GAO 

United States Government Accountability Office

Report to the Committee on Armed 

Services, U.S. Senate 

DOD CIVILIAN 

PERSONNEL 

Intelligence Personnel 

System Incorporates 

Safeguards, but 

Opportunities Exist 

for Improvement 

December 2009 

GAO-10-134 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

December 2009

DOD CIVILIAN PERSONNEL 

Intelligence Personnel System Incorporates

Safeguards, but Opportunities Exist for Improvement 

Highlights of GAO-10-134, a report to the 

Committee on Armed Services, U.S. 

Senate 

Since 2001, GAO has designated 

strategic human capital 

management as a high-risk area 

because of the federal 

government’s long-standing lack of 

a consistent approach to such 

management. In 2007, the Under 

Secretary of Defense for 

Intelligence (USD(I)) began 

developing a human capital 

system—called the Defense 

Civilian Intelligence Personnel 

System (DCIPS)—to manage 

Department of Defense (DOD) 

civilian intelligence personnel. In 

response to a congressional 

request, GAO examined the extent 

to which DOD has (1) incorporated 

internal safeguards into DCIPS and 

monitored the implementation of 

these safeguards and (2) developed 

mechanisms to identify employee 

perceptions about DCIPS. GAO 

analyzed guidance, interviewed 

appropriate officials, and 

conducted discussion groups with 

employees at select DOD 

components. At the end of GAO’s 

review, legislation was enacted that 

impacts, among other things, how 

DCIPS employees will be paid. 

What GAO Recommends

GAO recommends that DOD issue 

guidance to involve employees in 

system design and implementation 

and guidance for the analysis of 

final performance ratings using 

demographic data; finalize and 

execute its evaluation plan to 

assess the system, including the 

safeguards; and implement 

mechanisms that comprehensively 

identify employee perceptions. 

DOD concurred with all four 

recommendations. 

While early in its implementation of DCIPS, DOD has taken some positive 

steps to incorporate 10 internal safeguards to help ensure the fair, effective, 

and credible implementation of the system; however, opportunities exist to 

immediately improve the implementation of two of these safeguards, and 

continued monitoring of all is needed. For example, one safeguard requires 

employees to be trained on the system’s operations, and GAO noted that DOD 

had provided extensive training to employees on DCIPS to include several 

Web-based and classroom courses. For another safeguard—which requires 

ongoing performance feedback—GAO noted that DOD’s guidance requires 

feedback between employees and supervisors at the midpoint and at the close 

of the performance rating cycle. However, GAO determined that in the case of 

two safeguards—involving employees and fully implementing the merit 

principles—DOD could immediately improve its implementation. First, while 

DOD has leveraged mechanisms like town hall meetings and “brown bags” to 

involve employees in DCIPS, its guidance does not identify a formalized 

process for the continuous involvement of employees in the system 

implementation—which could ultimately undermine its credibility. Second, 

while DOD has stated that it will conduct an analysis of final ratings utilizing 

demographic data, DOD does not have a written policy outlining how this will 

be accomplished, and therefore may be unable to fully determine whether 

potential barriers to fair and equitable ratings exist. Without steps to improve 

implementation of this safeguard, employees may lack confidence in the 

system. Finally, GAO previously reported—for systems like DCIPS—that 

continued monitoring of such systems’ safeguards is needed to help ensure 

agency actions are effective. In October 2009, DOD provided GAO with a draft 

DCIPS evaluation plan that would be executed after the first payout in 

January 2010. Without finalizing and executing the plan, DOD will not know if 

it has achieved desired outcomes from the system.

DOD has used several mechanisms to provide employees with information; 

however, these mechanisms do not comprehensively identify and address 

employee perceptions of DCIPS. For example, USD(I), among other things, 

maintains a Web-site that contains frequently asked questions submitted by 

employees and responses by USD(I). Absent, however, are mechanisms to 

systematically identify employee perceptions. The nongeneralizable results of 

the discussion groups GAO conducted with employees and supervisors 

yielded mixed views. For example, participants generally expressed positive 

views about the concept of pay for performance. But participants at most of 

the Intelligence Components noted that DCIPS was being implemented too 

quickly or many questions went unanswered. Although DOD officials have 

drafted surveys that will allow them to more comprehensively collect 

employee perceptions about DCIPS, these surveys lack questions that would 

provide insight about employee perceptions of certain safeguards and overall 

acceptance of DCIPS. Without including such questions and expeditiously 

implementing its surveys, DOD will not have clear insight into employee 

perceptions. 

View GAO-10-134 or key components.

For more information, contact Brenda S. 

Farrell at (202) 512-3604 or farrellb@gao.gov. 
Page i GAO-10-134 

Contents 

Letter 1

Results in Brief 7 

Background 11 

DOD Has Taken Steps to Incorporate Internal Safeguards into 

DCIPS, but Two Safeguards and Monitoring Have Not Been Fully 

Implemented 19 

DOD Had Several Mechanisms to Provide Information to 

Employees, but These Did Not Comprehensively Identify 

Employee Perceptions of DCIPS, and Future Mechanisms Do 

Not Include Some Needed Questions 30 

Conclusions 33 

Recommendations for Executive Action 34 

Agency Comments and Our Evaluation 35 

Appendix I The National Intelligence Civilian Compensation 

Program 38 

Appendix II Merit System Principles 40 

Appendix III Scope and Methodology 42 

Appendix IV Defense Civilian Intelligence Personnel System 

Compared to the National Geospatial-Intelligence 

Agency System 49 

Appendix V Training Curriculum 51 

Appendix VI Defense Civilian Intelligence Personnel System 

Comparison with the National Security Personnel 

System 53 

 Defense Civilian Intelligence Personnel 
Appendix VII Comments from the Department of Defense 55 

Appendix VIII Comments from the Office of the Director of 

National Intelligence 59 

Appendix IX GAO Contact and Staff Acknowledgments 63 

 

Related GAO Products 64 

 

Tables 

Table 1: Composition of Discussion Groups by Demographic 

Category per Component. 47 

Table 2. DCIPS and Total Pay Compensation Comparison. 49 

Table 3: Selected DCIPS Training Curriculum 51 

Table 4. DCIPS and the National Security Personnel System 

Comparison 53 

Figures 

Figure 1: U.S. Intelligence Community’s Pay Modernization 

Framework and Efforts 13 

Figure 2: DCIPS Implementation Timeline 15 

Figure 3: Sample DCIPS Pay Pool Structure 17 

Figure 4: DCIPS Pay Band Structure 18 

Figure 5: Alignment of SMART Objectives to National Intelligence 

Strategy Goals 20 

Page ii GAO-10-134 Defense Civilian Intelligence Personnel
Abbreviations 

DOD Department of Defense 

DCIPS Defense Civilian Intelligence Personnel System 

ODNI Office of the Director for National Intelligence 

SMART Specific, measurable, achievable, relevant, and time-limited 

USD(I) Under Secretary for Defense (Intelligence) 

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Page iii GAO-10-134 Defense Civilian Intelligence Personnel
Page 1 GAO-10-134 

 

United States Government Accountability Office

Washington, DC 20548 

 

December 17, 2009 

The Honorable Carl Levin 

Chairman 

The Honorable John McCain 

Ranking Member 

Committee on Armed Services 

United States Senate 

Since 2001, we have designated strategic human capital management as a 

high-risk area because of the federal government’s long-standing lack of a 

consistent approach to such management.1

 We have previously reported 

that strategic human capital management can be a powerful lever for 

affecting transformational change.2

 Additionally, in our 2009 High-Risk 

Series update, we identified the importance of having committed and 

sustained top leadership in agencies across the federal government to 

address this challenge and of developing a clear linkage between 

individual employee performance and organizational success to create and 

maintain a more results-oriented, customer-focused, collaborative, diverse, 

and inclusive workforce.3

 In a 2008 report to Congress, the Office of the 

Director for National Intelligence (ODNI) noted that, in the aftermath of 

the terrorist attacks of September 11, 2001, and prior to Operation Iraqi 

Freedom, congressional and presidential reviews identified significant 

institutional, cultural, and organizational factors that impeded the 

Intelligence Community from operating in an effective and collaborative 

manner. 4

 As an example, the report noted that one such review 

concluded that the U.S. Intelligence Community (1) had failed to 

encourage joint personnel assignments that could break down cultural 

1

GAO, High-Risk Series: An Update, GAO-09-271 (Washington, D.C.: January 2009); HighRisk Series: An Update, GAO-07-310 (Washington, D.C.: January 2007); High-Risk Series: 

An Update. GAO05-207 (Washington, D.C.: January 2005); and High-Risk Series: An 

Update. GAO-03-119 (Washington, D.C.: January 2003). 

2

 GAO, 21st Century Challenges: Transforming Government to Meet Current and 

Emerging Challenges, GAO-05-830T (Washington, D.C.: July 2005); GAO-09-271. 

3

GAO-09-271. 

4

Office of the Director for National Intelligence, United States Intelligence Community 

Report on IC Pay Modernization: Response to Section 308 of H.R. 2082, the Intelligence 

Authorization Act for Fiscal Year 2008 (April 22, 2008). 

 Defense Civilian Intelligence Personnel 
 

barriers and foster collaboration amongst the various intelligence 

agencies; (2) contained personnel systems that were ill-suited to hire and 

retain the most talented young people, who could often earn far more 

money outside the government; and (3) had compensation systems—like 

the General Schedule System—that were too often tied to “time-in-grade,” 

rather than demonstrated achievement.5

 The commission recommended, 

among other things, that ODNI establish a central human resources 

authority for the Intelligence Community;6

 create a uniform system for 

performance evaluations and compensation; and develop a more 

comprehensive and creative set of performance incentives.7

 To this end, 

both ODNI and the Under Secretary of Defense for Intelligence (USD(I))—

the primary organization responsible for development and oversight of 

DOD’s intelligence community personnel system—have consistently 

emphasized their commitment to reforming and modernizing the disparate 

personnel systems used throughout the Intelligence Community. 

Specifically, as part of a comprehensive approach to consistently 

modernize compensation across the U.S. Intelligence Community, ODNI 

has taken steps to develop a pay modernization framework to help prevent 

inequality in pay, ensure a level playing field, help the Intelligence 

Community compete with the private sector for employees with critical 

skills, and retain a competitive workforce. ODNI officials stated that this 

pay modernization framework will also help bring the U.S. Intelligence 

Community closer together and act as a true community and not simply an 

association of agencies with similar and related missions. 8

 According to 

ODNI officials, to address the personnel challenges in the Intelligence 

 

5

The Commission on the Intelligence Capabilities of the United States Regarding Weapons 

of Mass Destruction: Report to the President of the United State (March 31, 2005). This 

Commission was directed to assess whether the Intelligence Community was sufficiently 

authorized, organized, equipped, trained, and resourced to identify and warn the U.S. 

government of the proliferation of weapons of mass destruction. 

6

The Director of National Intelligence is the head of the Intelligence Community and is 

responsible for integrating foreign, military, and domestic intelligence in defense of U.S. 

interests at home and abroad. The intelligence community comprises the Central 

Intelligence Agency and the intelligence components of the Departments of Defense, 

Energy, Homeland Security, State, Treasury, and intelligence offices within the U.S. Coast 

Guard, the Drug Enforcement Administration, and the Federal Bureau of Investigation. 

7

The Commission on the Intelligence Capabilities of the United States Regarding Weapons 

of Mass Destruction, “A Report to the President of the United States” (March 31, 2005). 

8

According to these officials, this is a key objective of the Intelligence Reform and 

Terrorism Prevention Act of 2004. 

Page 2 GAO-10-134 Defense Civilian Intelligence Personnel
 

Community that mirror those found throughout the rest of the executive 

branch, the Director of National Intelligence launched the National 

Intelligence Civilian Compensation Program. Further, according to these 

same officials, the National Intelligence Civilian Compensation Program is 

a modern performance management and pay-for-performance initiative for 

the U.S. Intelligence Community, which is intended to replace the existing 

obsolete compensation systems used in much of the U.S. Intelligence 

Community. Specifically, the National Intelligence Civilian Compensation 

Program is an overarching framework established by various Intelligence 

Community directives, which sets forth common performance 

management and pay rules for this community. See appendix I for a 

detailed discussion of the National Intelligence Civilian Compensation 

Program. Using this framework, among other things, USD(I), in 2007, 

began developing a human capital system—called the Defense Civilian 

Intelligence Personnel System (DCIPS)—to manage civilian intelligence 

personnel in the Department of Defense (DOD) intelligence components.9

 

The statutory authority for this system originated in the National Defense 

Authorization Act for Fiscal Year 1997,10 which provided DOD the 

authority to create a pay-for-performance system for the defense 

Intelligence Community—the National Geospatial-Intelligence Agency was 

the first DOD organization to implement this authority in 1998. In 2006, 

the ODNI, in partnership with all of the elements of the U.S. Intelligence 

Community, adopted the National Geospatial-Intelligence Agency’s piloted 

model in its design. 

In 2008, the Senate Armed Services Committee asked us to review the 

implementation of DCIPS. In response to this request, we examined the 

extent to which DOD has (1) incorporated internal safeguards into DCIPS 

and monitored the implementation of the safeguards and (2) developed 

mechanisms to identify employee perceptions about it. 

 

9

The nine DOD intelligence components include the Defense Intelligence Agency, the 

National Geospatial-Intelligence Agency, the National Reconnaissance Office, the National 

Security Agency, the Office of the Under Secretary of Defense for Intelligence, and the 

intelligence elements of the Army, Navy, Marine Corps, and Air Force. Although the 

Defense Security Service does not employee intelligence personnel, it will also be covered 

by DCIPS because that organization reports directly to the USD(I). 

10The authority for DCIPS is codified in 10 U.S.C. §§ 1601-1614. Further, 10 U.S.C. § 1601 

was amended in 2000 to authorize the Secretary of Defense to include in DCIPS civilian 

personnel who perform intelligence functions, but who are not employees of a DOD 

intelligence component. Pub. L. No. 106-398, § 1141 (2000). 

Page 3 GAO-10-134 Defense Civilian Intelligence Personnel
 

At the end of GAO’s review, legislation was enacted that contains 

provisions that affect DCIPS.11 Specifically, provisions of the National 

Defense Authorization Act for Fiscal Year 2010 suspended the fixing of 

“rates of basic pay” under DCIPS “for employees and positions within any 

element of the Intelligence Community,” except for the National 

Geospatial-Intelligence Agency. The act also required “rates of basic pay” 

to be fixed in accordance with provisions of law that (disregarding DCIPS) 

would otherwise apply, during the period beginning on the date of the 

enactment of the defense authorization act and ending on December 31, 

2010. The act further required the Secretary of Defense, the Director of 

the Office of Personnel and Management, and the Director of National 

Intelligence to jointly designate an independent organization to review the 

operation of DCIPS. The Secretary of Defense, the Director of the Office 

of Personnel and Management, and the Director of National Intelligence 

are required, under the act, to submit to the congressional oversight 

committees a written report describing any actions that the Secretary has 

taken or proposes to take in response to the report of the independent 

organization. Additionally, the provisions require the Secretary of Defense 

to submit to the congressional oversight committees a written description 

of any actions taken or proposed to be taken by the Secretary in response 

to GAO’s review and recommendations regarding DCIPS. On November 3, 

2009, the USD(I) stated in a memorandum to the defense intelligence 

workforce, that the legislation did not repeal or terminate DCIPS, but 

suspended certain provisions of the DCIPS pay-setting regulations until 

December 31, 2010. The memorandum further noted that the National 

Geospatial-Intelligence Agency would be the only defense intelligence 

component to continue under all DCIPS regulations—including all of the 

performance-based pay adjustment processes included in the regulations. 

According to the memorandum, eligible employees in the remaining 

intelligence components will not receive a payout under DCIPS but will 

receive scheduled increases equivalent to step increases under the General 

Schedule structure, as well as the full General Pay Increase and locality 

pay, in January. 

To address our first objective, we analyzed guidance issued by the 

Director of National Intelligence and the USD(I) and interviewed key DOD 

officials to determine the extent to which DOD has incorporated internal 

safeguards identified in our prior work on human capital management 

 

11The National Defense Authorization Act for Fiscal Year 2010, Pub. L. No. 111-84 (2009). 

Page 4 GAO-10-134 Defense Civilian Intelligence Personnel
 

issues. Specifically, we assessed the extent to which DOD has 

incorporated the following 10 performance management safeguards:12 

• Assure that the agency’s performance management system links 

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

desired outcomes. 

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

individual pay to performance and provide an equitable method for 

appraising and compensating employees. 

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

employees in the implementation and operation of the performance 

management system. 

• Institute a process for ensuring ongoing performance feedback and 

dialogue between supervisors, managers, and employees throughout 

the appraisal period and setting timetables for review. 

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

meaningful distinctions in individual employee performance. 13

• Provide a means for ensuring that adequate agency resources are 

allocated for the design, implementation, and administration of the 

performance management system. 

• Assure that there is an independent and credible employee appeals 

mechanism. 

• Assure that there are reasonable transparency and appropriate 

accountability mechanisms in connection with the results of the 

performance management process, including periodic reports on 

internal assessments and employee survey results relating to 

performance management and individual pay decisions while 

protecting individual confidentiality. 

 

12The safeguards identified for this report are, however, derived from our extensive work 

on human capital management. Examples of this work include: GAO, Human Capital: 

DOD Needs to Improve Implementation of and Address Employee Concerns about Its 

National Security Personnel System, GAO-08-773 (Washington, D.C.: September 2008); 

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

Security Personnel System (NSPS), GAO-06-582R (Washington, D.C.: September 2008); 

Human Capital: Designing and Managing Market-Based and More PerformanceOriented Pay Systems, GAO-05-1048T (Washington, D.C.: September 2005); and 

Posthearing Questions Related to Strategic Human Capital Management, GAO-03-779R 

(Washington, D.C.: May 2003). ODNI’s Intelligence Community Directive 650, National 

Intelligence Civilian Compensation Program: Guiding Principles and Framework

(Effective April 28, 2008), also articulates a number of safeguards to be incorporated into 

the National Intelligence Civilian Compensation Program, some of which are similar to 

those we have previously reported on in our human capital work. 

13This safeguard also accounts for an internal grievance process to address employee 

complaints, such as the reconsideration of ratings. 

Page 5 GAO-10-134 Defense Civilian Intelligence Personnel
 

• Involve employees in the design of the system, to include employees 

directly involved in validating any related implementation of the 

system. 

• Adhere to merit principles set forth in section 2301 of title 5 of the U.S. 

Code. (For example, section 2301 (b)(2) deals with fair and equal 

treatment, regardless of factors such as political affiliation, race, color, 

sex, age, or handicapping condition and section 2301 (b)(8)(A) says 

that employees should be protected against arbitrary action, personal 

favoritism, and coercion for partisan political purposes.) (The merit 

principles are listed in their entirety in appendix II.) 

To address our second objective, we examined the extent to which DOD 

had mechanisms in place to identify employee perceptions about DCIPS 

and reviewed DOD surveys and information about DCIPS on defense 

intelligence component Web sites. We also reviewed town hall meetings 

about DCIPS and interviewed headquarters level DCIPS staff responsible 

for implementing DCIPS at each of the nine defense intelligence 

components and the Defense Security Service. To obtain insight into 

employee perceptions and opinions of DCIPS, we visited seven DOD 

intelligence components and conducted 26 nongeneralizable discussion 

groups.14 For each of the seven DOD intelligence components, we 

conducted separate discussion groups for employees and supervisors both 

in the Washington, D.C., area at each organization’s headquarters, as well 

as at three field locations in the United States to determine if employee 

perceptions varied by location. 15 While the information from our 

discussion groups is not generalizable to the entire population of DOD 

civilian intelligence personnel, this information provides insight into 

civilian intelligence personnel perceptions about the implementation of 

 

14We conducted discussion groups with seven of the nine defense intelligence components. 

Specifically, our sample included civilian intelligence personnel from the intelligence 

elements of the Navy, Marine Corps, and civilian intelligence personnel from the Defense 

Intelligence Agency, National Geospatial-Intelligence Agency, National Reconnaissance 

Office, National Security Agency, and the office of the Under Secretary of Defense for 

Intelligence. We excluded from our sample discussion groups civilian intelligence 

personnel from the intelligence elements within the Army and Air Force, and personnel 

from the Defense Security Service because these organizations, at the time of our study, 

had plans to begin implementing in July 2009, August 2009 and October 2009, and thus, had 

not yet implemented DCIPS to the extent that the other seven defense intelligence 

components had. 

15The specific locations we visited are omitted from this report since that information is 

classified. Further, at some locations, we were able to conduct multiple discussion groups 

with defense intelligence components. 

Page 6 GAO-10-134 Defense Civilian Intelligence Personnel
 

DCIPS. However, other employees and supervisors under DCIPS who did 

not participate in our discussion groups may have different perceptions. 

We conducted this performance audit from November 2008 through 

November 2009 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

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

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. A more thorough 

description of our scope and methodology is provided in appendix III. 

While early in its implementation of DCIPS, DOD has taken some positive 

steps to incorporate 10 internal safeguards into DCIPS, but opportunities 

exist to immediately improve the implementation of 2 of these safeguards 

and continued monitoring of all of the safeguards is needed. For example, 

DOD has taken some steps to, among other things, provide extensive 

training to employees on DCIPS and require feedback between employees 

and supervisors at the mid-point and at the close of the performance rating 

cycle. However, additional steps could be taken to help ensure (1) 

continuous employee involvement in DCIPS and (2) the implementation of 

merit principles regarding the need for an independent analysis of ratings. 

More specifically: 

Results in Brief 

• DOD has taken steps to involve employees in the implementation of 

DCIPS; however, opportunities exist to expand this involvement by 

establishing a formal process for the continued involvement of 

employees in the system. As we previously reported, leading 

organizations involve employees directly and consider their input 

before finalizing key decisions. We further stated that such 

involvement in system design and implementation must be early, 

active, and continuous if employees are to gain a sense of 

understanding and ownership of the changes that are being made.16 At 

the time of our review, DOD had sought employee input through 

several mechanisms, including a survey that validated performance 

competencies for DCIPS and numerous Town hall meetings with 

employees17—both domestically and overseas—to provide employees 

 

16GAO, Post-Hearing Questions Related to the Department of Defense’s National Security 

Personnel System, GAO-05-644 (Washington, D.C.: April 2005). 

17This survey was for official use only. 

Page 7 GAO-10-134 Defense Civilian Intelligence Personnel
 

information about DCIPS. While these steps demonstrate a 

commitment to engage the workforce, DOD has not taken advantage of 

other opportunities to expand such efforts by establishing a formal 

process for the continuous involvement of employees in DCIPS. 

Specifically, DCIPS guidance does not identify a formalized process for 

the continued and direct involvement of employees in the development 

and implementation of DCIPS. Employees and supervisors in 

discussion groups at 12 of the 13 sites we visited indicated that they felt 

they had limited or no involvement in the design and implementation of 

the system. Without continuous employee involvement in the 

implementation of DCIPS, employees may experience a loss of 

ownership over the system, which could ultimately undermine its 

credibility. We are therefore recommending that DOD issue guidance to 

institutionalize a process to involve employees continually in future 

design and implementation changes. 

• DOD has taken steps to ensure that DCIPS incorporates the merit 

principles set forth in section 2301 of title 5 U.S. code.18 However, DOD 

may be unable to fully determine whether ratings are fair and equitable 

because the department does not have a written policy outlining how it 

will analyze final ratings by demographic categories/groups; how the 

components will identify potential barriers, if they exist; or what DOD 

will do, if anything, with the results of that analysis. The Office of 

Personnel Management has noted that, prior to rolling out an 

alternative personnel system, an agency should document its business 

processes and procedures associated with all aspects of the system.19

In September 2009, USD(I) provided us with the “2009 DCIPS Guidanc

on Pay Pools and Reporting of Results,” which stipulates that no later 

than March 31, 2010, components will provide the USD(I) Human 

Capital Management Office with detailed data, including demographic 

analysis, on performance evaluation and payout results for 2009. While 

notable, this 2009 document does not specify what data is to be 

collected for DOD’s analysis of demographics; how the data should be 

analyzed; what process the components should follow to investigate 

potential barriers to fair and equitable ratings and their causes; or a 

process for eliminating barriers that are found. Until DOD specifies 

e 

 

18Section 2301 of title 5 of the U.S. Code sets out the merit principles. One principle states 

that employees and applicants for employment should receive fair and equitable treatment 

in all aspects of personnel management without regard to political affiliation, race, color, 

religion, national origin, sex, marital status, age, or handicapping condition, and with 

proper regard for their privacy and constitutional rights. 

19Office of Personnel Management, Alternative Personnel Systems Objectives-Based 

Assessment Framework Handbook, (Washington, D.C.: October 2008). 

Page 8 GAO-10-134 Defense Civilian Intelligence Personnel
 

these steps in guidance, the intelligence components may not follow a 

consistent approach in these areas, the department may be unable to 

fully determine whether potential barriers to fair and equitable ratings 

exist, and employees may then lack confidence in the fairness and 

credibility of the DCIPS and its ratings. To help ensure equity, fairness, 

and non-discrimination in ratings, we are recommending that DOD 

issue guidance on its analysis of finalized ratings that explains how the 

demographic analysis of ratings is to be conducted. 

Additionally, we have previously reported with another pay-forperformance system that continued monitoring of the safeguards is 

needed to help ensure that a department’s actions are effective as 

implementation of such performance management systems progresses.20

We also noted that adequate evaluation procedures would, among other 

things, facilitate better congressional oversight, allow for any midcourse 

corrections, assist DOD in benchmarking its progress, and help document 

best practices and lessons learned with employees and other 

stakeholders.21 In October 2009, DOD provided us with a draft evaluation 

plan that details tentative procedures to monitor and evaluate DCIPS 

implementation, including all of the safeguards. According to DOD 

officials, they do not expect to execute the evaluation plan until after the 

first payout in January 2010. DOD’s efforts to develop an evaluation plan 

are notable; however, without finalizing and executing such a plan, the 

department will not have a clear understanding of whether it is achieving 

its desired outcomes when implementing the new performance 

management system for its intelligence components. To help ensure the 

department evaluates the impact of DCIPS, we are therefore 

recommending that it take steps to finalize and execute its evaluation plan 

to assess the system, including the implementation of the internal 

safeguards. 

At the time of our review, DOD used several mechanisms to provide 

employees with information and respond to questions; however, these 

mechanisms do not comprehensively identify and address employee 

perceptions of DCIPS. For example, each of the defense intelligence 

components has conducted numerous Town hall meetings to brief 

employees on DCIPS. In addition, USD(I) maintained a Web site that 

publishes responses to frequently asked questions. While notable, these 

 

20GAO-08-773. 

21GAO-05-730. 

Page 9 GAO-10-134 Defense Civilian Intelligence Personnel
 

efforts do not directly assess employees’ perceptions of DCIPS. The 

nongeneralizable results of the discussion groups we conducted identified, 

among other things, mixed views about certain aspects of the system. For 

example, employees and supervisors generally expressed positive views 

about the concept of pay for performance; however, employees at most of 

the components noted that they were frustrated because, among other 

things they felt that the implementation of DCIPS was moving too quickly 

or that many questions about DCIPS went unanswered. While DOD’s 

mechanisms and the results of our discussion groups provide insight to 

DCIPS officials on the intelligence employees’ perceptions, they do not 

comprehensively identify and address employee perceptions of DCIPS. 

We have previously reported that high-performing organizations 

continuously review and revise their performance management systems 

based on data-driven lessons learned and changing needs in the 

environment.22 Consistent with this approach, USD(I) officials have 

drafted four surveys that will cover various parts of DCIPS, such as 

training and be accompanied by guidance on how to assess survey results. 

However, these surveys lacked questions that would provide insight on 

certain aspects of the safeguards, such as the likelihood that an employee 

would use the internal grievance process to challenge a rating that was 

perceived to be unfair.23 Moreover, the surveys—at the time—did not 

directly ask questions about or measure employee overall acceptance of 

DCIPS. Until DOD incorporates such questions and implements its 

mechanisms, DOD may not be able to comprehensively and accurately 

identify and measure employee perceptions. We are therefore 

recommending that DOD expeditiously implement mechanisms—

including the four surveys—that comprehensively identify employee 

perceptions and ensure that those mechanisms include questions 

regarding certain safeguards such as the internal grievance process and 

employees’ acceptance of DCIPS. 

 

22GAO, Office of Personnel Management: Key Lessons Learned to Date for Strengthening 

Capacity to Lead and Implement Human Capital Reforms, GAO-07-90 (Washington, D.C.: 

January 2007). 

23Department of Defense Instruction 1400.25-V2011, DOD Civilian Personnel Management 

System: Defense Civilian Intelligence Personnel System (DCIPS) Performance 

Management (August 14, 2009) contains information about the internal grievance process 

employees can use to challenge ratings. That process addresses the safeguard pertaining to 

ensuring the agency’s performance management system results in meaningful distinctions 

in individual employee performance. 

Page 10 GAO-10-134 Defense Civilian Intelligence Personnel
 

In written comments on a draft of this report, DOD concurred with all of 

our recommendations and noted specific steps taken to implement each 

one. We also provided ODNI with a draft of this report because, though 

not the focus of our review, ODNI has played a significant role in strategic 

human capital management reform for the U.S. Intelligence Community 

and is thus well positioned to provide additional insights and comments on 

DCIPS and companion efforts in the Intelligence Community. ODNI agreed 

to work with USD(I) to address the areas identified in our report and 

stated that they strongly believed that DCIPS had been established on a 

strong foundation of policy directives and incorporated many best 

practices in its processes. Both DOD and ODNI provided technical 

comments, which we incorporated into this report, as appropriate. 

The authority for DOD to establish a pay-for-performance management 

system for civilian defense intelligence employees originated in the 

National Defense Authorization Act for Fiscal Year 1997.24 Initially, in 

1998, only the National Geospatial-Intelligence Agency implemented Full 

Pay Modernization for its employees. Specifically, the Office of the 

Secretary of Defense granted the National Geospatial-Intelligence Agency 

the authority to pilot test a pay-for-performance system. The National 

Geospatial-Intelligence Agency eventually converted all of its employees 

out of the General Schedule pay scale and into a system it called Total Pay 

Compensation in 1999 and thus has been under that system for about 10 

years. 

Background 

As stated previously, ODNI, with agreement from agencies and 

departments in the Intelligence Community, established the overarching 

evaluation and performance based pay framework for this community—

the National Intelligence Civilian Compensation Program. This framework 

was established by Intelligence Community Directives, which among other 

things, set common rating categories and performance standards that were 

adopted by the Intelligence Community. According to Intelligence 

Community Directive 650, the Director of National Intelligence has the 

responsibility to establish, in collaboration and coordination with the 

heads of executive departments and independent agencies with 

Intelligence Community employees, a set of unifying Intelligence 

Community-wide principles, policies, and procedures governing the 

 

24Pub.L. No. 104-201, §§ 1631-1632 (1996). These provisions, as amended, are codified at 10 

U.S.C. §§ 1601-1614. 

Page 11 GAO-10-134 Defense Civilian Intelligence Personnel
 

compensation of civilian employees in the Intelligence Community.25 

DOD, in 2007, designated USD(I) as the organization responsible for 

overseeing the implementation of DCIPS. USD(I) based DCIPS primarily 

on the pay-for-performance system implemented at the National 

Geospatial-Intelligence Agency. Appendix IV shows the notable 

differences between the National Geospatial-Intelligence Agency’s system 

and DOD’s DCIPS. Additionally, figure 1 outlines the U.S. Intelligence 

Community’s pay modernization efforts under the National Intelligence 

Civilian Compensation Program framework. DCIPS is one of the first 

systems to use this framework. 

 

25Intelligence Community Directive Number 650, National Intelligence Civilian 

Compensation Program: Guiding Principles and Framework, April 28, 2008. 

Page 12 GAO-10-134 Defense Civilian Intelligence Personnel
 

Figure 1: U.S. Intelligence Community’s Pay Modernization Framework and Efforts 

Source: Office of the Director of National Intelligence; GAO analysis.

To be determined

To be determined

ODNI PfP

Note: According to officials at the Office of the Director of National Intelligence, this figure shows 

Intelligence Community organizations that presently have the statutory authority to implement pay-forperformance systems within their agency. According to these officials, other national intelligence 

organizations from other federal agencies and departments—including the intelligence offices within 

the Departments of Energy, State, and Treasury, and the Drug Enforcement Administration—

currently do not have the statutory authority to implement the National Intelligence Civilian 

Compensation Program. 

The Senior Executive Service is currently under a pay-for-performance management system, which 

was established in 2004. 

DCIPS will be the performance management system applicable to DOD 

civilian intelligence personnel in the DOD intelligence components, which 

include the Defense Intelligence Agency, the National GeospatialIntelligence Agency, the National Reconnaissance Office, the National 

Security Agency, the Office of the Under Secretary of Defense for 

Intelligence, and the intelligence elements of the military departments. 

Page 13 GAO-10-134 Defense Civilian Intelligence Personnel
 

Although not a defense intelligence component, the Defense Security 

Service also converted to DCIPS. 

Implementation of DCIPS pay-for-performance began in September 2008 

and consists of three specific phases: 26 (1) Performance Management, 

which focuses on the processes of setting expectations and objectives for 

monitoring, rating, and rewarding employee performance; (2) Pay Bands, 

which moves employee pay from the General Schedule/Government Grade 

pay scale to the five pay ranges associated with a particular DCIPS work 

category and work level; and (3) the First Performance Payout, which is 

when employees will receive a combination of their performance-based 

salary increase and their performance-based bonus increase for the first 

time. The DOD components have implemented DCIPS, in some instances, 

at different times. Figure 2 depicts the timeline, at the time of our review, 

for each component’s phased implementation. 

 

26According to USD(I) officials, while implementation of a common DCIPS architecture 

began in 2008, efforts to design DCIPS began in 2005. 

Page 14 GAO-10-134 Defense Civilian Intelligence Personnel
 

Figure 2: DCIPS Implementation Timeline 

2008 2009 2010 2011

Performace Management 

System

First Performance Payout

(Bonuses only – 2010)

Pay Bands

DIA, Navy/

USMC,

NGA, NSA

OUSD(I)

Army AF

NRO DSS

AF

NRO DSS

Sept. Oct. Nov. Jul. Aug. Oct. Jan. Jan.

DIA NGA Navy/USMC Army

OUSD(I)

DIA, Navy/

USMC,

NGA, NSA

OUSD(I)

Army

AF, NRO, 

DSS

DIA Defense Intelligence Agency

USMC United States Marine Corps

NGA National Geospatial-Intelligence Agency

NSA National Security Agency

OUSD(I) Office of the Under Secretary of Defense for Intelligence

AF Air Force

NRO National Reconnaissance Office

DSS Defense Security Service 

Navy Navy

Army Army

Source: DOD.

DCIPS Implementation Timeline

Note: Section 1114 of the National Defense Authorization Act for Fiscal Year 2010, Pub. L. No. 111-

84 (2009), prohibits the fixing of rates of basic pay under DCIPS for employees and positions within 

any element of the Intelligence Community, except for the National Geospatial-Intelligence Agency, 

and requires them to be fixed in accordance with provisions of law that (disregarding DCIPS) would 

otherwise apply, during the period beginning on the date of the enactment of the defense 

authorization act and ending on December 31, 2010. Prior to the President signing the defense 

authorization legislation into law, the USD(I) had, on October 8, 2009, temporarily halted the 

conversion of the Defense Security Service and National Security Agency employees into pay bands. 

Under DCIPS, performance management consists of two interrelated 

processes: the performance management process and the pay pool 

process.27 The performance management process includes a 12-month 

 

27Department of Defense Instruction 1400.25-V2011, DOD Civilian Personnel Management 

System: Defense Civilian Intelligence Personnel System (DCIPS) Performance 

Management (August 14, 2009) and Department of Defense Instruction 1400.25-V2012,

DOD Civilian Personnel Management System: Defense Civilian Intelligence Personnel 

System (DCIPS) Performance-Based Compensation (September 15, 2009). 

Page 15 GAO-10-134 Defense Civilian Intelligence Personnel
 

performance evaluation period that runs annually from October 1 through 

September 30, unless USD(I) has granted an exception. During this period, 

employees, along with their supervisors—who are also referred to as 

rating officials—collaborate to identify performance expectations and 

outcome-focused objectives; engage in regular dialogue to monitor 

performance throughout the year, including a required mid-point review; 

develop performance strengths and skills; document achievements 

through employee self-assessments and rating official assessments; and, 

finally, conduct an end-of-year performance review. At the end of the 

performance evaluation period, the rating official completes an evaluation 

of record for each of the employees they supervise. These evaluations of 

record are then passed through two levels of review: first by reviewing 

officials and then by the Performance Management Performance Review 

Authority. Reviewing officials are responsible for coordinating with rating 

officials in evaluating and rating the performance of employees. 

Concurrent with the actions of the reviewing officials, the Performance 

Management Performance Review Authority conducts a high-level review 

of all evaluations of record and ratings across the component with the 

intent of ensuring rigor and consistency across all supervisors and 

reviewing officials and compliance with applicable laws and regulations. 

Within 45 days of the end of the performance evaluation period, all ratings 

must be finalized and approved by the reviewing officials and the 

Performance Management Performance Review Authority. 

The pay pool process begins at the same time as the performance 

management process with the establishment of pay pool structures and 

annual training to strengthen participants’ understanding about the pay 

pool process from October 1 to September 30. However, pay pools begin 

their annual deliberations about employee salary increases and bonuses 

after ratings are finalized. A pay pool is a group of individuals who share in 

the distribution of a common pay-for-performance fund. Each employee is 

assigned to a pay pool according to considerations regarding 

organizational structure, geographic location, and/or occupation. Figure 3 

illustrates a sample DCIPS pay pool structure, specifically the relationship 

between the members of each pay pool—the employee, supervisor or 

rating official, reviewing official, pay pool panel, pay pool manager, and 

performance review authority. 

Page 16 GAO-10-134 Defense Civilian Intelligence Personnel
 

Figure 3: Sample DCIPS Pay Pool Structure 

Pay Pool 1 Pay Pool 2 Pay Pool 4

Pay Pool

Performance Review Authority (PRA)

Reviewing

Official

Rating

Official

Employees Employees

Rating

Official

Reviewing

Official

Rating

Official

Employees Employees

Rating

Official

Pay Pool Manager

Pay Pool

Panel

Pay Pool 3 P

Source: DOD training materials.

Each of these pay pool members has defined responsibilities during the 

annual deliberations and pay out process. The Pay Pool Performance 

Review Authority, who can be either an individual or a panel of 

individuals,28 oversees one or more pay pools to ensure procedural 

consistency among the pay pools under its authority. The Pay Pool 

Manager provides financial, scheduling, and business rules guidance for 

the process; settles differences among panel members; and approves the 

final pay pool panel recommendations. The Pay Pool Panel members, 

which include reviewing officials and, in some cases, rating officials, are 

responsible for determining performance-based salary increases and 

bonuses using established pay pool guidance.29 Payouts are normally 

effective on the first day of the first pay period following January 1 of the 

 

28The Pay Pool Performance Review Authority might also be the head of the component. 

29DCIPS uses an algorithm to determine employee performance-based salary increases and 

bonuses. According to ODNI and USD(I), Pay Pools are not allowed to deviate from the 

algorithm unless it is documented, justified, and approved by a higher authority. 

Page 17 GAO-10-134 Defense Civilian Intelligence Personnel
 

new calendar year. The department issued overall guidance in September 

2009 regarding its pay pool business rules. 

DCIPS is a pay-banded performance management system. As such, 

employees have converted or will convert from the General 

Schedule/General Government system to five distinct pay bands. Under 

the General Schedule/General Government system, salary is determined by 

the 15-grade/10-step system.30 Pay banding consolidates these 15 grades 

into five broad pay bands, and the DCIPS pay system establishes a salary 

range for each pay band, with a minimum and a maximum pay rate. Figure 

4 illustrates which Government Grade/General Schedule pay grades/steps 

apply to each pay band during conversion. 

Schedule pay grades/steps 

Figure 4: DCIPS Pay Band Structure 

5

Pay Band 5

GG-15/01 - 15/12

Management Level 4

Professional Level 4

Pay Band 4

GG-13/01 - 14/12

Management Level 3

Professional Level 3

Pay Band 3

GG-11/01 - 13/12

Management Level 2

Professional Level 2

Technician/Support Level 3

Pay Band 2

GG-07/01 - 10/12

Professional Level 1

Technician/support Level 2

Pay Band 1

GG-01/01 - 07/12

Technician/support Level 1

4

3

1

2

Source: DOD.

 

30According to ODNI officials, the great majority of U.S. Intelligence Community employees 

occupy the top four General Schedule grades (GS-12 to GS-15), which fit in the top three 

pay bands. 

Page 18 GAO-10-134 Defense Civilian Intelligence Personnel
 

Although DOD has taken some steps to implement internal safeguards to 

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

and credible, opportunities exist to improve DOD’s implementation of 2 of 

the 10 safeguards. Specifically, DOD has taken some steps to (1) link 

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

provide a system to better link individual pay to performance in an 

equitable manner; (3) train and retrain employees and supervisors in the 

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

supervisors and employees; (5) assure meaningful distinctions in 

employee performance; (6) ensure agency resources are allocated for the 

design, implementation, and administration of the system; (7) assure that 

there is an independent and credible employee appeals mechanism; (8) 

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

involve employees in the design and implementation of the system; and 

(10) adhere to merit principles set forth in section 2301 of title 5 of the U.S. 

Code. We have previously reported that continued monitoring of such 

systems’ safeguards is needed to help ensure DOD’s actions are effective 

as implementation proceeds.31 While we believe continued monitoring of 

all of these safeguards is needed as implementation proceeds and more 

employees become covered by DCIPS, we determined that USD(I)’s 

implementation of two safeguards—employee involvement and the 

adherence to merit principles—could be improved immediately. Until 

USD(I) effectively implements all of the safeguards, employees will not 

have assurance that the system is fair, equitable, and credible, which 

ultimately could undermine employees’ confidence and result in failure of 

the system. 

DOD Has Taken Steps 

to Incorporate 

Internal Safeguards 

into DCIPS, but Two 

Safeguards and 

Monitoring Have Not 

Been Fully 

Implemented 

Link Employee Objectives 

to the Agency’s Strategic 

Goals and Mission 

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

strategic goals, mission, and desired outcomes. For example, DCIPS 

guidance32 stipulates that employees’ individual performance objectives33

should align with the goals and objectives of the National Intelligence 

Strategy, DOD, and the employee’s organization. Specifically, an 

 

31GAO-08-773. 

32Department of Defense Instruction 1400.25-V2011, DOD Civilian Personnel Management 

System: Defense Civilian Intelligence Personnel System(DCIPS) Performance 

Management System (August 14, 2009). 

33Performance objectives relate individual job assignments or position responsibilities 

and/or accomplishments to performance elements and standards and the mission, goals, 

and objectives of the DCIPS component. 

Page 19 GAO-10-134 Defense Civilian Intelligence Personnel
 

employee, in conjunction with a rating official and supervisor (if 

different), will establish approximately three to six performance 

objectives, which set specific performance targets for the individual, and 

link to National Intelligence Strategy, departmental, and component goals 

and objectives.34 Further, according to the DCIPS guidance, performance 

objectives for non-supervisory employees should be appropriate to the 

employee’s pay band, pay, and career or occupation category, and will be 

structured such that they are specific, measurable, achievable, relevant, 

and time-limited (SMART). The guidance further requires the creation of 

annual performance plans, to serve as records of the performance 

planning process, which are to be reviewed and approved by reviewing 

officials to ensure they are consistent with organizational goals and 

objectives. DOD officials we spoke with identified SMART objectives as 

the primary method of linking individual employee performance objectives 

to agency mission and goals. Figure 5 illustrates how an individual’s 

SMART objectives align to agency and National Intelligence Strategy goals. 

dual’s 

Figure 5: Alignment of SMART Objectives to National Intelligence Strategy Goals 

National Defense Strategy / National Intelligence Strategy

Defense Intelligence Strategy

Component Strategic Plan

Directorate Strategic Plan

Office/Division Goals

Employee SMART Objectives

Source: GAO analysis of DOD data.

 

34Performance targets may be quantitative or non-quantitative. 

Page 20 GAO-10-134 Defense Civilian Intelligence Personnel
 

USD(I) officials stated that DCIPS’s design allows for a better linkage 

between individual pay and performance than the previous General 

Schedule pay scale. DCIPS policy requires that DCIPS shall provide a basis 

for linking performance-based pay increases and bonuses to (1) individual 

accomplishments, (2) demonstrated competencies, and (3) contributions 

to organizational missions and results—such that the greatest rewards go 

to those who make the greatest contributions, consistent with both 

performance and competitive pay administration principles.35 Moreover, 

DCIPS draft guidance states that the goal of the system is that it provide 

for a reward system that attempts to motivate employees to increase their 

performance contribution, making the employees’ level of performance 

commensurate with their total compensation. Several DCIPS components 

we spoke with, including the Army, Marine Corps, and Air Force, cited 

DOD’s Compensation Work Bench, a computerized tool that calculates pay 

increases by using performance ratings and pay pool information as a 

primary mechanism for quantitatively connecting individual performance 

and pay. In addition, the same components also cited the Performance 

Appraisal Application, an online tool for monitoring employee 

performance throughout a rating cycle, as another means of establishing 

such linkage.36 Although DOD has created policy to better link an 

individual’s pay to performance, it is too soon, given the current 

implementation status, to determine the extent to which pay will be 

equitably linked to performance, as a full performance cycle has not been 

completed and DCIPS payouts have not yet occurred.37

Link Individual Pay to 

Performance in an 

Equitable Manner 

Provide Training in the 

Implementation and 

Operation of the System 

DOD has taken several steps to provide extensive training to DCIPS users 

in the implementation and operation of the performance management 

system. For example, DCIPS policy requires that employees be trained in 

the system, and that rating officials, supervisors, pay pool managers, and 

pay pool members be trained in their responsibilities. According to 

USD(I), each of the DCIPS components is required to implement training, 

 

35Department of Defense Instruction 1400.25-V2012, DOD Personnel Management System: 

Defense Civilian Intelligence Personnel System (DCIPS) Performance-Based 

Compensation (September 15, 2009). 

36The Performance Appraisal Application documents performance objectives, mid-point 

feedback, final feedback, and employee performance ratings. 

37As previously noted, six DCIPS components were expected to receive their first payout 

under DCIPS in January 2010, while the remaining four were expected to receive payouts in 

January 2011. 

Page 21 GAO-10-134 Defense Civilian Intelligence Personnel
 

tailoring any materials provided by USD(I) as necessary to meet the needs 

of its workforce. Additionally, there are currently a number of training 

mechanisms, including Web-based courses, classroom sessions, and town 

hall forums—so employees have a range of opportunities to learn about 

DCIPS. USD(I) provided a training curriculum that includes courses such 

as DCIPS 101, Managing Performance, and DCIPS Compensation 

Fundamentals. Some training tools are designed for distinct groups (i.e., 

supervisors, human resource personnel, etc.) in order to ensure that 

different groups have a contextual understanding of DCIPS. See appendix 

V for a list of major courses in this curriculum. 

Officials we spoke with at a number of DCIPS components stated that they 

offer a variety of classroom and Web-based training tools, some of which 

were adapted from USD(I) training in order to better suit the needs of the 

component’s workforce. For example, one component modified USD(I)’s 

iSuccess course, which provides employees with step-by-step instruction 

on how to write SMART performance objectives and self-assessments. 

Other components have employed innovative approaches to training, such 

as conducting joint training sessions with employees and supervisors in 

order to increase transparency and to open dialogue between the two 

groups. 

Additionally, USD(I) administered a number of training evaluations for its 

introductory DCIPS courses that indicated that employees generally 

viewed the training as informative and beneficial. However, during our 

nongeneralizable discussion groups with employees, we found that 

employee perceptions of training were somewhat mixed, as participants at 

9 of our 13 discussion group sites stated that too many questions regarding 

DCIPS went unanswered, including questions posed during training. In 

particular, employees in one discussion group stated that training on 

developing performance objectives was not helpful because it focused on 

developing objectives for jobs that had very specific outputs, such as 

making widgets. Although such feedback indicates that the breadth of 

training offerings, as well as the scope and/or format of individual 

sessions, could be improved, we note that we conducted our discussion 

groups during April 2009 and May 2009, and according to one USD(I) 

official, new training courses have since been added, such as 

Compensation Fundamentals. 

Page 22 GAO-10-134 Defense Civilian Intelligence Personnel
 

DCIPS policy requires that rating officials and/or supervisors38 provide 

employees with meaningful, constructive, and candid feedback relative to 

their progress against performance expectations in at least one 

documented midpoint performance review and an end-of-year review.39 In 

addition, guidance requires rating officials and employees to engage in 

dialogue throughout the rating period to, among other things, develop 

performance objectives and an individual’s development plan. They are 

also required to discuss progress toward achieving performance 

objectives, behaviors related to successful performance, and individual 

employee development. Most of the DCIPS components we spoke with 

stated that additional feedback beyond the minimum required guidance is 

encouraged, but not mandatory. Formal feedback between employees and 

supervisors should be documented in the Performance Appraisal 

Application—DOD’s online performance management tool. At 7 of the 13 

sites we visited, discussion group participants told us that communication 

with supervisors has increased under DCIPS, with most interactions being 

face-to-face, as encouraged by DOD. 

Ensure Ongoing 

Performance Feedback 

and Dialogue between 

Supervisors and 

Employees 

Assure Meaningful 

Distinctions in Individual 

Employee Performance 

DCIPS is intended to create a performance management system that 

provides meaningful distinctions in employee performance.40 However, 

because performance evaluations have yet to occur under DCIPS, it is 

unclear the extent to which ratings will actually result in meaningful 

distinctions. Unlike the pass fail system, which some of the employees 

were under, the performance ratings scale for DCIPS consists of five rating 

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

and the highest rating is a “5” (outstanding performance). 41 Ratings are 

 

38In most cases, supervisors will be the rating official for employees under their direct 

supervision. 

39Department of Defense Instruction 1400.25-V2011, DOD Personnel Management System: 

Defense Civilian Intelligence Personnel System (DCIPS) Performance Management 

(August 14, 2009). 

40Enclosure 2 of the Department of Defense Instruction 1400.25-V2011, DOD Civilian 

Personnel Management System: Defense Civilian Intelligence Personnel System (DCIPS) 

Performance Management (August 14, 2009), sets out the reconsideration process by 

which employees who disagree with their rating may challenge it. Specifically, DCIPS 

policy states that the Performance Management Performance Review Authority (PRA), 

will, at an employee’s request, reconsider an individual’s rating. 

41Employees may also receive a rating of “Not Rated” if there was insufficient opportunity 

to complete an objective because it became obsolete due to changing mission requirements 

or because of extenuating circumstances. 

Page 23 GAO-10-134 Defense Civilian Intelligence Personnel
 

determined by comparing employee performance against performance 

standards for the employee’s pay-band level. 

Officials we spoke with at USD(I) and the DCIPS components also cited 

other mechanisms to implement this safeguard. For example, USD(I) told 

us that distinctions in individual employee performance will also be made 

through the bonus process. While all employees with performance 

evaluations rated Successful or above will be eligible, USD(I) officials 

expect that only 45 percent to 50 percent of employees who are eligible 

will receive a bonus. A USD(I) official noted that limiting bonuses to less 

than 50 percent of the staff will make bonuses more meaningful. Also, to 

ensure accountability at the supervisory level, one of the components told 

us it requires supervisors to demonstrate how they make distinctions in 

ratings as part of their own performance objectives. Finally, DOD officials 

stated that the mock performance review process will provide an 

opportunity to determine how meaningful distinctions in performance will 

be made, as well as a chance to garner lessons learned for assessing 

performance. 

Several of our discussion group participants expressed concern that there 

is potential for a “forced distribution” of ratings (i.e., a fixed numeric or 

percentage limitation on any rating level), which could effectively erode 

meaningful distinctions in individual employee performance. However, 

USD(I) officials told us that they had informed the components that forced 

distributions of ratings are unacceptable and potentially illegal, and that 

USD(I) has emphasized rigor and consistency in ratings throughout 

DCIPS’s implementation by way of leadership training and the 

Performance Review Authority. Additionally, in August 2009, USD(I) 

posted a statement on the DCIPS Web site reiterating its prohibition on 

forced distribution of ratings found in DCIPS guidance.42

 

42Department of Defense Instruction 1400.25-V2011, DOD Civilian Personnel Management 

System: Defense Civilian Intelligence Personnel System (DCIPS) Performance 

Management (August 14, 2009). 

Page 24 GAO-10-134 Defense Civilian Intelligence Personnel
 

DOD, through USD(I), has taken steps to ensure that agency resources are 

allocated for the implementation and administration of DCIPS. For 

example, DCIPS guidance provides for an initial permanent salary increase 

budget that is no less than what would have been available for step 

increases, quality step increases, and within-band promotions under the 

previous personnel system.43 Further, USD(I) will conduct, in coordination 

with the components, an annual analysis of salary adjustments to 

determine the effects on the distribution of the workforce within pay 

bands, position of the workforce relative to the applicable labor market, 

anticipated adjustments to the ranges, and projected General Schedule

increases for the year in which the next payout is to be effective. 

Means to Ensure Adequate 

Agency Resources Are 

Allocated for the System’s 

Design, Implementation, 

and Administration 

Funding for the implementation of DCIPS was drawn from two primary 

funding streams including: 1) the National Intelligence Program, and 2) 

Military Intelligence Program. According to USD(I), funding was used to 

cover the costs associated with conversion, including training, technology, 

and Within-Grade Increases. USD(I) and several of the DCIPS components 

we spoke with indicated that resources were sufficient to implement the 

system. In particular, one component told us that the Office of the Director 

for National Intelligence has been very receptive to resource concerns and 

had asked to be notified of any shortfalls. In fact, at the time of our review, 

only one DCIPS component told us it had requested additional funds for a 

shortfall. In addition, USD(I) created a resource management group 

consisting of Chief Financial Officer officials from each DCIPS component 

in order to ensure the proper level of funding is available for payouts 

beginning in 2010. 

Assure an Independent, 

Credible Employee 

Appeals Mechanism 

We previously identified an independent and credible employee appeals 

mechanism as a key component to ensuring that pay-for performance 

systems are fair, effective, and credible.44 DCIPS does not provide a 

distinct mechanism for employees to appeal adverse actions. Instead, it 

relies on existing agency procedures to fulfill this function, so that each of 

the defense intelligence components has its own appeals mechanism. 

 

43Department of Defense Instruction 1400.25-V2012, DOD Personnel Management System: 

Defense Civilian Intelligence Personnel System (DCIPS) Performance-Based 

Compensation (September 15, 2009). 

44GAO, Post-Hearing Questions for the Record Related to the Department of Defense’s 

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

2006). 

Page 25 GAO-10-134 Defense Civilian Intelligence Personnel
 

According to USD(I) officials, guidance that would provide DCIPS a 

distinct employee appeals mechanism is in draft. When issued, according 

to these officials, this guidance will provide the minimum requirements for 

adverse action appeals, including fundamental due process, based on the 

requirements established in chapter 75 of title 5 of the U.S. Code. 

According to ODNI officials, chapter 75 does not statutorily apply to 

DCIPS. Rather, DOD is adopting these standards pursuant to ODNI 

Intelligence Community Directives. Additionally, ODNI guidance provides 

that employees will receive due process in any adverse action, as defined 

by applicable law and regulation, involving performance, as established by 

their respective departments or agencies, including an objective and 

transparent appeals process.45 

Assure Reasonable 

Transparency of the 

System and Its Operation 

DOD has taken steps to ensure a reasonable amount of transparency is 

incorporated into the implementation of DCIPS. For example, in contrast 

to the National Security Personnel System—which uses a system of 

weighted shares to determine employee payouts—DCIPS uses a software 

algorithm, available to all DCIPS employees, to calculate salary increases 

and bonus awards. 46 In addition, USD(I) officials told us that USD(I) has 

communicated the performance management process through town hall 

meetings, DCIPS Web sites, quarterly newsletters, and letters from USD(I) 

management. Similarly, the DCIPS components are individually 

conducting a range of activities to provide transparency, such as their own 

town halls and open forum discussions. In particular, officials from one 

component told us that they conducted a survey of employees to 

determine how they received information about DCIPS and how they 

preferred to receive such information in the future. According to USD(I) 

officials, sharing aggregate rating results with employees is key to 

ensuring transparency and ultimately to gaining employee acceptance of 

the system. These officials also told us that they are instructing the DCIPS 

components to publish aggregate rating results. In fact, in September 2009, 

USD(I) provided a template for reporting DCIPS performance evaluation 

and payout results to the workforce. USD(I) officials stated that while the 

template can be tailored to suit specific agency needs, it will also establish 

 

45Intelligence Community Directive Number 650: National Intelligence Civilian 

Compensation Program, Guiding Principles and Framework. 

46For more information regarding the National Security Personnel System use of shares, see 

GAO-08-773. See appendix VI of this report for a comparison of some of the features of 

DCIPS and the National Security Personnel System. 

Page 26 GAO-10-134 Defense Civilian Intelligence Personnel
 

a common way of reporting in which individual employees will be able to 

see where they stand relative to their peers and within pay bands. 

Separately, according to these same officials, USD(I) also plans to publish 

rating results at the department level by merging the results of all pay pool 

data from each of the DCIPS components. According to ODNI officials, 

they intended to do the same for Intelligence Community-wide results. 

Involve Employees in the 

Design and 

Implementation of the 

System 

USD(I) and the defense intelligence components have taken some steps to 

involve employees in the implementation of DCIPS, however more 

opportunities exist to expand this involvement. As we previously reported, 

involvement in a performance management system’s design and 

implementation must be early, active, and continuing if DOD employees 

are to gain a sense of understanding and ownership of the changes that are 

being made.47 Specifically, USD(I) and the defense intelligence 

components have used various mechanisms to obtain employee input. For 

example, USD(I) sponsored a survey to validate performance 

competencies for DCIPS and administered training evaluations for a 

variety of DCIPS courses, covering topics such as SMART objectives. In 

addition, the defense intelligence components conducted town hall 

meetings to provide domestic and overseas employees with information 

about DCIPS and to communicate with the workforce. 

According to a USD(I) official, the components possess considerable 

discretion regarding the nature and extent of employee involvement at the 

agency level, and as such, have independently employed a number of 

feedback mechanisms, including discussion groups and “brown bag” 

meetings. In most cases, the impact of such efforts is unclear; however, 

officials at one DCIPS component told us that some employee concerns 

were elevated to the Defense Intelligence Human Resources Board and 

actions were taken. For example, some employees expressed concerns 

about the elimination of career ladders, which eventually resulted in a 

policy change allowing employees who were hired under a particular 

career ladder to remain in that career ladder under DCIPS. Similarly, 

USD(I) provided us with a draft guide to writing effective performance 

objectives, which, according to officials, was produced at the request of 

employees that attended a pilot training course. 

 

47GAO, Post-Hearing Questions Related to the Department of Defense's National Security 

Personnel System, GAO-05-641R (Washington, D.C.: April 2005). 

Page 27 GAO-10-134 Defense Civilian Intelligence Personnel
 

While the above-mentioned steps demonstrate a commitment to engage 

the workforce, USD(I) has not taken advantage of other opportunities to 

expand such efforts by establishing a formal process for the continuous 

involvement of employees in DCIPS. As we previously reported, leading 

organizations involve employees directly and consider their input before 

finalizing key decisions—such as draft guidance.48 Although USD(I) 

officials stated they allow employees to comment on draft guidance, 

USD(I) does not have, in its guidance, a formalized process for the 

continued and direct involvement of employees in the development and 

implementation of DCIPS. This is of concern, since employees and 

supervisors in discussion groups at 12 of the 13 sites we visited indicated 

that they had limited or no involvement in the design and implementation 

of the system. Without continuous employee involvement in the 

implementation of DCIPS, employees may experience a loss of ownership 

over the system, which could ultimately undermine its credibility. 

Adherence to Merit 

Principles 

USD(I) has taken steps to ensure that DCIPS incorporates the merit 

principles set forth in section 2301 of title 5 of the U.S. Code.49 The Office 

of Personnel Management has noted that prior to rolling out an alternative 

personnel system, an agency should document its business processes and 

procedures associated with all aspects of the system.50 In September 2009, 

USD(I) provided to us a document that stipulates that no later than March 

31, 2010, components will provide the USD(I) Human Capital Management 

Office with detailed data, including demographic analysis, on performance 

evaluation and payout results. In September 2009, USD(I) also published a 

template for publishing DCIPS performance evaluation and payout results 

to the workforce. This template provides a sample aggregate workforce 

report for employees, which contains demographic-based reporting 

categories, including gender, race, ethnicity, age, disability status, and 

 

48GAO, Human Capital: DOD’s National Security Personnel System Faces 

Implementation Challenges, GAO-05-730 (Washington, D.C.: July 2005), and Posthearing 

Questions Related to Proposed Department of Homeland Security (DHS) Human Capital 

Regulations, GAO-04-570R (Washington, D.C.: March 2004). 

49Section 2301 of title 5 of the U.S. Code sets out the merit principles. One principle states 

that employees and applicants for employment should receive fair and equitable treatment 

in all aspects of personnel management without regard to political affiliation, race, color, 

religion, national origin, sex, marital status, age, or handicapping condition, and with 

proper regard for their privacy and constitutional rights. 

50Office of Personnel Management, Alternative Personnel Systems Objectives-Based 

Assessment Framework Handbook (Washington, D.C.: October 2008). 

Page 28 GAO-10-134 Defense Civilian Intelligence Personnel
 

veterans’ status and provides details to report to employees, including 

each groups’ average rating, salary increase, and bonus. 

While notable, this 2009 document, however, does not specify what data 

are to be collected for the post-decisional demographic analysis,51 how the 

data should be analyzed, what process the components should follow to 

investigate potential barriers to fair and equitable ratings and their causes, 

or a process for eliminating barriers that are found. Until DOD specifies 

these steps in its guidance, the intelligence components may not follow a 

consistent approach in these areas, the department may be unable to fully 

determine whether potential barriers to fair and equitable ratings exist, 

and employees may lack confidence in the fairness and credibility of the 

DCIPS and its ratings. To help ensure equity, fairness, and nondiscrimination in ratings, we are recommending that DOD issue guidance 

on its analysis of finalized ratings that explains how the demographic 

analysis of ratings is to be conducted. 

DOD’s Initial Plans to 

Monitor DCIPS and the 

Safeguards 

We have previously reported with another pay-for-performance system 

that continued monitoring of safeguards is needed to help ensure that a 

department’s actions are effective as implementation progresses.52 We 

have also reported that adequate evaluation procedures would, among 

other things, facilitate better congressional oversight, allow for any 

midcourse corrections, assist DOD in benchmarking its progress, and help 

document best practices and lessons learned with employees and other 

stakeholders.53 In October 2009, DOD provided us with a draft evaluation 

plan that details tentative procedures to monitor and evaluate DCIPS 

implementation, including all of the safeguards. For example, it provides 

for the examination of the relationship between performance ratings and 

annual performance payouts, and establishes methods of obtaining 

employee feedback, such as attitude surveys, interviews, and focus 

groups. 

According to DOD officials, they do not expect to execute the evaluation 

plan until after the first payout, in January 2010. DOD’s efforts to draft an 

 

51Post decisional analysis of demographic information occurs after ratings and payouts are 

final to determine if potential barriers to fair and equitable ratings exist and form the basis 

on which an organization would take corrective actions to address these barriers. 

52GAO-08-773. 

53GAO-05-730. 

Page 29 GAO-10-134 Defense Civilian Intelligence Personnel
 

evaluation plan are notable; however, without finalizing and executing 

such a plan, the department will not have a clear understanding of whether 

it is achieving its desired outcomes as part of implementing the new 

performance management system for its intelligence components. 

At the time of our review, DOD had several mechanisms to engage 

employees and provide information. However, these mechanisms did not 

comprehensively identify employee perceptions. GAO conducted 26 

discussion groups, which while not generalizable, did show that 

employees and supervisors had mixed views about certain aspects of the 

system. Additionally, DOD’s planned mechanisms do not include certain 

questions related to the safeguards. 

DOD Had Several 

Mechanisms to 

Provide Information 

to Employees, but 

These Did Not 

Comprehensively 

Identify Employee 

Perceptions of DCIPS, 

and Future 

Mechanisms Do Not 

Include Some Needed 

Questions 

DOD Had Several 

Mechanisms to Provide 

Information to Employees, 

but These Did Not 

Comprehensively Identify 

and Address Employee 

Perceptions 

DOD, at the time of our review, had several mechanisms in place to 

provide information to employees about DCIPS; however, these 

mechanisms did not comprehensively identify and address employee 

perceptions. Specifically, the defense intelligence components conducted 

numerous town hall meetings to brief employees on DCIPS—covering 

such topics as the performance management cycle and roles and 

responsibilities of employees/supervisors---and to understand their 

concerns. USD(I) also maintained a Web site that contained frequently 

asked questions submitted by employees and USD(I)’s response. Some of 

the frequently asked questions provided by the naval Intelligence 

Community, as an example, included: 

• Will basic civil service protections be preserved, such as whistle 

blower protections and veteran’s preference? 

• What safeguards will be in place to ensure that DCIPS rewards merit 

for merit's sake, and does not cater to nepotism and cronyism? 

Page 30 GAO-10-134 Defense Civilian Intelligence Personnel
 

USD(I) officials stated that it has used several other mechanisms, 

including site visits and the annual Intelligence Community Climate 

Survey, to collect employee opinions on various management policies and 

practices.54 While these efforts are notable, these mechanisms do not 

comprehensively identify employee perceptions of DCIPS. However, 

USD(I) does have plans to implement additional mechanisms that will be 

discussed later in this report. 

Employees and 

Supervisors in Discussion 

Groups Expressed Mixed 

Views regarding Some 

Aspects of DCIPS 

The non-generalizable results of the discussion groups we conducted 

identified, among other things, mixed views about certain aspects of the 

system. Specifically, our discussion groups identified areas that employees 

and supervisors found positive regarding DCIPS and several areas where 

they expressed a consistent set of concerns about DCIPS, some of which 

are listed below. Our prior work, as well as that of the Office of Personnel 

Management,55 has recognized that organizational transformations, such as 

the adoption of a new performance management system, often entail 

fundamental and radical changes that require an adjustment period to gain 

employees’ trust and acceptance. As a result, we expect major change 

management initiatives in large-scale organizations to take several years to 

be fully successful. 

At 7 of the 13 locations visited, discussion group participants generally 

expressed positive views about the concept of pay for performance. For 

example, employees at one location stated they like the idea of linking pay 

to performance and think that there is more opportunity for financial 

growth. Additionally, supervisors at another location stated they thought 

DCIPS is a better system than pay for tenure/time. At another location, 

supervisors stated they liked the concept of DCIPS because they felt pay 

for performance will reward the hard workers. However, participants in 9 

of 13 discussion groups felt that DCIPS was being implemented too 

quickly. Additionally, employees and supervisors at 9 of the 13 locations 

visited said too many questions about DCIPS went unanswered. For 

example, employees at one location felt that in-class instructors were 

Employees Generally 

Expressed Positive Views 

about the Concept of Pay-forPerformance but Were 

Concerned About the Pace of 

Implementation 

 

54The Intelligence Community Climate Survey collecting this information is to study and 

report attitudes and perceptions of the Intelligence Community workforce regarding their 

work environments, with a focus on various management policies and practices that affect 

them—not specifically perceptions about DCIPS. 

55Office of Personnel Management, Working for America: Alternative Personnel Systems 

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

Page 31 GAO-10-134 Defense Civilian Intelligence Personnel
 

unable to provide answers to basic questions about DCIPS and its 

implementation. Further, supervisors in another location stated they felt 

unprepared to answer employee questions about DCIPS. 

Participants at 10 of the 13 locations visited said the amount of time spent 

working on DCIPS diverts attention from their mission work. For example, 

supervisors at one location stated mission activities have taken a back seat 

to the activities required to implement DCIPS, and at another location 

supervisors were dismayed by the significant amount of time the rating 

process entails. Both employees and supervisors at several locations also 

felt that DCIPS was a tremendous administrative burden. For example, 

supervisors in one discussion group stated the administrative burden is a 

“nightmare,” while supervisors in another discussion group stated DCIPS 

is too time-consuming, takes away from actual work of value, monopolizes 

the chain of command at critical moments; and is overly laborious without 

tangible benefits compared with other systems. Other supervisors stated 

employees are now more focused on DCIPS metrics than their actual jobs. 

Moreover, employees in one discussion group stated that DCIPS is a 

detriment to the mission because it is a huge administrative burden that 

takes one away from performing his or her mission work. 

Amount of Time Spent on 

Performance Management 

Diverts Attention from Mission 

Work 

DOD Plans to Implement 

Mechanisms to 

Comprehensively Identify 

and Address Employee 

Perceptions 

We have previously reported that high-performing organizations 

continuously review and revise their performance management systems 

based on data-driven lessons learned and changing needs in the 

environment.56 Consistent with this approach, USD(I) officials have 

drafted four surveys to be used by the components that will cover various 

parts of DCIPS (training, performance objectives, ratings process, and 

payouts) and be accompanied by guidance on how to assess survey 

results. However, while these surveys cover aspects of DCIPS, they lack 

questions that would provide insight on certain aspects of the safeguards, 

such as the likelihood an employee would utilize the internal grievance 

process to challenge a rating. Additionally, the surveys—at the time of our 

review—did not directly ask questions or measure employees’ overall 

acceptance of DCIPS. Further, it is unclear exactly when these surveys 

will be implemented, although USD(I) officials said they hoped to start 

soon in order to capture baseline feedback from the first year. USD(I) 

officials further said the results of the surveys will inform future changes 

to DCIPS. However, without implementing a mechanism—like the four 

 

56GAO-07-90.

Page 32 GAO-10-134 Defense Civilian Intelligence Personnel
 

surveys that include questions regarding certain safeguards, such as the 

internal grievance process—DOD may not be able to comprehensively and 

accurately identify and measure employee perceptions. 

Human capital reform is one of the most significant transformations in the 

federal government. In our 2009 High-Risk Series update, we identified the 

importance of developing a clear linkage between individual employee 

performance and organizational success and pointed out that the success 

of implementing a performance management system is contingent on how, 

when, and the basis on which it is done. However, at the end of this 

review, legislation was signed by the President that contained provisions 

that affect DCIPS. As mentioned previously, the USD(I) November 3, 2009, 

memorandum to the defense intelligence workforce noted that the 

legislation did not repeal or terminate DCIPS, but suspended certain 

provisions of the DCIPS pay-setting regulations until December 31, 2010, 

to allow for an independent review of DCIPS. This memorandum also 

stated that the department would continue to press forward with unifying 

the defense Intelligence Community under a common personnel system 

and specifically noted that the National Geospatial-Intelligence Agency 

would continue under all DCIPS regulations—as allowed by the 

legislation—and would be the focus of the department’s review of DCIPS. 

We have acknowledged in prior work on performance management 

systems that moving too quickly or prematurely could have detrimental 

consequences for such systems. The additional review of DCIPS efforts to 

date may provide the department time needed to address any potential 

issues and help ensure successful implementation. 

Conclusions 

We have further reported that a basic framework is needed to implement 

major reforms, including performance management systems. Our prior 

reports make it clear that incorporation of internal safeguards is 

fundamental for the effective implementation of performance management 

systems. Further, we have reported that committed top leadership and 

involving employees in a new performance management system is a 

continuous process. While we recognize that DOD faces many challenges 

in changing the culture to implement a pay-for-performance system 

capable of serving the entire DOD Intelligence Community, we believe that 

it is imperative that DOD continue to explore ways to build employee 

confidence in the system to help ensure the system’s success. By partially 

incorporating the two safeguards we specifically mention, DOD could put 

the fairness and credibility of DCIPS at risk. However, given the newness 

of DCIPS, constant monitoring of all safeguards is a prudent course of 

action. Further, without developing an evaluation plan that assesses 

Page 33 GAO-10-134 Defense Civilian Intelligence Personnel
 

DCIPS, including the safeguards, the department will be unable to 

determine if it is meeting its intended human capital reform goals. 

Finally, until DOD implements its mechanism to comprehensively and 

accurately identify and measure employee perceptions, including 

questions related to the safeguards such as the internal grievance process, 

it is not well positioned to develop a strategy to effectively address 

concerns raised by employees regarding DCIPS. Employees are the 

number one stakeholders in this type of transformation. With employees 

from the National Geospatial-Intelligence Agency being the only 

employees continuing under DCIPS regulations and given the agency’s 10-

year history with a pay for performance human capital system, the 

perspective of those employees will provide DOD with valuable insights as 

it reviews DCIPS and monitors the implementation of the safeguards. As 

the Office of Personnel Management and other studies have shown, it 

takes time for employees to accept organizational transformation—in this 

case, a move to a performance management system. As a result, employee 

acceptance of the system—both eligible employees in the defense 

intelligence components as well as those in the National GeospatialIntelligence Agency—is dependent on those employees’ involvement in the 

system’s design and implementation. Ultimately, the success of the system 

is dependent on this acceptance. 

To improve DOD’s implementation of internal safeguards in DCIPS, and 

mechanisms to identify employee perceptions of it, we recommend that 

the Secretary of Defense direct that the Under Secretary of Defense for 

Intelligence take the following four actions: 

Recommendations for 

Executive Action 

• Issue guidance to institutionalize a process to involve employees 

continually in future design and implementation changes to DCIPS; 

• Issue guidance on its analysis of finalized ratings that explains how the 

demographic analysis of ratings is to be conducted, to help ensure 

equity, fairness, and non-discrimination in ratings; 

• Finalize and execute its evaluation plan with metrics to assess the 

system, including the implementation of internal safeguards, to help 

ensure the department evaluates the impact of DCIPS; and 

• Expeditiously implement mechanisms—including the four surveys—

that comprehensively and accurately identify and measure employee 

perceptions; and ensure those mechanisms include questions regarding 

certain safeguards, such as the internal grievance process and 

employees’ acceptance of DCIPS. 

Page 34 GAO-10-134 Defense Civilian Intelligence Personnel
 

We provided a draft of this report to DOD and ODNI. DOD, in written 

comments, concurred with all of our recommendations. We provided 

ODNI with a draft of this report because, though not the focus of our 

review, ODNI has played a significant role in strategic human capital 

management reform for the U.S. Intelligence Community and is thus well 

positioned to provide additional insights and comments on DCIPS and 

companion efforts in the Intelligence Community. Both DOD and ODNI 

provided us with technical comments, which we incorporated in this 

report, as appropriate. DOD’s and ODNI’s written comments are reprinted 

in their entirety in appendixes VII and VIII, respectively. 

Agency Comments 

and Our Evaluation 

In its written comments, DOD noted there are inherent challenges implicit 

in implementing a change of this magnitude—specifically establishing a 

common DCIPS framework within the defense intelligence components 

that is fair and equitable, consistent, and transparent. We agree with the 

department and note in our report that change of this magnitude can take 

several years to be fully successful. Furthermore, DOD characterized our 

recommendations as logical next steps in the evolution of DCIPS and 

elaborated on specific steps it was taking to address each of our 

recommendations. First, DOD stated that, as recommended, it was 

developing guidance to more formally institutionalize a process to involve 

employees continually in design, implementation, and evaluation to the 

evolving DCIPS. DOD noted that since the Intelligence Community does 

not have employee bargaining units, it is all the more important to ensure 

a robust and consistent process for employee engagement. Second, 

regarding our recommendation that DOD issue guidance on the analysis of 

its ratings, the department noted that it issued initial guidance and was 

finalizing guidance for individual components that takes into account 

requirements of the Fiscal Year 2010 National Defense Authorization Act. 

Third, DOD stated that, as recommended, it was in the process of 

finalizing the DCIPS evaluation plan with metrics to assess the system and 

stated that the department recognized the importance of evaluating 

DCIPS. Fourth, DOD stated that, as recommended, it was finalizing plans 

to develop mechanisms that comprehensively and accurately identify and 

measure employee perceptions. DOD also noted that, as recommended, 

the mechanisms would include questions regarding certain safeguards, 

such as the internal grievance process and employees’ acceptance of 

DCIPS. If implemented in accordance with our recommendations, the 

department’s actions appear to be a positive step in helping ensure 

fairness, equity, and credibility of the personnel system. 

In written comments, ODNI stated that it appreciated the opportunity to 

comment on our report, thought the overall tone of the report was fair and 

Page 35 GAO-10-134 Defense Civilian Intelligence Personnel
 

balanced; but noted that they felt the reports Highlights page, unlike the 

overall report, was overly negative. We reevaluated our Highlights page to 

ensure that it appropriately reflected our findings as seen throughout the 

report and made some changes to address ODNI’s comments about tone. 

For example, we previously enumerated the ten safeguards in the 

highlights page but deleted a number of those to incorporate specific 

actions that DOD had taken to more directly mirror language in other parts 

of our report. ODNI also stated that it believed our report should 

emphasize that DCIPS was authorized by statute in 1997 and is separate 

and distinct from the National Security Personnel System.57 Our draft 

noted both of these points. ONDI also noted in its comments that it 

believed our report should emphasize that DCIPS and the NICCP are 

intended to meet the goals of the Intelligence Reform and Terrorism 

Prevention Act of 2004. We have made appropriate changes to our report 

but note also that we reviewed the implementation of DCIPS and not 

ODNI’s National Intelligence Civilian Compensation Program. ODNI 

further stated that Intelligence Community Directive 650 clearly lays out 

10 guiding principles that very closely align to the 10 criteria we chose for 

our review. We agree but note that our objective was not to determine 

whether DCIPS met the intent of Intelligence Community Directives but 

rather to determine whether DCIPS incorporated the safeguards identified 

in our prior work as best practices for public and private performance 

management systems. ODNI also commented that change is often difficult 

for employees to accept and there will always be some employee 

discomfort; however, these officials believed that this discomfort is more a 

reflection of where DCIPS is in its implementation schedule than with any 

material defect with system’s design. We also acknowledge, in our draft 

and in prior reports, that major change management initiatives in largescale organizations take several years to be fully successful. ODNI 

expressed an appreciation for our comprehensive review and our 

recommendations to DOD and agreed to work with USD(I) in an 

expeditious manner to address the areas we identified. ODNI made a 

number of other technical comments that we considered and incorporated 

into our draft, as appropriate. 

 

57Human Capital: Monitoring of Safeguards and Addressing Employee Perceptions Are 

Key to Implementing a Civilian Performance Management System in DOD. GAO-10-102. 

Washington, D.C.: October 28, 2009. 

Page 36 GAO-10-134 Defense Civilian Intelligence Personnel
 

We are sending copies of this report to the appropriate congressional 

committees and the Secretary of Defense. In addition, this report will be 

available at no charge on GAO’s Web site at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact 

me at (202) 512-3604 or by e-mail at farrellb@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made major contributions to 

Brenda S. Farrell 

the report are listed in appendix IX. 

Director, Defense Capabilities and Management 

Page 37 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix I: The National Intelligence Civilian Appendix I: The National Intelligence Civilian Compensation Program 

Compensation Program 

In March 2005, the Commission on the Intelligence Capabilities of the 

United States Regarding Weapons of Mass Destruction recommended to 

the President that the Director of National Intelligence use its human 

resources authority to create a uniform system for performance 

evaluations and compensation, and develop a more comprehensive and 

creative set of performance incentives. In response to the commission’s 

recommendation, the Director of National Intelligence established the 

National Intelligence Civilian Compensation Program (NICCP), which 

creates a uniform system of performance evaluation and compensation for 

the Intelligence Community's civilian workforce and aims at building a 

culture of collaboration across the Intelligence Community.1

 NICCP 

represents a fundamental shift from the current General Schedule pay 

scale to a more performance-based, market model. The cornerstone of the 

Office of the Director of National Intelligence’s approach to establishing 

NICCP has been inter-departmental collaboration within the Intelligence 

Community. An ODNI official noted that NICCP essentially acts as a 

"treaty", or common, framework that establishes the performance 

management and pay rules that are to be commonly and consistently 

applied across the Intelligence Community. 

Specifically, NICCP institutes a common set of core requirements such as 

setting basic rates of pay, managing performance, and pay based on 

performance. This framework also includes establishing six common 

performance elements by which all Intelligence Community civilian 

employees will be assessed. Specifically, these include Accountability for 

Results, Communication, Critical Thinking, Engagement and 

Collaboration, Personal Leadership and Integrity, and Technical Expertise. 

Supervisors will also be evaluated on six performance elements, of which 

they share four with non-supervisors—Accountability for Results, 

Communication, Critical Thinking, Engagement and Collaboration—and 

two that are unique to them, Leadership and Integrity, and Management 

Proficiency. Additionally, rating levels under this new system are from 1 

to 5—with 1 being unacceptable performance and 5 being outstanding 

performance 

In addition to being applicable to Intelligence Community employees 

within DOD, NICCP is also applicable to certain other national intelligence 

 

1

The Office of the Director of National Intelligence, Intelligence Community Pay 

Modernization, United States Intelligence Community: Building A Culture of 

Collaboration, Fact #1 (March 2009). 

Page 38 GAO-10-134 Defense Civilian Intelligence Personnel 
Appendix I: The National Intelligence Civilian 

Compensation Program 

organizations from other federal agencies and departments—including the 

Central Intelligence Agency, the Department of Homeland Security, the 

Federal Bureau of Investigation, and the Office of the Director of National 

Intelligence, which currently have pay-setting authorities. For example, 

the Central Intelligence Agency is currently using its statutory authority to 

implement a pay-for-performance system and has, to date, created a Pay 

Modernization Office, and developed a project plan, implementation 

schedule, and pay modernization Web site. According to officials in the 

Office of the Director of National Intelligence, other federal agencies or 

departments that do not currently have the same statutory authorities 

include offices within Departments of Energy, State, Treasury, and the 

Drug Enforcement Administration. 

As reported by ODNI, the Intelligence Community agreed upon the several 

“enabling” directives that actually constitute NICCP.2

 Specifically, the 

essence of the NICCP framework has been captured in a suite of five 

enabling directives. They include the following: 

• Intelligence Community Directive 650—National Intelligence 

Civilian Compensation Program: Guiding Principles and Framework 

(Effective April 28, 2008). 

• Intelligence Community Directive 651—Performance Management 

System Requirements for the Intelligence Community Civilian 

Workforce (Effective November 28, 2007 and Updated Nov. 21, 

2008). 

• Intelligence Community Directive 652—Occupational Structure for 

the IC Civilian Workforce, (Effective April 28, 2008). 

• Intelligence Community Directive 653––Pay-Setting and 

Administration Policies for the IC Civilian Workforce (Effective May 

14, 2008)) 

• Intelligence Community Directive 654 –Performance-Based Pay for 

the IC Civilian Workforce (Effective April 28, 2008.) 

 

2

ODNI, Fiscal Year 2008 Annual Report on Intelligence Community Pay Modernization 

(Unclassified). 

Page 39 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix II: Merit System Principles Appendix II: Merit System Principles 

While our review focused on two merit principles that relate directly to 

performance management, 5 U.S.C. §§ 2301(b)2 and (b)(8A), the following 

provides the entire list of merit principles found in section 2301:

Section 2301 of title 5 of the U.S. Code applies to executive agencies and 

requires federal personnel management to be implemented consistent with 

the following merit system principles.1

1. Recruitment should be from qualified individuals from 

appropriate sources in an endeavor to achieve a work force from 

all segments of society, and selection and advancement should be 

determined solely on the basis of relative ability, knowledge and 

skills, after fair and open competition which assures that all 

receive equal opportunity. 

2. All employees and applicants for employment should receive fair 

and equitable treatment in all aspects of personnel management 

without regard to political affiliation, race, color, religion, 

national origin, sex, marital status, age, or handicapping 

condition, and with proper regard for their privacy and 

constitutional rights. 

3. Equal pay should be provided for work of equal value, with 

appropriate consideration of both national and local rates paid by 

employers in the private sector, and appropriate incentives and 

recognition should be provided for excellence in performance. 

4. All employees should maintain high standards of integrity, 

conduct, and concern for the public interest. 

5. The Federal work force should be used efficiently and effectively. 

6. Employees should be retained on the basis of adequacy of their 

performance, inadequate performance should be corrected, and 

employees should be separated who cannot or will not improve 

their performance to meet required standards. 

7. Employees should be provided effective education and training in 

cases in which such education and training would result in better 

organizational and individual performance. 

8. Employees should be— 

(A) protected against arbitrary action, personal favoritism, or 

coercion for partisan political purposes, and 

(B) prohibited from using their official authority or influence for 

the purpose of interfering with or affecting the result of an 

election or a nomination for election. 

 

1

5 U.S.C. § 2301(b) (2009). 

Page 40 GAO-10-134 Defense Civilian Intelligence Personnel 
Appendix II: Merit System Principles 

9. Employees should be protected against reprisal for the lawful 

disclosure of information which the employees reasonably 

believe evidences— 

(A) a violation of any law, rule, or regulation, or 

(B) mismanagement, a gross waste of funds, an abuse of 

authority, or a substantial and specific danger to public health or 

safety. 

Page 41 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix III: Scope and Methodology 

Page 42 GAO-10-134 

Appendix III: Scope and Methodology 

In conducting our review of the Defense Civilian Intelligence Personnel 

System (DCIPS), we limited our scope to the performance management 

aspect of DCIPS. We did not address either the performance management 

of the Senior Executive Service at the Department of Defense (DOD) or 

other aspects of DCIPS, such as classification and pay. 

Extent to which DOD 

Incorporated Internal 

Safeguards into DCIPS 

To determine the extent to which DOD has incorporated internal 

safeguards and accountability mechanisms into DCIPS, we used the 

following internal safeguards and accountability mechanisms, which were 

derived from our previous work on pay-for-performance management 

systems in the federal government: 

• Assure that the agency’s performance management system links 

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

and desired outcomes; 

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

individual pay to performance, and provide an equitable method for 

appraising and compensating employees; 

• Provide adequate training and retraining for supervisors, managers, 

and employees in the implementation and operation of the 

performance management system; 

• Institute a process for ensuring ongoing performance feedback and 

dialogue between supervisors, managers, and employees 

throughout the appraisal period and setting timetables for review; 

• Assure that the agency’s performance management system results 

in meaningful distinctions in individual employee performance; 1

 

• Provide a means for ensuring that adequate agency resources are 

allocated for the design, implementation, and administration of the 

performance management system; 

• Assure that there is an independent and credible employee appeals 

mechanism; 

• Assure that there are reasonable transparency and appropriate 

accountability mechanisms in connection with the results of the 

performance management process, including periodic reports on 

internal assessments and employee survey results relating to 

performance management and individual pay decisions while 

protecting individual confidentiality; 

 

1

This safeguard also accounts for an internal grievance process to address employee 

complaints, such as the reconsideration of ratings. 

 Defense Civilian Intelligence Personnel 
Appendix III: Scope and Methodology 

• Involve employees in the design of the system, to include employees 

directly involved in validating any related implementation of the 

system; and 

• Adhere to the merit principles set forth in section 2301 of title 5 of 

the U.S. Code. (Two of these merit principles, which relate directly 

to performance management—((b)2 and (b)(8A)—for example, 

identify (1) fair and equal treatment, regardless of factors such as 

political affiliation, race, color, sex, age, or handicapping condition 

and (2) protection against arbitrary action, personal favoritism, and 

coercion for partisan political purposes, as necessary, in all aspects 

of personnel management. The merit principles are listed in their 

entirety in appendix II.) 

To assess the implementation of these safeguards and accountability 

mechanisms, we obtained, reviewed, and analyzed DOD guidance and 

other regulations provided by officials in the Office of the Director of 

National Intelligence, the Office of the Under Secretary of Defense for 

Intelligence, and the intelligence components in DOD. Specifically, we 

reviewed and analyzed key documents such as DCIPS guidance and 

policies, along with Office of Personnel Management guidance on 

performance management systems. We also reviewed available DCIPS 

training materials, including self-paced online trainings on the DCIPS Web 

site: http://dcips.dtic.mil/index.html, attended the DCIPS Data 

Administrator Training Course, and reviewed and analyzed DVDs of town 

hall meetings recorded by the Office of Naval Intelligence. Because DCIPS 

was in early implementation, we continuously reviewed the DCIPS Web 

sites including the Under Secretary of Defense for Intelligence’s main Web 

site for updates on training materials and policies. Finally, we obtained 

relevant documentation and interviewed key Intelligence Community and 

DOD officials from the following organizations:2

• The Associate Director of National Intelligence for Human Capital and 

Intelligence Community Chief Human Capital Officer, Office of the 

Director of National Intelligence; 

• The Under Secretary of Defense for Intelligence; 

• Under Secretary of Defense for Intelligence, Human Capital 

Management Office; 

• Under Secretary of Defense for Intelligence, Chief of Staff 

Directorate; 

 

2

DOD organizations are located in the Washington, D.C., metropolitan area unless 

otherwise indicated. 

Page 43 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix III: Scope and Methodology 

• Defense Agencies: 

• Defense Intelligence Agency, Directorate for Human Capital, Office 

for Performance Management; 

• National Geospatial-Intelligence Agency, DCIPS Program 

Management Office; 

• National Reconnaissance Office, Office of Human Resources; 

• National Security Agency, Human Resource Strategies; 

• Military Services: 

• Department of the Army, Intelligence Personnel Management 

Office; 

• Department of the Navy, Civilian Personnel Programs; 

• Office of Naval Intelligence, Civilian Intelligence Personnel 

Office; 

• Headquarters, U.S. Marine Corps, Intelligence Department, 

Intelligence Support; 

• Department of the Air Force, DCIPS Program Office; 

• Defense Security Service, Office of Human Resources. 

Extent to which DOD has 

Mechanisms to Identify 

Employee Perceptions 

about DCIPS 

To determine the extent that DOD had developed mechanisms to identify 

and address employee perceptions about DCIPS, we evaluated two 

primary sources of information. First, we reviewed the results of existing 

mechanisms DOD is using to address employee perceptions—which 

included climate surveys for the Intelligence Community, town hall 

meetings, along with information from the USD(I)’s Web site. Second, we 

conducted small group discussions with civilian intelligence personnel 

within the department who were converting to DCIPS and administered a 

short questionnaire to these participants to collect information on their 

background, tenure with the federal service and DOD, and attitudes 

toward DCIPS. 

We conducted 26 discussion groups with defense civilian intelligence 

employees and supervisors from 7 of the 10 defense intelligence 

components converting to DCIPS.3

 For the purposes of our discussion 

groups, we omitted defense civilian intelligence personnel from the Army, 

Air Force, and the Defense Security Service because at the time of our 

review, these components had not attained the same level of 

implementation as the other defense intelligence components. 

Discussion Groups 

 

3

Discussion groups were conducted with employees and supervisors from the Defense 

Intelligence Agency, National Geospatial-Intelligence Agency, National Reconnaissance 

Office, National Security Agency, Navy, Marine Corps, and the office of the Under 

Secretary of Defense for Intelligence. 

Page 44 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix III: Scope and Methodology 

Additionally, for the defense intelligence components we did conduct 

discussion groups with, we also conducted discussion groups with 6 of 7 

defense intelligence components that had a field location. 

Our overall objective in using the discussion group approach was to obtain 

insight into employee and supervisor perceptions about DCIPS and its 

implementation thus far. Discussion groups, which are similar in nature 

and intent to focus groups, involve structured small group discussions that 

are designed to obtain in-depth information about specific issues. The 

information obtained is such that it cannot easily be obtained from a set of 

individual interviews. From each location, we requested that each defense 

intelligence component draw a systematic sample from its list of personnel 

in order to obtain a sample of 8 to 12 employees and 8 to 12 supervisors to 

participate. At the majority of the discussion groups, we reached our goal 

of meeting with 8 to 12 employees and supervisors in each discussion 

group; however, since participation was not compulsory and at some 

locations populations of employees to draw this random sample from 

were small, in a few instances we did not reach the recommended 8 

participants in the group. Discussions were held in a semi-structured 

manner, led by a moderator who followed a standardized list of questions. 

The discussions were documented by one or two other analysts at each 

location. For field sites, we selected components that had a concentration 

of more than 25 employees. 

In conducting our discussion groups, our intent was to achieve 

saturation—the point at which we were no longer hearing new 

information. As noted, we conducted 26 discussion groups with employees 

and supervisors of DOD civilian intelligence personnel at the 13 DOD sites 

we visited. Our design allowed us to identify themes, if any, in perceptions 

held by employees and supervisors. Discussion groups were conducted 

between April 2009 and May 2009. 

Scope of Our Discussion 

Groups 

A discussion guide was developed to facilitate the discussion group 

moderator in leading the discussions. The guide helped the moderator 

address several topics related to employees’ and supervisors’ perceptions 

of the performance management system, including their overall perception 

of DCIPS and the rating process, the training they received on DCIPS, the 

communication they have with their supervisor, positive aspects of DCIPS, 

and any changes they would make to DCIPS, among others. Each 

discussion group began with the moderator greeting the participants, 

describing the purpose of the study, and explaining the procedures for the 

discussion group. Participants were assured that all of their comments 

would be discussed in the aggregate or as part of larger themes that 

Methodology of Our Discussion 

Groups 

Page 45 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix III: Scope and Methodology 

emerged. The moderator asked participants open-ended questions related 

to DCIPS. All discussion groups were moderated by a GAO analyst, while 

at least one other GAO analyst observed the discussion group and took 

notes. After each discussion group, the moderator and note taker reviewed 

the notes from the session to ensure that the nature of the comments was 

captured accurately. 

We performed content analysis of our discussion group sessions in order 

to identify the themes that emerged during the sessions and to summarize 

participant perceptions of DCIPS. Specifically, at the conclusion of all our 

discussion group sessions, we reviewed responses from each of the 

discussion groups and created a list of themes. We then reviewed the 

comments from each of the 26 discussion groups and assigned comments 

to the appropriate themes, which were agreed upon by three analysts. The 

responses were used in our evaluation and discussion of how civilian 

employees perceive DCIPS. 

Content Analysis 

Discussion groups are not designed to (1) demonstrate the extent of a 

problem or to generalize the results to a larger population, (2) develop a 

consensus to arrive at an agreed-upon plan or make decisions about what 

actions to take, or (3) provide statistically representative samples or 

reliable quantitative estimates. Instead, discussion groups are intended to 

provide in-depth information about participants’ reasons for holding 

certain attitudes about specific topics and to offer insights into the range 

of concerns about and support for an issue. Specifically, the projectability 

of the information obtained during our discussion groups is limited for 

three reasons. First, the information gathered during our discussion 

groups on DCIPS represents the responses of only the employees and 

supervisors present in our 26 discussion groups. The experiences of other 

employees and supervisors under DCIPS who did not participate in our 

discussion groups may have varied. Second, while the composition of our 

discussion groups was designed to ensure a random sample of employees 

and supervisors under DCIPS, our sampling did not take into account any 

other demographic or job-specific information. Third, our discussion 

group samples are not generalizable to all component locations.

Limitations 

We administered a questionnaire to discussion group participants during 

the discussion group session to obtain further information on their 

backgrounds and perceptions of DCIPS. The questionnaire was 

administered and received from 238 participants of our discussion groups. 

The purpose of our questionnaire was to (1) collect demographic data 

from participants for the purpose of reporting with whom we spoke (see 

table 1), and (2) collect information from participants that could not easily 

Use of a Questionnaire to 

Supplement Discussion Group 

Findings 

Page 46 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix III: Scope and Methodology 

be obtained through discussion, e.g., information participants may have 

been uncomfortable sharing in a group setting. Specifically, the 

questionnaire included questions designed to obtain employees’ 

perceptions of DCIPS as compared with their previous personnel system, 

the accuracy with which they felt their ratings would reflect their 

performance, and management’s methods for conveying individual and 

group rating information. Since the questionnaire was used to collect 

supplemental information and was administered solely to the participants 

of our discussion groups, the results represent the opinions of only those 

employees who participated in our discussion groups. Therefore, the 

results of our questionnaire cannot be generalized across the population of 

DOD civilian intelligence personnel. 

Table 1: Composition of Discussion Groups by Demographic Category per Component. 

Agency 

NonSupervisory 

Employees Supervisors Male Female 

No answer 

(sex)

American 

Indian/

Alaskan 

Native Asian

Black/

AfricanAmerican

Native 

Hawaiian 

or other 

Pacific 

Islander

Hispanic 

/ Latino White 

Indicated 

More 

than One 

Race Other

No 

Answer 

(Race)

Defense 

Intelligence 

Agency 

4 7 7 4 2 8 1

 field location 12 12 15 8 1 3 20 1

National 

GeospatialIntelligence 

Agency 

11 15 18 8 1 6 18 1

 field location 11 10 12 9 1 20 

National 

Security Agency 

6 9 5 10 1 13 1

 field location 5 6 6 5 1 1 7 1 1

National 

Reconnaissance 

Office 

10 7 10 7 1 15 1

 field location 5 7 9 3 1 10 1

Under Secretary 

of Defense for 

Intelligence 

9 4 6 7 1 2 10 

Navy 16 14 19 11 1 4 23 1 1

Office of Naval 

Intelligence 

(field location) 

7 10 13 4 3 13 1

Marine Corps 10 10 14 6 16 1 2

Page 47 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix III: Scope and Methodology 

Agency 

NonSupervisory 

Employees Supervisors Male Female 

No answer 

(sex)

American 

Indian/

Alaskan 

Native Asian

Black/

AfricanAmerican

Native 

Hawaiian 

or other 

Pacific 

Islander

Hispanic 

/ Latino White 

Indicated 

More 

than One 

Race Other

No 

Answer 

(Race)

Marine Corps 

Intelligence 

Activity 

(field location) 

12 9 14 7 19 2

Total 118 120 148 89 1 0 3 24 0 2 192 9 1 6

Source: GAO analysis. 

Note: Participants voluntarily self-reported demographic information in our questionnaire; some 

participants did not provide responses for all demographic questions. In addition, participants could 

select more than one response category for the ethnic and racial questions. 

We conducted our review from November 2008 to November 2009 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives.

Page 48 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix IV: Defense Civilian Intelligence 

Personnel System Compared to the National 

Geospatial-Intelligence Agency System 

The Defense Civilian Intelligence Personnel System (DCIPS) is largely 

based on the National Geospatial-Intelligence Agency’s Total Pay 

Compensation pay-for-performance system. The National GeospatialIntelligence Agency’s system was in existence for about 10 years (1999-

2009). Table 2 provides a comparison of the two systems. 

Table 2. DCIPS and Total Pay Compensation Comparison. 

Comparison 

Department of Defense National Geospatial-Intelligence Agency

DCIPS Total Pay Compensation 

Authorities Pub. L. No. 104-201 §§1631-1632 (1996), as 

amended by Pub. L. No. 106-398, § 1141 (2000) 

(codified at 10 U.S.C. §§1601-1614). 

Same 

Performance Management 

Rating Cycle Fiscal Year Same 

Rating Elements (WHAT) Generally Three to Six Performance Objectives aN/A - no specific objectives designed 

(HOW) Six Performance Elements b 

Accountability for Results 

Communication 

Critical Thinking 

Engagement and Collaboration 

Personal Leadership and Integrity 

Technical Expertise 

3 - 10 Critical Elements recommended (similar). 

Examples include: 

Accountability 

Leading People 

Interpersonal Relationship Development and 

Networking 

Rating Scale Assigns 1-5 for each objective and each element

5 = Outstanding 

4 = Excellent 

3 = Successful 

2 = Minimally Successful 

1 = Unacceptable 

500 point scale with weighting applied to five rating 

levels 

5 = Superior 

4 = Excellent 

3 = Successful 

2 = Marginal 

1 = Unsatisfactory 

Employee Rating Established by Rater and approved by 

Reviewer(s) c

Same 

Occupational Structure Component-specific job titles (with cross-walk to 

OPM job titles/categories) aligned to common 

work categories/levels 

Work roles and occupations crosswalk to OPM job 

titles/categories. 

Pay Structure One common pay band structure for all 

occupations aligned to common work 

categories/levels d

One common pay band structure for all 

occupations 

Pay Administration 

Pay Pool Process Annual consideration for base pay and bonuses Same 

Payout Decisions Employee payout in early January Same 

Appendix IV: Defense Civilian Intelligence 

Personnel System Compared to the National 

Geospatial-Intelligence Agency System 

Page 49 GAO-10-134 Defense Civilian Intelligence Personnel 
Appendix IV: Defense Civilian Intelligence 

Personnel System Compared to the National 

Geospatial-Intelligence Agency System 

Comparison 

Department of Defense National Geospatial-Intelligence Agency

DCIPS Total Pay Compensation 

Final Ratings will be inserted into Compensation 

Work Bench—a software tool which utilizes an 

algorithm to determine salary increases and 

bonus awards.e Any changes to pay increases 

based on the algorithm, per DCIPS guidance, 

must be documented, justified, and approved by 

the PRA (see below) f

 

Final ratings are inserted into a Total Performance 

Compensation spreadsheet—software tool which 

utilizes an algorithm to determine salary increases 

and bonuses. Any changes to salary increases 

and bonuses, per guidance, must be documented, 

justified, and approved by boards, office level 

directors, and Agency review authority. 

Pay Pool Performance Review 

Authority (PRA) 

A Pay Pool PRA oversees one or more pay 

pools, and conducts a summary review of all 

salary decisions to assess conformance to 

policy guidance and equity across pay pools. 

The Pay Pool PRA approves the final pay pool 

decisions. 

PRA function is incorporated into higher level 

Source: GAO analysis. 

a Employees in consultation with their supervisors, design three to six objectives that link their job to 

the agency mission as noted in Figure 5. These objectives are to be specific, measurable, 

achievable, relevant, and time limited (SMART). 

b

 Supervisors will be evaluated on Accountability for Results, Communication, Critical Thinking, 

Engagement and Collaboration, Leadership, and Management Proficiency.

c

A Performance Review Authority reviews the ratings from multiple reviewing officials. Under DCIPS, 

this Performance Management Performance Review Authority is separate from the Pay Pool 

Performance Review Authority. 

d

 DCIPS work levels include: Entry/Developmental, Full Performance, Senior, and Expert. Except for 

Entry/Developmental, these other work levels include positions that may be defined as 

supervisors/managers. 

e Per ODNI, NICCP uses a standard mathematical formula that applies, among other things, the 

following factors: an individual employee’s performance rating; the overall performance ratings 

distribution in the pay pool; the employee’s current base salary; the total payroll for all employee in 

the pay pool; and the overall pay pool budget for performance pay increases. 

f

Department of Defense Instruction 1400.25-V2012, DOD Civilian Personnel Management System: 

Defense Civilian Intelligence Personnel System (DCIPS) Performance-Based Compensation 

(September 15, 2009).

Page 50 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix V: Training Curriculum 

The Under Secretary of Defense for Intelligence has designed several 

training courses as part of a curriculum for the Defense Civilian 

Intelligence Personnel System (DCIPS). This curriculum covers various 

aspects of DCIPS. Table 3 illustrates the range of training courses 

provided to Intelligence Community employees. 

Table 3: Selected DCIPS Training Curriculum 

Training Category Course Audience Duration 

Delivery 

Method Summary 

Transition to DCIPS Communication 

Matters: 

Succeeding 

Under DCIPS 

Managers/Supervisors 

and Employees 

1.5 hour Web-based This is a self-paced, interactive, Webbased course designed to provide an 

overview of DCIPS and offer ways for 

employees, managers, and supervisors to 

prepare for the transition. 

DCIPS 101 Employees 1.5 hour Web-based This is a self-paced, Web-based course 

about core DCIPS elements. This course 

serves as a recommended prerequisite 

for the classroom sessions. 

Core Elements of 

DCIPS 

Managers/Supervisors 

and Employees 

1⁄2 day Classroom Participants will review how core 

elements of human resource 

management are changing with the 

policies associated with DCIPS. 

Overview 

HR Elements for 

HR Practitioners 

Human Resource 

Practitioners 

3 days Classroom Participants will review the detailed 

guidance that HR Practitioners need to 

operate under the new aspects of DCIPS.

Understanding 

Performance 

Management 

Employees 1 day Classroom Participants will learn about how to work 

in a performance-based organization; 

how to develop performance based 

objectives; and how their performance will 

be rated under DCIPS. 

Managing 

Performance 

Managers/Supervisors 2 days Classroom Participants will learn about how 

performance management works under 

DCIPS, including how to plan and drive 

performance throughout the year, write 

accomplishments, rate performance, 

represent employees, etc. 

Performance 

Management 

Driving 

Performance 

Through Dialogue 

Managers/Supervisors 

and Employees 

5 hours Classroom Participants will learn how to prepare for 

and engage in performance 

conversations required under DCIPS’ 

performance management process. This 

course can be taught to separate groups 

of manager/supervisors or employees as 

a mixed audience. 

Performance 

Objectives 

SMART 

Performance 

Objectives 

Managers/Supervisors 

and Employees 

2.5 hours Classroom Participants will learn more about how to 

write SMART Objectives. This course can 

be taught to separate groups of 

manager/supervisors or employees as a 

mixed audience. 

Appendix V: Training Curriculum 

Page 51 GAO-10-134 Defense Civilian Intelligence Personnel 
Appendix V: Training Curriculum 

Training Category Course Audience Duration 

Delivery 

Method Summary 

DCIPS iSuccess All employees 1.5 hours Web-based Self-paced course that guides employees 

through the writing process using a stepby-step approach. 

DCIPS Pay 

Pools, 

Performance, and 

You 

All employees 1.5 hours Web-based Self-paced, interactive, Web-based 

course that explains how performance 

management and pay pool process are 

designed to ensure that employees are 

appropriately recognized and rewarded 

for their contributions to achieving 

organizational goals. 

DCIPS Pay Pools 

Advisor Guide 

Pay Pool Advisors N/A Print Working guide for pay pool advisors to 

use during mock and real pay pools. 

Topics include key players and their 

responsibilities, getting started, what to 

look out for, and keeping the pay pool on 

track. 

Preparing Your 

Organization for 

Pay Pools 

Rating Officials and 

Reviewing Officials 

1⁄2 day Classroom Participants will review the pay pool 

process, including how to achieve 

appropriate and fair performance-based 

ratings, review ratings for consistency 

across the pay pool and organization, and 

communicate salary increase and bonus 

information to employees. 

Pay Pool 

Pay Pools in 

Action 

Pay Pool Managers, 

Panel Members, Pay 

Pool Performance 

Review Authorities 

(PRAs), and Pay Pool 

Advisors 

1 day Classroom Participants will have an opportunity to 

practice conducting pay pool decisions 

about performance-based salary 

increases and bonuses and addresses 

steps that can be take to ensure fairness 

and consistency during the payout 

process. 

Compensation DCIPS 

Compensation 

Fundamentals 

Human capital 

practitioners, 

budget/financial 

specialists/analysts, 

compensation 

specialists/analysts, 

and other 

employees/managers 

who are involved in 

compensation issues 

on a regular basis 

1 day Classroom Participants will review the pay elements 

under DCIPS and flexibilities that can be 

used to ensure the long-term 

effectiveness of DCIPS; discuss paysetting rules based on where the new hire 

is coming from; and review the six factors 

to consider when setting pay. 

Source: DOD.

Page 52 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix VI: Defense Civilian Intelligence 

Personnel System Comparison with the 

National Security Personnel System 

In addition to the Defense Civilian Intelligence Personnel System (DCIPS), 

DOD has also been implementing a pay-for-performance system for 

civilian employees who were not in the Intelligence Community—the 

National Security Personnel System. Table 4 provides a comparison of the 

two systems. 

Table 4. DCIPS and the National Security Personnel System Comparison 

DCIPS and the National Security Personnel System: A Comparison 

DCIPS National Security Personnel System 

Authorities Pub. L. No. 104-201 §§1631-1632 (1996), as 

amended by Pub. L. No. 106-398, § 1141 

(2000) (codified at 10 U.S.C. §§1601-1614). 

Pub. L. No. 108-136, § 1101 (2003), as 

amended by Pub. L. No. 110-181, § 

1106 (2008) (codified at 5 U.S.C. §§ 

9901-9904). 

Performance Management 

Rating Cycle Fiscal Year Same 

Rating Elements (WHAT) Generally Three to Six Performance 

Objectives a

Generally Three to Five Performance 

Objectives 

(HOW) Six Performance Elements b 

Accountability for Results 

Communication 

Critical Thinking 

Engagement and Collaboration 

Personal Leadership and Integrity 

Technical Expertise 

 Seven Contributing Factors 

Communication 

Cooperation and Teamwork 

Critical Thinking 

Customer Focus 

Leadership 

Resource Management 

Technical Proficiency 

Rating Scale Assigns 1-5 for each objective and each 

element 

5 = Outstanding 

4 = Excellent 

3 = Successful 

2 = Minimally Successful 

1 = Unacceptable 

Assigns 1-5 for each objective, but +/- 

for contributing factors 

5 = Role Model 

4 = Exceeds Expectations 

3 = Valued Performer 

2 = Fair 

1 = Unacceptable 

Employee Rating Established by Rater and approved by 

Reviewer(s) before the pay pool process.c

 

Established by the Pay Pool. Pay Pools 

are responsible for reviewing ratings of 

record, share allocations, and payout 

distribution. 

Occupational Structure Component-specific job titles (with cross-walk 

to OPM job titles/categories) aligned to 

common work categories/levels 

Job titles aligned to four occupationallybased career groups. 

Pay Structure One common pay band structure for all 

occupations aligned to common work 

categories/levels d

 

4 career groups g

 comprised of 15 pay 

schedules and 44 pay bands. 

Pay Administration 

Payout Decisions Employee payout in early January Employee payout in early January 

Appendix VI: Defense Civilian Intelligence 

Personnel System Comparison with the 

National Security Personnel System 

Page 53 GAO-10-134 Defense Civilian Intelligence Personnel 
Appendix VI: Defense Civilian Intelligence 

Personnel System Comparison with the 

National Security Personnel System 

DCIPS and the National Security Personnel System: A Comparison 

DCIPS National Security Personnel System 

Final Ratings will be inserted into 

Compensation Work Bench—a software tool 

which utilizes an algorithm to determine salary 

increases and bonus awards.e Any changes to 

pay increases based on the algorithm must be 

documented, justified, and approved by the 

PRA (see below) f

 

Also uses a Compensation Work Bench, 

however employees are assigned a 

number of shares based on their 

performance rating; the value of one 

share is determined by the overall 

number of shares awarded. 

Pay Pool Performance Review Authority 

(PRA) 

A Pay Pool PRA oversees one or more pay 

pools, and conducts a summary review of all 

salary decisions to identify potential issues 

with regard to merit, consistency, or unlawful 

discrimination among the pay pools under its 

authority. The Pay Pool PRA approves the 

final pay pool decisions. 

Provides oversight of several pay pools, 

and addresses the consistency of 

performance management policies 

within a component, major command, 

field activity, or other organization as 

determined by the component. 

Source: GAO analysis. 

a Employees in consultation with their supervisors, design three to six objectives that link their job to 

the agency mission as noted in Figure 5. These objectives are to be specific, measurable, 

achievable, relevant, and time limited (SMART). 

b

 Supervisors will be evaluated on Accountability for Results, Communication, Critical Thinking, 

Engagement and Collaboration, Leadership, and Management Proficiency.

c

A Performance Review Authority reviews the ratings from multiple reviewing officials. Under DCIPS, 

this Performance Management Performance Review Authority is separate from the Pay Pool 

Performance Review Authority. 

d

 DCIPS work levels include: Entry/Developmental, Full Performance, Senior, and Expert. Except for 

Entry/Developmental, these other work levels include positions that may be defined as 

supervisors/managers. 

e Per ODNI, NICCP uses a standard mathematical formula that applies, among other things, the 

following factors: an individual employee’s performance rating; the overall performance ratings 

distribution in the pay pool; the individual employee’s current base salary; the total payroll for all 

employee in the pay pool; and the overall pay pool budget for performance pay increases. 

f

Department of Defense Instruction 1400.25-V2012, DOD Civilian Personnel Management 

System: Defense Civilian Intelligence Personnel System (DCIPS) Performance-Based 

Compensation (September 15, 2009). 

g

 The NSPS career groups include: Standard Career Group, Medical Career Group, Scientific and 

Engineering Career Group, and Investigative and Protective Services Career Group. 

Page 54 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix VII: Comments from the Appendix VII: Comments from the Department of Defense 

Department of Defense

Page 55 GAO-10-134 Defense Civilian Intelligence Personnel 
Appendix VII: Comments from the 

Department of Defense 

Page 56 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix VII: Comments from the 

Department of Defense 

Page 57 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix VII: Comments from the 

Department of Defense 

Page 58 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix VIII: Comments from the Office of Appendix VIII: Comments from the Office of the Director of National Intelligence 

the Director of National Intelligence 

OFFICE OF THE DIRECTOR OF NATIONAL INTELLIGENCE

WASHINGTON, DC 20511

Ms. Brenda S. Farrell

Director, Defense Capabilities

and Management

United States Government

Accountability Office

Washington, DC 20548

(U) This responds to the November 12,2009 request for review of a draft report

entitled "DOD Civilian Personnel: Intelligence Personnel System Incorporates

Safeguards, but Opportunities Exist for Improvement," GAO-I 0-134.

(U) We appreciate the opportunity to comment on the draft report given the

central role the ODNI played in recent development of Defense Civilian Intelligence

Personnel System (DCIPS) and the National Intelligence Civilian Compensation Program

(NICCP), and the importance of those companion efforts to the Intelligence Community's

overall transformation. Please find attached our suggested edits to the body of the report

and our official comments for inclusion in the appendices.

(U) Overall, we believe the tenor of the report is fair and balanced, though the

Highlights are overly negative and should be modified to more accurately reflect the tone

and body of the report. In addition, we believe the report should also emphasize that

DCIPS and the NICCP are intended to meet the goals of the Intelligence Reform and

Terrorism Prevention Act of 2004. Thus, the ODNI and DoD are pursuing these efforts

as a means of integrating and unifying the Community under a single, common human

capital policy framework, where the IC's agencies and elements have historically

operated under as many as six separate statutory personnel systems. GAO has noted that

common human capital policies can act as a powerful tool in support of organizational

transformation, and no where is this more critical than in the Ie. We also believe the

report should emphasize that DCIPS was authorized by statute in 1997 and is separate

and distinct from the National Security Personnel System; the latter was authorized

several years later and has taken a much different path with respect to its design and

implementation.

(U) In 2001 GAO identified human capital as a "High Risk Area" across the

executive branch, and it has been a champion of civil service reform ever since. We

applaud your efforts in that regard and believe that NICCP/DCIPS is consistent with the

spirit and intent of GAO's views. We also appreciate your comprehensive review and

Page 59 GAO-10-134 Defense Civilian Intelligence Personnel 
Appendix VIII: Comments from the Office of 

the Director of National Intelligence 

thoughtful recommendations; we take them seriously and will work with DoD to

implement them insofar as possible.

(D) If you have any questions regarding this matter, please do not hesitate to

contact me at (703) 275-2473.

7(tJ;O-~~

Kathleen Turner

Director of Legislative Affairs

Page 60 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix VIII: Comments from the Office of 

the Director of National Intelligence 

Comments of the Intelligence Community Chief Human Capital Officer

on the GAO DRAFT Report:

DOD Civilian Personnel:

Intelligence Personnel System Incorporates Safeguards,

but Opportunities Exist for Improvement

ODNI appreciates the opportunity to comment on this GAO report. While the

overall tenor of the report is fair and balanced, we do feel obligated to make a

couple of important points. The design of DCIPS complies with all IC Directives,

which were developed after an extensive period of collaboration among IC agencies

and elements. The policy design represents a serious consideration of lessons

learned from best practices found in existing successful alternative pay systems

(with particular attention paid to NGA). Furthermore, the IC did gather input (in

2006) from hundreds of IC employees during the policy development and program

design phases. It has always been our intention to continue soliciting additional

employee suggestions for process improvement at the conclusion of each annual

performance and pay cycle.

IC Directive 650 clearly lays out ten guiding principles which very closely align to

the ten criteria chosen by GAO for their review. We agree that employees must be

informed and educated on the details of the IC-wide program, as well as their

department or agency's compensation and performance management systems.

They are to be given the opportunity to provide feedback on the content of those

systems and their implementation, and their feedback must be considered when

those systems are developed, implemented, and administered. During the design

and implementation phases of our change initiative, we made several changes based

on employee feedback. For example, we decided to pass through to all employees

the full general pay increase (unadjusted by performance results). We also modified

our implementation schedules whenever the agencies or elements didn't feel their

workforce was properly prepared to convert to DCIPS.

Change is often difficult for employees to accept, and there will always be some who

are uncomfortable with the rate of change. But we believe this is more a reflection

of where DCIPS is in its implementation schedule then any material defect in the

design. The feedback that will be the most valuable will only come after we have

been allowed to run all the way through a pay-for-performance cycle so we can

evaluate the results.

Regarding safeguards, our ICDs clearly affirm the need for employee protections.

We must provide rigorous oversight of the administration of IC compensation and

performance management systems, including review mechanisms to guard against

unlawful discrimination and partisan pressures, and other non-merit factors such as

cronyism and favoritism. We must also ensure transparency of merit-based pay

Page 61 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix VIII: Comments from the Office of 

the Director of National Intelligence 

and performance decisions for employees. We acknowledge that DCIPS can and

must be improved, and agree to work with USD(I) in an expeditious manner to

address the areas you have identified. However, we strongly believe that DCIPS has

been established on a strong foundation of policy directives and incorporates many

best practices in its processes. We think DCIPS is off to a very solid start and will

only get better.

Page 62 GAO-10-134 Defense Civilian Intelligence Personnel
Appendix IX: 

A

GAO Contact and Staff 

cknowledgments 

Page 63 GAO-10-134 

Appendix IX: GAO Contact and Staff 

Acknowledgments 

Brenda S. Farrell, (202) 512-3604, or farrellb@gao.gov. GAO Contact 

In addition to the contact named above, Marion Gatling (Assistant 

Director), Beth Bowditch, Margaret Braley, Ryan D’Amore, Nicole Harms, 

Cynthia Heckman, Mae Jones, James P. Krustapentus, Lonnie McAllister, 

II, Spencer Tacktill, Carolyn Taylor, John Van Shaik, José Watkins, and 

Greg Wilmoth made key contributions to this report. 

Acknowledgments 

 Defense Civilian Intelligence Personnel 
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(351297) Page 65 GAO-10-134 Defense Civilian Intelligence Personnel
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