were intended as a vehicle 

for evaluating new approaches to Federal HR management. Demonstration projects involve the 

waiver of some law, rule, or regulation, whereas 

research projects may be conducted within the 

scope of existing law, rule, or regulation. OPM’s 

role, according to title VI, was to conduct or 

approve these projects. When the research and 

demonstration project authority was approved by 

Congress in 1978, it was anticipated that there 

would be a “small but steady stream of demonstration projects and a larger flow of research 

projects.”70

In our 1989 report on OPM, we noted that OPM’s 

impact on research and demonstration projects had 

been much less pronounced than originally anticipated. At the time of that report, only four research 

programs and four demonstration projects had 

been implemented. In 1992, the Board took a 

comprehensive look at what OPM and the agencies 

had accomplished under the research and demonstration project authority. We concluded that 

although the impetus for many improvements in 

Federal personnel management had come from 

ideas explored in research and demonstration 

projects, changes were still needed in OPM’s management of the program. Recognizing OPM’s prior 

unsuccessful efforts to persuade agencies to carry 

out demonstration projects based on OPM’s 

research ideas, the Board recommended that OPM 

take a stronger leadership role by developing concepts and ideas for demonstration projects and 

soliciting agencies willing to carry them out. We 

also recommended that OPM request funding that 

could be reallocated to agencies for taking on demonstration projects. The report further recommended that OPM simplify the approval process 

for conducting demonstration projects and 

improve the collection and dissemination of information resulting from the demonstration projects. 

Finally, we recommended that OPM seek legislative changes to alleviate some of the restrictions on 

demonstration project authority and to allow the 

testing site to permanently adopt successful concepts tested.71

In 1993, OPM published its own review of the 

demonstration project authority, concluding that it 

had “not managed the authority so as to maximize 

the number of projects.”72 However, the report also 

asserted that the number of projects undertaken 

was but one measure of success, and that more 

important is the impact that demonstration 

projects have on Federal personnel management. 

OPM’s discussion of the history of the demonstration project authority and recommendations for 

change reiterated many ideas that the Board had 

proposed in 1992, and noted, as well, that agencies 

needed OPM to provide a clearer understanding of 

the intended purpose of demonstration projects 

and to identify suitable test issues. That report also 

acknowledged that OPM should solicit agency 

interest and work with agencies throughout the 

process.

Have the recommendations made by the Board and 

by OPM’s own internal review led to improvements in the demonstration project program? Yes 

and no. OPM has made efforts to better disseminate information acquired from demonstration 

70 Op. cit. “Civil Service Evaluation: The Role of the U.S. Office of Personnel Management,” p. 25.

71 U.S. Merit Systems Protection Board, “Federal Personnel Research and Demonstration Projects: Catalysts for Change,” Washington, DC, December 1992.

72 U.S. Office of Personnel Management, “Retrospective on the Demonstration Project Authority: Lessons Learned,” Washington, DC, December 1993.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 41

projects that have been conducted. A great deal of 

information concerning active and completed demonstration projects is available on OPM’s web site. 

Agencies included in our survey that have proposed 

demonstration projects report that OPM has been 

helpful in assisting them navigate the complex 

project approval process. But that process, unfortunately, remains cumbersome and off-putting, in 

spite of OPM’s diligent efforts to make it otherwise. OPM’s own customer satisfaction survey 

results show that only about half of the HR specialists responding (53 percent) were satisfied with the 

technical assistance they received concerning demonstration projects and alternative personnel systems, and only slightly more than that (56 percent) 

were satisfied with OPM’s sharing of information 

in this area.

Legislative changes that OPM informally proposed 

in 2000 to simplify the demonstration project process might have improved the situation considerably. The proposal would have eliminated some of 

the time-consuming elements of the approval process (e.g., the requirement for a public hearing for 

each proposal); done away with the restriction on 

the number of projects that can run simultaneously 

(currently 10); increased the number of employees 

who can be included in a demonstration project 

from 5,000 to 25,000; and given OPM the authority to allow agencies to adopt successful HR innovations as alternative personnel management 

systems, without congressional action.

But those changes were not formally proposed. A 

relatively limited number of innovations have been 

applied on a permanent basis during the 20-plus 

years that the demonstration authority has been 

available, and none have been applied governmentwide. To date Congress has permitted three demonstration projects to be made permanent 

alternative personnel systems at the sites at which 

they were conducted. In addition, the findings of 

completed projects have led to some changes in 

Federal human resources management. One notable initiative based to a significant degree on information from research and demonstration projects 

was the pay comparability legislation discussed 

above. The basis for FEPCA was a research project 

overseen by OPM, and many elements of the legislation were based on information from demonstration projects that tested pay for performance 

initiatives, such as China Lake. Efforts are still 

being made to extend the benefits of successful 

demonstration projects. The Bush administration 

has fashioned a legislative proposal that would, 

among other things, make it easier for agencies to 

adopt some of the practices proven to be successful 

in past demonstration projects. The President proposed this “Freedom to Manage” Act to the Congress in October 2001.

There are currently two active OPM demonstration projects and four otherwise completed (or terminated) demonstration projects. Interestingly, one 

of the current demonstration projects cuts across 

organizational lines in the Department of Defense 

to look at a particular workforce (acquisition), 

lending support to the idea that OPM is interested 

in looking at governmentwide issues and soliciting 

agency interest in testing those issues, as opposed to 

just approving individual agency solutions to more 

parochial problems.

There are also eight other active DoD laboratory 

demonstration projects. DoD received shared (with 

OPM) authorization for demonstration project 

authority in the FY 1995 Defense Authorization 

Act. The FY 2001 Defense Authorization Act (PL 

106-398) completely eliminated OPM’s authority 

for these projects under 5 USC chapter 47, so 

while OPM may play a consultative role, it has no 

real say in how the projects are run. In fact, such 

arrangements may become more common in the 

future—in the absence of legal and regulatory revisions to make the demonstration project process 

less cumbersome, agencies are finding other ways 

to address their interest in experimenting and their 

need for innovation.

And in spite of OPM’s efforts to propose legislative 

change to assist agencies in getting projects 

approved, OPM has not made use of its current 
42 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

authority to request funding to conduct demonstration projects. Instead, OPM continues to 

require agencies to fund these projects. Since funding problems may be a primary disincentive for 

agencies contemplating demonstration projects, 

seeking funds for the projects is one area in which 

OPM could make demonstration projects more 

attractive to agencies.

With regard to research (as opposed to demonstration) projects, there is not a great deal of work currently being done. Most of the research efforts 

conducted by OPM are now done on behalf of 

agencies on a reimbursable basis. There also have 

been a number of “special studies” conducted over 

the last ten years which, according to OPM, were 

undertaken as a result of congressional interest, 

findings from oversight reviews, and analyses of 

trends in HR management. OPM has made the 

results of these studies available on its web site 

under “Special Studies.” (We understand there are 

plans to index study reports under the heading of 

“Research,” which should make it easier for agencies interested in conducting a research study under 

the research and demonstration authority to find 

help while consulting the web site.)

To summarize, there are still problems with the 

demonstration project authority, most notably the 

cumbersome approval process. And while OPM 

has yet to persuade Congress to pass legislation that 

would bring about improvements in the demonstration project authority, demonstrations continue 

to be undertaken, often as a result of congressional 

interest in addressing a particular issue within an 

agency. This piecemeal approach to implementing 

HRM improvements is not the way CSRA envisioned the process to work, and is unlikely to provide the greatest benefits for the largest number of 

agencies. Therefore, OPM’s current legislative initiatives are encouraging, as is the fact that OPM has 

been able to gain approval for the demonstration 

project involving the acquisition workforce, the 

first demonstration to cross organizational lines. In 

addition, OPM has informed us that it is considering ways to integrate research efforts and develop a 

broad research framework to support more HR 

innovation and flexibility. More projects such the 

acquisition workforce initiative should help to persuade agencies and the Congress that demonstrations can be effective in helping solve problems and 

introducing new HR tools and concepts on a governmentwide basis—certainly a more effective 

approach for agencies than confining the search for 

solutions strictly to their own organizations.

Equal employment opportunity. OPM’s major 

role with regard to equal employment opportunity 

is to ensure that the Government operates a civil 

service system that is merit-based and also seeks to 

represent the general population that it serves. 

During its first decade in operation, OPM 

attempted to balance the dual aspects of this role by 

the “development of valid examining or selection 

devices and the encouragement of affirmative 

action and equal employment opportunity efforts 

consistent with the merit principles.”73 At the time 

of our report on OPM’s first ten years, the Professional and Administrative Career Exam (PACE) a 

centralized, valid selection procedure, had been 

eliminated due to challenges that the exam exhibited racial and ethnic bias. With the elimination of 

the PACE (and the shift of responsibility to the 

agencies for creating merit-based selection procedures to fill jobs formerly covered by the PACE), 

OPM was devoting only limited resources to the 

continued development of merit-based selection 

systems.

Although OPM has developed merit-based selection instruments and systems during the past 

decade, those products are offered to agencies 

strictly on a reimbursable basis. And, as we have 

noted previously in this report, this policy may put 

those products out of reach for agencies with limited resources. Such an arrangement may not be in 

73 Op. cit., “U.S. Office of Personnel Management and the Merit System: A Retrospective Assessment,” p. 27.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 43

the best interests of the Government—both in 

terms of selecting the best candidates and achieving 

a Federal workforce representative of the nation it 

serves. Under the circumstances, then, how good 

are current selection instruments and systems in 

terms of achieving the quality and representation 

we strive for in the Federal workforce?

Over the past several years, the Board has looked at 

selection methods agencies are using—including 

those developed and administered both with and 

without OPM involvement—with an eye towards 

both merit-based considerations such as the quality 

of hires when a particular method is used, as well as 

the representation of women and minorities resulting from the use of the various methods. For example, in 1994 the Board reported the following 

concerning individuals hired via different methods 

for professional and administrative positions in 

1992:

• Compared to other methods, OPM-generated 

certificates (primarily referral lists of candidates 

who had responded to specific job vacancies) 

yielded the lowest percentage of minorities hired 

(around 16 percent), with quality levels of all 

hires via this method viewed as “average.”

• 19 percent of employees hired via agency-generated certificates were minorities. The quality levels of hires through agency-generated certificates 

was below average for grades 5-7, but improved 

for grades 9 and above.

• For direct hire methods, the trend in quality was 

opposite that found for agency-generated certificates: the higher the grade, the lower the quality. 

Twenty-three percent of direct hire employees 

were minorities.

• Employees hired via the Outstanding Scholar 

program were rated as above-average. Only 17 

percent of the hires were minorities, however. It 

is interesting that this method was found to be 

among the least effective for increasing representation of minorities, even though it was created 

as a means of addressing imbalances in the hiring 

of African Americans and Hispanics.

• The Cooperative Education Program resulted in 

26 percent minorities hired, with all hires being 

rated as about average.

• Ratings of quality were mixed on hires made via 

internal selection (merit promotion).

It is apparent that the results of these methods vary 

in terms of both candidate quality and effectiveness 

in hiring members of various racial and ethnic 

groups. However, some methods do appear to work 

better than others in helping agencies achieve the 

goal of maintaining a highly qualified workforce 

representative of America.

The Board has also looked at the overall progress of 

Federal agencies in achieving a workforce that 

reflects the nation’s diversity. In a 1996 study the 

Board reported that the Federal Government 

“employs a higher percentage of African Americans 

and Native Americans than are employed in the 

civilian labor force, and about as many Asian 

Pacific Americans,”74 but that Hispanics are underrepresented. The Board also noted that there has 

been progress in increasing representation of 

minorities in entry level hiring, and there has been 

even more progress once minorities enter Federal 

service, with more holding top-level positions than 

ever before. However, since parity has not been 

fully achieved, it is still important that OPM as 

well as individual agencies continue to be diligent 

in monitoring the progress of minority recruitment, hiring, and promotion rates in the Federal 

service to ensure that minority groups ultimately 

reach full representation in all occupational groups 

and grade levels.

OPM is engaged in a number of programs with 

that goal in mind. As noted above, OPM’s 

approach to this issue has been twofold: developing 

valid selection methods and promoting affirmative 

74 U.S. Merit Systems Protection Board, “Fair and Equitable Treatment: A Progress Report on Minority Employment in the Federal Government,” August 

1996, p. 61.
44 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

action and equal opportunity recruitment and hiring programs. Over the past ten years, OPM has 

emphasized the latter of these two approaches, promoting a number of special emphasis initiatives 

such as the following:

• Nine-Point Plan for improving the representation 

of Hispanics in the Federal Government. This 

plan, launched in 1997, offers agencies a blueprint for improving the representation of Hispanics in their workforces by establishing 

partnerships with Hispanic organizations and 

creating innovative ways of recruiting, developing, and retaining Hispanics in their agencies. 

More than 2,000 Hispanics have been hired into 

the Federal workforce as a result of this initiative.75

• Guide to Recruiting and Retaining Women in the 

Federal Government. Published in June 1998, 

this guide suggests HRM approaches and tools 

agencies can use to design strategies to recruit 

and retain women.

• Plan for Employment of People With Disabilities in 

the Federal Government. This initiative launched 

by the President and OPM on October 16, 

1999, is a plan to hire and promote persons with 

disabilities at all levels of the Federal workforce, 

from entry-level jobs to the senior executive service. The plan provides both a framework for 

departments and agencies to use in recruiting, 

hiring and retaining more persons with disabilities, and a guide with information and references 

to aid departments and agencies in their efforts 

to hire and advance individuals with disabilities.

While the OPM staff devoted to developing and 

promoting these initiatives is relatively small (fewer 

than ten employees), they have managed to create 

considerable publicity for these initiatives, and have 

helped to keep the programs in the forefront 

throughout the Federal community. But many 

agencies that are committed to achieving a diverse 

workforce are still struggling to meet that goal. As 

we noted in our study addressing the barriers to 

Hispanic participation in the Federal workforce,76

numerous factors can affect the representation of 

protected groups, and agencies must be made aware 

of these factors and be given ample guidance and 

assistance in overcoming them. For example, the 

education levels and geographic concentration of 

Hispanics in the west and southwest are factors that 

contribute significantly to Hispanic underrepresentation in the Federal workplace, and it’s important 

that those who devise plans to overcome Hispanic 

underrepresentation understand those facts. OPM’s 

assistance in identifying the complex factors that 

create or contribute to underrepresentation could 

be of considerable assistance to agencies that are 

trying to accurately target their own scarce 

resources to address the real barriers to increased 

diversity. But OPM’s limited resources do not allow 

it to provide agencies very much assistance in actually locating, recruiting, hiring, and developing 

employees in protected groups beyond the guidance provided by the initiatives mentioned above 

and the development of selection instruments and 

systems that agencies purchase from OPM.

Performance management. The Civil Service 

Reform Act mandated that pay increases for Federal employees be based on the quality of their performance. CSRA also included provisions intended 

to make the removal of poor performers easier. 

Congress left it up to individual agencies, however, 

to design their own performance appraisal systems 

to assist in carrying out these mandates. Agency 

performance management systems had to be 

approved by OPM, and OPM was to provide technical assistance to the agencies in designing these 

systems, developing standards for evaluating system 

effectiveness, and monitoring the systems. The 

agencies’ performance management systems had to 

75 “OPM Honored for Hispanic Initiative,” The Federal Employees’ Edge, FPMI, September 16, 1999.

76 U.S. Merit Systems Protection Board, “Achieving a Representative Federal Workforce: Addressing the Barriers to Hispanic Representation,” Washington, 

DC, September 1997.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 45

base performance appraisals on job-related performance standards that employees were encouraged 

to participate in developing. The results of the 

appraisals were to be used not only for rewarding 

employees, but for training, promoting, reassigning, reducing in grade, retaining, and removing 

employees. A separate merit pay system was established for supervisors and management officials in 

GS grades 13-15, with specific guidelines for funding pay increases based on their performance. 

Career executives were also rewarded under a separate system.

Some of the most dramatic changes to take place 

over the last 20 years have concerned the merit pay 

system. In 1984, the merit pay system, originally 

established for GS 13-15 management officials, was 

modified and renamed the Performance Management and Recognition System (PMRS). At the 

time of our last OPM retrospective report, PMRS 

was due to expire at the end of September 1989.77

Our report noted that there were persistent problems with the operation of PMRS, especially concerning employees’ acceptance of the system and 

the system’s inability to assess performance to the 

level of accuracy needed to distinguish among 

employees in making awards. PMRS was extended 

several times until it was finally terminated in 

1993.

In 1995, the regulations were again revised, decentralizing the performance management program 

further to the agencies to develop systems to meet 

their own needs. (This occurred at the same time 

that OPM was undergoing fairly dramatic downsizing and was decentralizing HR authorities in 

many other areas, as well.) The appraisal system 

approval process was streamlined, and agencies 

were allowed to develop performance appraisal systems with anywhere from two to five summary rating levels.

In the years since this decentralization OPM has 

taken a hands-off approach toward oversight of 

agencies’ performance management programs. 

Although we had suggested in our 1989 report that 

OPM take a more direct approach to assisting 

agencies (e.g., targeting deficient agencies for technical assistance) the deregulation and decentralization movement in Federal HR, as well as the 

shrinking of staff at OPM, have made such direct 

involvement either unnecessary or unfeasible. To its 

credit, OPM has encouraged flexibilities in policies 

and regulation, and has provided useful materials 

to assist agencies in developing performance management systems that they can use to manage their 

workforces more effectively. OPM is currently 

studying the effectiveness of the pass/fail performance rating system in use in many Federal agencies today. In an attempt to share information and 

advice with as wide an audience as possible, OPM 

uses many vehicles to disseminate information 

about performance management, including seminars and conferences, newsletters, the internet, satellite broadcasts, and CD ROMs.

OPM has done an especially good job of information dissemination on the topic of poor performers. 

Dealing with poor performers in the Federal workforce has been a major focus in recent years, both 

by OPM and the Board. As the Board noted in a 

1995 issue paper, the CSRA goal of making it easier for managers to remove poor performers has not 

been achieved.78 This assessment has been reiterated more recently in reports published by both 

OPM and MSPB.79 Both the Board and OPM 

agree that the proportion of Federal employees who 

are performing poorly is not as great as conventional wisdom might suggest, but because the problem has far-reaching consequences for the 

organizations employing the poor performers, both 

77 Op. cit., “U.S. Office of Personnel Management and the Merit System: A Retrospective Assessment,” p. 27. 

78 U.S. Merit Systems Protection Board, “Removing Poor Performers in the Federal Government,” Issue Paper, September, 1995.

79 U.S. Office of Personnel Management, “Poor Performers in Government: A Quest for the True Story,” Washington, DC January 1999; U.S. Merit Systems 

Protection Board, “Federal Supervisors and Poor Performers,” Washington, DC, July 1999.
46 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

agencies believe action must be taken to deal more 

effectively with the problem.

In this regard, OPM has spent much time and 

effort advising agencies on handling performance 

problems, with an emphasis on acting before the 

problems get to the point at which formal action 

must be taken against employees. OPM’s dissemination of information and advice via conferences, 

publications, their web site, and CD ROMs represent an impressive educational effort on this important topic.

OPM’s customer satisfaction survey revealed that 

almost three-quarters of the HR specialists participating are satisfied with OPM’s information sharing and technical assistance in the areas of poor 

performance and disciplinary and adverse actions. 

Likewise, 73 percent are satisfied with OPM’s guidance materials on performance management.

Our interrogatory survey of the agencies confirms 

that, by and large, agencies recognize and appreciate OPM’s efforts in the area of performance management. They are especially impressed with 

OPM’s web site assistance and CD ROMs. But 

many continue to struggle when dealing with performance problems, and acknowledge that there is 

only so much that OPM can accomplish through 

regulations, policies, and advice. This comment 

from a participant in our interrogatory survey illustrates a common viewpoint:

Managers still feel that the process for removing 

poor performers is too cumbersome and time-consuming, and too frequently overturned on appeal, 

or settled for the sake of expediency. Despite all of 

the flexibilities provided in the area of performance management, many supervisors still view 

performance appraisals as a yearly paper chore, or 

a means to distribute performance award money, 

and nothing else. This is an issue that needs to be 

addressed by agency management and is not easily 

addressed through regulations.80

The Board believes that OPM should continue its 

efforts to educate and assist agencies. Given its limited resources in this area, however, efforts should 

be focused on the vehicles that have shown the 

greatest promise in reaching those in need of information. Based on responses to our agency questionnaires, publications (especially newsletters), the 

internet, and CD ROMs appear to be working 

well.

Some of the issues central to performance management are being examined by OPM’s Workforce 

Compensation and Performance Service in connection with the agency’s total compensation review. 

The fact that OPM is including the pay for performance issue in this project bodes well for future 

progress in the use of compensation as a tool for 

managing employee performance.

Retirement and insurance. The retirement and 

insurance area is one in which OPM has achieved a 

number of program and operations improvements, 

making significant strides over the last several 

decades. Twenty years ago, the functions performed 

by today’s Retirement and Insurance Services group 

came under the Compensation Group. The organization’s name was first changed to Retirement and 

Insurance Group, and then to Retirement and 

Insurance Services to reflect the customer service 

orientation that began about ten years ago and has 

grown steadily ever since. Until then, the organization’s role combined fiduciary and customer service 

responsibilities. However, prompted by Congress 

(and likely propelled by popular management techniques of the day), customer service began to grow 

in importance and emphasis. The fiduciary role 

still was—and is now—critical. But what’s been 

done to implement customer service improvements 

has been dramatic.

Retirement. For example, there is a congressional 

requirement for Federal agencies’ retirement pack80 Although some may believe that agency actions taken against poor performers are frequently overturned, this is not, in fact, the case. When employees appeal 

performance-based or adverse actions, their agencies’ decisions are upheld in the vast majority of cases.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 47

ages to arrive at OPM within 30 days of an 

employee’s retirement, so that retirees don’t have to 

wait months before receiving annuity payments. 

That goal is normally met. But in an effort to provide better customer service, OPM has sought ways 

to help agencies exceed the goal, including initiatives such as the introduction of electronic filing.

An important aspect of OPM’s focus on customer 

service is the modernization of the tools used by 

OPM employees. OPM has also modernized the 

methods its employees use to communicate with 

customers. There are now toll-free numbers that 

annuitants can call with specific questions and web 

site locations annuitants can consult to get general 

information quickly. Many—if not most—of the 

changes and transactions customers want can now 

be initiated by the customers themselves by phone. 

This is quite a contrast to the situation 20 years 

ago, when OPM’s specialists could not process any 

requests for action without a signature on paper. In 

fact, it was not uncommon then for a bereaved 

spouse to wait six months for a check, whereas 

today, a phone call can initiate immediate benefits 

payments. One of our agency survey respondents 

described the current situation this way:

OPM’s automation of retirement package processing has greatly improved service to new retirees. 

First estimated checks and, subsequently, regular 

retirement payments are delivered to new retirees 

in a much shorter time than 20 years ago.

And OPM continues to seek advances in customer 

service for retirees and prospective retirees. Currently under development are a retirement information booklet that is personalized for the 

individual employee and access to information and 

accounts through the internet.

Like agency officials, retirees have been very positive about these changes. OPM’s recent customer 

satisfaction surveys of annuitants have shown fairly 

high levels of satisfaction—much higher than even 

five years ago, when the staffs were larger and fewer 

annuitants were served. OPM’s surveys of HR specialists also reveal positive views about OPM’s 

information sharing and technical assistance in the 

retirement area. And the Board’s own agency questionnaires indicate that Federal HR offices have 

noticed improvements in the speed and accuracy of 

retirement claims-processing by OPM. Most of the 

agency HR offices responding to our survey were 

also very positive about the impact that OPM’s 

automation efforts had had on their own 

workloads—annuitants are now calling OPM with 

many of the inquiries that used to be addressed to 

the personnel offices. A few noted, however, that 

annuitants sometimes had difficulty accessing the 

toll free numbers because of the heavy volume of 

calls. Several also mentioned their frustration with 

the current backlog of retirement disability applications. Nevertheless, the prevailing attitude towards 

OPM’s retirement assistance is quite positive.

Insurance. In the other massive benefits program 

that OPM administers—insurance—there have 

also been major changes. One such change that has 

occurred over the last couple of decades is the place 

occupied by the Federal employee health insurance 

program on a national level. Formerly, OPM was 

not viewed as a national player in insurance programs. The Federal health insurance program was 

insular, standing alone without connections or 

influence with similar programs in other, non-Federal organizations. Now the insurance program has 

captured the interest of private sector employers 

and health maintenance organizations. In fact, during the health care debates of the late 1980s and 

early 1990s the Federal program was often held up 

as a model for other employers. As the twenty-first 

century began, OPM emerged as a significant 

source of influence in the health care field.

What has led to this position of prominence? One 

of OPM’s accomplishments in this area has been 

the introduction of elements of managed care into 

the Federal fee-for-service programs (e.g., preferred 

providers and disease management features). This, 

OPM believes, has resulted in premium increases 

several percentage points below those of plans 

found outside the Federal sector. OPM also tries to 
48 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

stay on top of the plans’ specific inclusions and 

exclusions. And when an administration seeks particular improvements in health care it tries to 

ensure that Federal plans include coverage (e.g., 

annual mammograms for women).

A recent initiative in which OPM has been a key 

player is the effort to make long term care insurance available to Federal employees at group rates. 

In September 2000 the Long Term Care Security 

Act was signed into law. OPM currently is reviewing proposals from the insurance industry, and is 

on target to have a long term insurance program in 

place by October 2002.

In terms of customer service in the insurance arena, 

OPM has recently tested a number of initiatives to 

assist customers. For example, there are web site 

linkages to programs that help employees determine the specific features that would be most 

important in a health care plan for them and their 

families. The programs then provide information 

about available plans based on those critical features. This service gives employees relevant information to assist them in making decisions about 

their health care plans, as opposed to having to 

study numerous, detailed brochures in search of 

information.

OPM has also tried to provide leadership to their 

other customers, the agency HR specialists who 

advise Federal employees concerning their rights 

and obligations with regard to retirement and 

insurance. Because the Federal retirement system 

(and to a lesser extent the insurance system) are 

continually affected by new legislation, it is critical 

that Federal employees have accurate and current 

information available to inform the decisions that 

will have a great impact on the quality of their lives 

and those of their families. OPM has attempted to 

devise ways to better educate Federal benefits specialists, including the publication of FERS and 

CSRS handbooks, CD ROMs, videos, and pamphlets, as well as live, interactive satellite broadcasts. And according to OPM’s own customer 

satisfaction survey, the efforts to make pertinent 

information readily available to benefits specialists 

have been successful: around 90 percent of HR specialists responded that they were satisfied with the 

information concerning health insurance open season and life insurance coverage, and 88 percent and 

86 percent, respectively, were satisfied with OPM’s 

technical assistance in the two areas. With regard to 

OPM’s guidance materials, 67 percent rated the 

Benefits Center CD-ROM as satisfactory, and 91 

percent rated the FEGLI Handbook as satisfactory.

Retirement and insurance is such a technically 

demanding specialty that the question often arises 

whether HR specialists who work in this area 

should be certified. Although certification of specialists in all areas of HR has been debated, it is an 

especially compelling issue for benefits specialists 

since the advice they give can have a dramatic, farreaching impact on the physical and financial wellbeing of Federal employees and their families. With 

the importance and growing complexity of the 

field, there is increased interest in professionalizing 

it. Since at least the mid-1990s, OPM has been 

looking at this issue, examining how other professionals deal with certification requirements (and 

especially how they handle keeping up with continuing changes). Nothing has yet been implemented in this area, however.

When we asked agencies their views on certification of benefits specialists we found mixed opinions, but the majority favored certification, 

primarily because of the complexity of the field and 

the critical nature of the advice and assistance provided. As one agency official put it:

Correct benefit information for employees is too 

important to be left to chance because it permanently affects [employees’] retirement decisions, as 

well as those of their survivors. Now, everyone is 

not receiving the same information due to a lack 

of standardization in the guidance provided. A 

certification program would provide consistency 

and greater reliability.

There were mixed opinions about what OPM’s role 

should be in the certification process, if certification were to be required. The respondents were 
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 49

about evenly split among those who thought OPM 

should be responsible for doing everything (setting 

the standards for certification, developing and conducting the training, and certifying the specialists), 

and those who saw OPM as responsible for setting 

the standards (with input from the agencies) and 

designing training courses, with the agencies themselves retaining responsibility for the actual certification.

Those who did not support the idea of HR certification worried that the agencies wouldn’t be able to 

afford such a program, and believed the practicalities of a certification program (such as how to 

ensure continual post-certification learning) would 

be very difficult to manage. A few also noted that 

all HR specialists—not just those working in the 

retirement and insurance area—need to have certification programs to ensure the quality of their 

work.

In summary, OPM is to be commended for the 

progress made over the last decade in the area of 

retirement and insurance services. It is apparent 

that increased technological advances (e.g., the 

ability to automate so much of what had previously 

been done by hand) and the desire to be more 

responsive to the customers have driven the 

changes that we have seen. Because this area is 

based upon myriad complex rules and regulations 

that are constantly changing, OPM will continue 

to be challenged to find effective ways of communicating directly with employees to ensure that they 

have the information they need to make educated 

decisions about their benefits and their future.

SES and executive development. Created by the 

CSRA, the Senior Executive Service (SES) was 

intended to provide the Federal Government with 

the most highly motivated and highly competent 

leadership available. Whereas previously there had 

been over 60 separate personnel authorities for 

executive positions, the SES replaced these with 

one unified system. The CSRA established goals 

for the SES to ensure that the executive service 

would be responsive to the needs, policies, and 

goals of the nation. These goals called for the SES 

to be administered in ways that ensured that executives would be fairly judged and fairly paid; that 

they would be held responsible for the effectiveness 

and productivity of their employees; and that they 

would be guided by the public interest and spared 

improper political influence.81 The CSRA also gave 

Federal agencies greater authority for managing 

their executive resources. OPM was tasked with 

providing leadership, guidance, and oversight of 

the SES, as well as providing leadership in the 

development of Federal managers (executives as 

well as lower level managers). OPM has defined its 

own role in executive resources this way: “to 

improve the performance of Government by providing leadership, policy development, program 

oversight and consultative services in the selection, 

development, and management of Federal executives who are strong leaders with a broad corporate 

perspective and a commitment to public service 

values and who are prepared to meet the leadership 

demands of the 21st century.” 82

As part of its oversight of the SES, in 1992 OPM 

re-examined the executive core qualifications (competencies) originally defined for selecting individuals into the SES, and decided that the competencies 

required of candidates were no longer up-to-date. 

After conducting a large-scale survey of Federal 

supervisors and managers, OPM revised the qualifications based on the survey research, and has continued to modify the qualifications since then to 

better reflect current thinking concerning effective 

Federal leadership.

The executive core qualifications are used not only 

in the selection of managers into the SES program, 

but are incorporated into SES development as well. 

81 US MSPB, “The Senior Executive Service: Views of Former Federal Executives,” Washington, DC, 1989, p. 3.

82 US OPM mission statement.
50 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

The centerpiece of OPM’s executive development 

program, the Federal Executive Institute (FEI) 

training program (actually created before the passage of CSRA) was developed by OPM to ensure 

that agency executives have the requisite management and leadership competencies, as well as exposure to and appreciation of the broad perspectives 

basic to effective performance as Federal executives.

According to OPM, the mission of the FEI has 

remained very consistent over the years. Although 

this mission—to provide senior managers with a 

broad view of their role in the Government—may 

have remained constant, the curriculum has 

changed substantially. FEI continually updates its 

program offerings focused on four broad themes: 

personal leadership in Government, transforming 

Government organizations, policy in a constitutional system, and global perspectives and public 

action. FEI uses the executive core qualifications to 

develop each of its core curricula, and to ensure a 

linkage among courses. In the past few years, FEI 

has also been making increased use of technological 

advances in training, to provide program support, 

e.g., online registration, pre-program assignments, 

evaluations, and web access to research.

In 1998, OPM drafted a framework for revising 

the SES. Although a wide-ranging OPM study of 

the SES had concluded that the system’s original 

premise was sound,83 the reviewers had found a 

number of system shortcomings that needed attention. Some members of the pubic administration 

community have, in fact, pointed out that the original promise of the SES has yet to be fully met. In a 

grant report on the SES, University of Delaware 

political scientist Mark Huddleston wrote, “The 

U.S. Office of Personnel Management and other 

concerned parties need to work to transform the 

SES into something more than a pay system . . . ” 

Dr. Huddleston added that OPM’s SES framework 

has begun the transformation process.84

The draft framework was intended to stimulate discussion of the SES including those issues that had 

been identified as problems or were, at a minimum, 

areas for concern. The framework included proposals in four areas: redefining and restructuring the 

SES, enhancing executive development, strengthening performance management, and increasing 

staffing flexibilities. OPM circulated the draft to 

numerous stakeholders, such as SES members, HR 

officials, the Senior Executives Association, NAPA, 

and Federal Executive Board members, among others. Based on the reactions to the framework, OPM 

has recommended a number of legislative changes, 

some of which have been enacted (for example, 

Congress increased the amount of Presidential 

Rank Awards). No consensus was reached about 

structural changes, but stakeholders agreed further 

study is needed. OPM does report progress in areas 

that don’t need legislative change and can be 

addressed administratively through executive 

orders, regulations, or policy guidance. OPM also 

plans to keep working for legislation to make other 

changes supported by the various stakeholders.

What do OPM’s customers think about its efforts 

in the area of executive resources? Interestingly, 

OPM’s own survey data show fairly large differences in opinion between HR specialists and HR 

directors, with HR directors being much more positive. For example, 70 percent of the HR directors 

are satisfied with OPM’s policy leadership in the 

area of SES and other executive resources programs, and 82 percent are satisfied with their agencies’ opportunity to get involved in policymaking 

in this area. As can be seen in the table below, how83 McLaughlin, Judy, “A Generation of Experience: Proposals to Improve the SES,” US OPM, Washington, DC, October 1998. 

84 Huddleston, Mark W., “Profiles in Excellence: Conversations with the Best of America’s Career Executive Service,” The Pricewaterhouse Coopers Endowment for the Business of Government, November 1999, p. 4.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 51

ever, those who administer these programs—the 

HR specialists—don’t see such a rosy picture.

These respondents were somewhat more positive 

about OPM’s revised SES qualifications guide 

which defines the competencies and characteristics 

that executives need. Some 66 percent of HR specialists said they were satisfied with the guide. 

However, only 51 percent expressed satisfaction 

with their agency’s opportunity for involvement in 

OPM’s initiative to revise executive core qualifications and only 47 percent were satisfied with 

OPM’s policy leadership in drafting the SES framework.

When we queried HR offices concerning the role 

that OPM has played in executive resources, their 

views were mixed, but most were fairly favorable 

about OPM’s effectiveness in leadership of policy 

direction and technical guidance and assistance. 

Most HR offices were supportive of the efforts that 

OPM had made in this area, but felt that there was 

still more to be done. These comments by interrogatory survey respondents illustrate the diverging 

viewpoints on OPM’s overall performance in this 

area:

OPM has attempted to fulfill [its] role through 

such initiatives as the draft SES framework, but 

political interests always seem to defeat significant 

change in the end. There have been numerous 

workgroups recommending changes in executive 

resources management, but serious changes are 

usually rejected in favor of superficial modifications. Maximization of agencies’ flexibilities 

almost always requires legislative change, and as a 

result, OPM has very little leeway.

OPM has been very successful in providing leadership and policy direction while at the same time 

maximizing agencies’ flexibilities in managing 

executive resources. OPM’s communication network is strong—emails, faxes, regularly scheduled 

workgroups and meetings of the Executive 

Resources Network combine for exchanges of 

information which are timely, consistent, and 

thorough. OPM’s lead in developing the framework for improvements in the SES is testimony to 

its leadership role in providing increased flexibilities to agencies while supporting a corporate SES.

When asked about one of the more recent changes 

that OPM had made in the program—the latest 

modification of the executive core qualifications—

most respondents were also positive. Several 

expressed the belief that the revised qualifications 

better matched their own agency emphasis on executive leadership, and they appreciated the fact that 

there was a closer linkage between these qualifications and their agencies’ Government Performance 

and Results Act (GPRA) strategic plans. Some of 

the respondents indicated that while they had no 

problems with the revisions that had been made to 

the qualifications, they believed that there was a 

problem in the QRBs’ evaluation of the core qualifications of their SES candidates. As one respondent complained, the QRB process is “paper 

intensive, has never been clearly validated, and 

relies too much on form over substance.” Since 

1997 OPM has provided 210 agency-specific or 

general audience briefings on how to prepare executive core qualifications narratives. Nonetheless, 

respondents to our interrogatory thought that 

OPM should provide clearer guidance to nominees 

on preparing their qualifications statements, or 

eliminate the QRB process and allow agencies to 

evaluate candidates’ qualifications themselves.85

Table 1. Percent of human resources specialists 

satisfied with OPM information sharing and OPM 

technical assistance for various program features

Program Feature 

OPM 

Information 

Sharing

OPM 

Technical 

Assistance

SES/senior level space allocations 49 47

SES qualifications review boards/

candidate development programs 54 52

Noncareer and limited SES 

appointments 50 47

SES compensation and performance 

management 55 51

Presidential Rank Awards Program 50 47

85 Final OPM regulations did not provide for delegation of the QRB process to agencies because, according to OPM, there was no overwhelming support for it 

from their stakeholders.
52 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

Respondents offered a variety of suggestions for 

improving the SES program (most of which, no 

doubt, OPM has heard and considered or is considering). Some of these included:

• The certification process should be repealed.

• Staffing flexibilities should be increased for SES 

limited term appointments.

• OPM’s SES candidate development quarterly 

training seminars should be reinstated.

• OPM should take a more active role in succession planning and encourage agency succession 

planning models.

• Continuous and systematic development for 

managers and leaders before they become SES 

members is needed.

• Team management approaches should be established and senior executives should be subject to 

more rotation (i.e., job mobility as intended by 

CSRA).

• Competencies should be expanded and 

improved.

It appears that OPM has paid ample attention over 

the years to ensuring that the SES system is operating as intended by CSRA. Although some of the 

aspects of the system, such as executive mobility 

and SES sabbaticals, have not been implemented as 

envisioned by framers of CSRA, in general the system appears to be functioning well and OPM has 

worked to overcome some of the system’s persistent 

problems. However, since the workforce (and the 

way we do business) is constantly changing, the 

SES members will need to continuously adapt to 

these changes and develop new competencies in the 

years to come. It behooves OPM to continue communicating often with its stakeholders in the SES 

arena (e.g., agencies’ political leaders, senior executive interest groups, and senior executives themselves) in order to ensure that the Government’s 

highest level managers continue to be up to the 

challenges that lie ahead.

Investigations. Investigations is an area within 

OPM that has undergone tremendous change over 

the last decade. These changes have been driven by 

world events as well as events within the Federal 

Government. And the changes brought about in 

Investigations are considered by OPM to be a 

major success story.

OPM’s Investigations Service is responsible for 

conducting background investigations on new (or 

prospective) Federal employees on behalf of the hiring agencies. Before 1994, this organization typically increased or decreased its staff according to 

projected workloads (as estimated from workload 

history). The Investigations Service worked on a 

cost-recovery basis, charging agencies for the investigations performed. When the early 1990s 

brought an end to the Cold War, Federal agencies 

began to downsize and to downgrade security level 

requirements. This resulted in a dramatic drop in 

workload for Investigations Service, and by 1993, 

the investigations operations of OPM were losing a 

million dollars a month. But downsizing and other 

resource reductions by OPM brought the operation 

back into the black by 1994.

In spite of the fact that Investigations Service was 

showing a profit by 1994, the administration 

decided to privatize the organization. Functions 

such as policy development for the program as well 

as contracting oversight and assistance to the agencies were retained at OPM. The other (operational) 

aspects of Investigations Service were privatized. 

The privatization was accomplished by the establishment of an employee stock ownership plan 

(ESOP), named US Investigations Service, Inc., or 

USIS. USIS, which was to be staffed by former 

OPM employees who had been displaced from 

their Federal jobs at OPM through a reduction-inforce, offered workers similar pay, the same duties, 

the same location, and the same retirement plans as 

their OPM jobs had had, and they received severance pay from OPM. USIS occupies OPM space 

and is also able to conduct work for organizations 

other than the Federal Government, including state 

and local governments.
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 53

OPM is proud of the privatization efforts in Investigations, and has saved over 75 million dollars during the first five years of the arrangement. USIS 

employees have received increased stock options 

and large bonuses. As far as the agencies’ interaction with the investigative organization is concerned, it has been a smooth and invisible 

transition. Just as they did before 1994, agencies 

still send their cases for investigation to Boyers, 

Pennsylvania, and get them back from Boyers. 

Agencies pay for the investigative work done 

according to how quickly they want the investigation completed and the type of investigation being 

conducted.

To help ensure that the ESOP got off to a stable 

start, the original contract between OPM and 

USIS to do the Federal Government’s investigations work was awarded in 1996 as a sole source 

contract for five years (with three years work guaranteed, and two years optional after that). In 1998, 

USIS was again awarded the contract to do Federal 

background investigations, and has continued to 

grow, entering into a $200 million-plus contract 

with the Department of Defense in 1999, and 

increasing its staff to over 1,800 employees in 163 

locations by 2000. The organization’s work has 

been recognized by the National Partnership for 

Reinvention (Hammer Award) and the Ford Foundation.

In an era of downsizing and smaller staffs, it might 

seem surprising that the ESOP has grown over the 

years. The growth can be attributed to several factors. First is the fact that Federal agencies whose 

staffs have been cut but whose workload remains 

stable or growing must rely on contractors for the 

work they might have previously done in-house. 

Although OPM doesn’t have personnel or administrative authority over contractors, agencies often 

require background investigations for contract 

employees. Thus, investigations work has not 

decreased as the Federal workforce has downsized. 

In addition, many agencies have undergone (and 

continue to go through) reorganizations, which can 

result in the need for background investigations 

when employees are assigned work that requires 

higher level clearances.

Do the agencies who deal with USIS consider the 

changes that have occurred to be beneficial ones? 

The majority of agencies responding to our interrogatory survey indicated that the quality, timeliness, and costs of the investigations were about the 

same as when OPM was responsible for conducting 

them. OPM’s own survey data currently indicate 

very high levels of satisfaction with the quality, 

timeliness, and cost of investigations. Data concerning the thoroughness of the investigations (also 

compiled by OPM) show improvements since 

privatization, as shown in Table 2.

Nonetheless, results of our interrogatory survey did 

find that some agencies were not happy with the 

quality of the investigations since USIS took them 

over. These agencies indicated that the quality of 

the investigations had deteriorated, and noted a 

lack of detail regarding the backgrounds of the subjects of the investigations in some of the investigative reports. As one respondent recalled, “OPM 

pursued issues in a more aggressive manner, contained more knowledgeable sources, and addressed 

issues in the investigative report more clearly.” In 

spite of these concerns, the overall reaction to the 

change seems to be favorable.

Table 2. Issue Characterization for Completed Single Scope Background Investigations (in percentages)

1995/96 1997 1998 1999 2000 2001

No issues identified 21.2 18.2 20.8 16.2 15.5 9.4

No actionable issues 26.6 29.3 21.9 15.2 15.7 14.7

Overall issues developed 52.2 52.5 57.3 68.6 68.8 75.9

Substantial/major issues 6.7 5.6 6.0 10.8 10.1 12.4

Source: U.S. Office of Personnel Management

A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 55

Appendix 2 — Interrogatory Survey 

and Participating Agencies

These departments and independent agencies responded to the questionnaire that follows:

Department of the Air Force

Department of the Army

Department of Commerce

Department of Education

Department of Energy

Environmental Protection Agency

General Services Administration

Department of Health and Human Services

Department of the Interior

Department of Justice

Department of Labor

National Aeronautics and Space Administration

National Labor Relations Board

Department of the Navy

Small Business Administration

Social Security Administration

Department of State

Department of the Treasury

Department of Veterans Affairs

Survey Concerning the Activities of the U.S. Office of Personnel Management

General questions

1. Among the statutory responsibilities assigned to 

OPM are: delegating personnel management 

authorities to agencies; establishing and maintaining an oversight program; conducting or 

facilitating the conduct of research and demonstration projects; executing, administering and 

enforcing civil service laws, rules and regulations; and providing leadership and guidance to 

the Federal civil service system. In your opinion:

a. Are these still the appropriate roles for OPM, 

i.e., are there any that you would add or 

delete?

b. Please give us your views on OPM leadership 

in developing policy for the areas covered by 

those roles.

c. Please give us your views on OPM leadership 

in providing technical advice and assistance in 

those areas.

2. Are there any services or assistance you would 

like to receive from OPM that you aren’t currently receiving? If yes, what are they?

3. What role, if any, should OPM have in ensuring 

the competency of federal personnel specialists?

4. To better disseminate information, OPM has 

introduced technical innovations such as satellite 

broadcasts, CD ROM’s, videotapes, and the 

OPM website. In your opinion:

a. How useful are these methods of communication?
56 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

b. Are there other methods of communication 

that OPM uses that have proven useful (for 

example, meetings with stakeholders, email, 

faxes)? Please specify.

c. Do OPM’s methods of disseminating information and communicating with you meet 

your needs? If not, please explain.

5. What should OPM be doing that it is not?

6. What should OPM not be doing that it is?

7. If there are any parts of title 5 from which your 

department or agency believes it should (or 

would like to) be exempt, please identify them 

and explain why.

Reimbursable Services

OPM offers the services in this table on a reimbursable basis. Please check any of the services you have obtained from OPM on 

a reimbursable basis, and rate your degree of satisfaction with each service received. For any services for which you were only partially or not satisfied, please explain why.

Employment Services

Service

used ✔ Satisfied

Partially 

satisfied

Not 

satisfied

Staffing Services and Systems (CHECK ONE)

Development and validation of assembled written tests, including promotion and 

suitability tests

Development and validation of structured interviews

Development and validation of physical performance tests

Development of rating schedules

Nationwide test-scoring and application processing

Computer-based scoring of applications

Telephone application-processing (TAPS)

Computer-assisted administration of written tests

Administration of tests by trained test administrators

Professional recruiting services

Targeted recruiting

Competency assessment

USAJOBS

USACareers—A computer-based system that includes career interest assessments, career 

counseling, career development, and links to job vacancies and training courses

HR Manager—A computer-based system that provides managers with occupational 

and competency information used in job design, recruiting, crediting plans, 

performance management, appraisal, training, career development, and other personnel 

management activities

Automation

Self-service employee benefits systems (e.g., Employee Express) using touch-tone 

phones, kiosks, or internet access

Automation of HRM functions

Integrated information systems and kiosk support

Document imaging

Telephone services support

Restructuring and Downsizing Services

Downsizing planning

Restructuring studies

Technical assistance in RIF planning

Automated RIF programs

Development of restructuring programs

Career center design

Individual employee career counseling

Development of agency outplacement programs

Career and outplacement job fairs

Governmentwide placement programs
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 57

Employment Services (continued)

Service

used ✔ Satisfied

Partially 

satisfied

Not 

satisfied

Organization Assessment and Improvement Services (CHECK ONE)

Organizational assessment survey (Performance America)

Customer satisfaction surveys

Other survey services

Evaluation of HR innovations or demonstration projects

Organizational design and reengineering services

Workforce and succession planning

Leadership assessment and development

Training needs assessment and diagnosis of employee competencies

Other HR Services/Technical Assistance

Occupational analysis

Classification and qualifications standards

Occupational certification program

Other employment services (PLEASE SPECIFY)

Training and Management Assistance (TMA) Services

Obtaining Vendors for:

Training and development

Performance management

Workforce productivity

Business process reengineering 

Compensation studies

Compensation system development

Employee relations

Employee retention studies

Other TMA services (PLEASE SPECIFY)

Other OPM Services

Career development plans

Federal Executive Institute

Management development centers

SOELR conference

TRANSFORMATIONS Conference

SOLUTIONS Conference

Local workshops

All other reimbursable services (PLEASE SPECIFY)

Reimbursable Services (continued)

OPM offers the services in this table on a reimbursable basis. Please check any of the services you have obtained from OPM on 

a reimbursable basis, and rate your degree of satisfaction with each service received. For any services for which you were only partially or not satisfied, please explain why.
58 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

Employment Services

1. If you use OPM for reimbursable employment 

services, do you have practical options should 

you choose to use services from an organization 

other than OPM? Please explain.

2. Does OPM’s provision of reimbursable services 

have an impact on their leadership role with 

regard to protecting and promoting a merit system? Please explain.

3. Has OPM’s delegation of examining authority 

resulted in improvements in the hiring process in 

your agency? Please explain.

4. How has OPM’s USAJobs affected the hiring 

process in your agency?

5. Are you satisfied with your agency’s ability to fill 

jobs with highly qualified candidates? Have 

OPM’s actions had an impact in this regard?

6. Has OPM’s role in government efforts to 

streamline federal staffing rules and regulations 

resulted in program improvements for your 

agency? Please explain.

7. Does your department/agency have access to 

Employee Express?

a. If so, approximately what proportion of your 

department’s/agency’s workforce has used 

Employee Express?

b. Please describe any feedback you have 

received from your employees concerning 

their experiences with Employee Express.

8. If there are any other aspects of OPM’s activities 

in the area of employment services that you 

would like to comment on, please do so.

Oversight and Effectiveness

1. Over the years OPM has made changes in the 

way it conducts program evaluations and compliance reviews. If you have undergone an OPM 

program evaluation in the last two years:

a. Do you believe that OPM currently emphasizes the appropriate measures of HRM 

accountability in its agency program evaluations and compliance reviews?

b. What actions or different approaches to oversight would you recommend that OPM pursue, if any?

c. What are your overall impressions of OPM’s 

performance of their compliance and oversight responsibilities?

2. OPM has provided guidance and assistance to 

agencies in the development of systems and tools 

for agency use in the self-assessment of HRM.

a. How do you judge OPM’s efforts to date?

b. How has your agency benefited from OPM’s 

efforts, and is there anything more OPM 

should do in this area?

3. Has your organization/agency gone through the 

demonstration project approval process (whether 

or not your request was approved)? If so, please 

share any thoughts you have about OPM’s performance in this area.

4. What, if anything, is your agency doing to 

improve the accuracy of your data system to provide more reliable data for input into OPM’s 

Central Personnel Data File (CPDF)?

5. If there are any other aspects of OPM’s activities 

in the area of oversight and effectiveness that you 

would like to comment on, please do so.

Classification and Compensation

1. What is your opinion of OPM’s recent approach 

whereby “job-family” standards—which cover 

multiple occupations/series—are issued rather 

than individual standards? Why?

2. Over the years, OPM has conducted studies of 

and proposed changes to the Federal compensation system. In your opinion:

a. Has OPM shown appropriate leadership in 

improving the government’s federal compensation systems?

b. What impact, if any, have OPM’s actions had 

on your agency’s ability to recruit and retain 

high quality employees?

3. Regarding assistance to agencies in the area of 

compensation:

a. Should OPM be responsible for helping agencies that want or need technical advice and 

assistance on compensation matters?

b. Is OPM currently able to provide such assistance to meet your agency’s needs?
A REPORT BY THE U.S. MERIT SYSTEMS PROTECTION BOARD 59

4. If there are any other aspects of OPM’s activities 

in the area of classification and compensation 

that you would like to comment on, please do 

so.

Training and Performance Management

1. What guidance can OPM provide for employee 

training and development that would make your 

job easier? For example, would it help to have 

OPM provide guidance on workforce planning, 

on identifying workforce competencies and performance gaps, on strategic HR development 

decisionmaking, on establishing performance 

measures for HR development, or on measuring 

performance improvement outcomes attributable to HR development activities?

2. In the area of performance management, the 

past 20 years have seen flexible regulations, followed by highly centralized regulations with significant OPM control, followed by the current 

era of more flexible regulations. During any of 

that time, have OPM’s activities in the area of 

performance management had an effect on your 

agency’s ability to: a) recognize and reward good 

performers; b) help poor performers improve, 

or; c) help supervisors manage performance? 

Please explain.

3. If there are any other aspects of OPM’s activities 

in the area of training and performance management that you would like to comment on, please 

do so.

Retirement and Insurance

1. OPM has automated many aspects of the process 

for handling retirement benefits claims over the 

past 20 years.

a. Do you believe that the increased automation 

has resulted in an improvement in the efficiency and accuracy of retirement benefits 

processing by OPM?

b. What impact, if any, have OPM’s automated 

systems for retirees and annuitants had on the 

workload of your HRM office?

2. Because of the complexities of the rules and regulations covering employee benefits, in your 

opinion:

a. Should agency personnel specialists who handle employee benefits be required to complete 

a standardized certification program to ensure 

that they are proficient in the areas in which 

they advise and assist employees?

b. Why or why not?

c. If such a requirement were instituted, what 

role, if any, should OPM play in the certification program?

3. If there are any other aspects of OPM’s activities 

in the area of retirement and insurance that you 

would like to comment on, please do so.

Investigations

1. In 1996 OPM privatized its investigations services function.

a. Who does your agency’s background investigations of prospective (or current) employees?

b. If you formerly used OPM for background 

investigations, how do the quality, timeliness, 

and cost of the services provided by your current investigative organization(s) compare 

with the services provided by OPM prior to 

1996?

2. Because clearance standards differ to some extent 

across agencies, new investigations must sometimes be done for job candidates from outside, 

even though the candidates may have been 

recently cleared by another agency.

a. Has this been a problem for your agency?

b. If so, what do you believe OPM should do, if 

anything, to remedy this problem?

3. If there are any other aspects of OPM’s activities 

in the area of investigations that you would like 

to comment on, please do so.

Executive Resources and Management 

Development

1. If your agency has ever had to deal with an SES 

performance problem for which you sought 

OPM’s assistance, was the assistance you 

received adequate? Please explain.

2. How do the new executive core qualifications 

(competencies) developed by OPM compare to 

the previous executive competencies, e.g., do the 
60 THE U.S. OFFICE OF PERSONNEL MANAGEMENT IN RETROSPECT: ACHIEVEMENTS AND CHALLENGES AFTER TWO DECADES

new competencies better match your agency’s 

needs?

3. OPM’s FY 2000 Annual Performance Plan 

defines OPM’s role in executive resources as providing “Governmentwide leadership, policy 

direction, and guidance and technical assistance 

for the Senior Executive Service (SES) and executive personnel systems to maximize agencies’ 

flexibilities while safeguarding the larger corporate interests of the Government.” Do you think 

OPM has been successful in fulfilling this role? 

Please briefly explain the basis for your answer.

4. If there are any other aspects of OPM’s activities 

in the area of executive resources and management development that you would like to comment on, please do so.

Other Areas of OPM Significant Activities

OPM also provides advice, guidance, assistance, 

and services to agencies in other program areas such 

as:

• classification appeals

• technical assistance on performance appraisals 

and performance management

• pay and leave administration

• staffing reinvention

• workforce restructuring

• workforce diversity

• partnership and labor-management relations

• employee relations and health services

• family-friendly workplace advocacy

If you have comments you’d like to share about 

OPM’s activities in any of these areas, please do so.