Consumer Financial Protection Bureau: Additional Actions Needed to Support a Fair and Inclusive Workplace
Published: 2016-05-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Dodd-Frank Wall Street Reform and Consumer Protection Act created CFPB to regulate the provision of consumer financial products and services. In 2014, congressional hearings included testimony from CFPB employees about allegations of discrimination and retaliation, which raised concerns about CFPB's management practices and culture.
GAO was asked to review personnel management and organizational culture issues at CFPB. This report examines (1) CFPB employees' views on these issues and (2) CFPB's efforts to strengthen personnel management and culture, among other objectives.
GAO reviewed relevant CFPB reports, policies, procedures, and other documents; surveyed CFPB employees and executives (with 62 and 63 percent response rates, respectively) to gather their views on CFPB's personnel practices and organizational culture; spoke with CFPB employees who contacted GAO through its phone and email hotlines; interviewed CFPB officials; and reviewed reports and recommendations from the Office of the Inspector General for the Board of Governors of the Federal Reserve System and CFPB.
section_title: What GAO Found
paragraphs: Nonexecutive employees at the Consumer Financial Protection Bureau (CFPB) who responded to GAO's survey identified strengths and areas for improvement in CFPB's personnel practices and culture. Most respondents agreed that enthusiasm for CFPB's mission is high and that immediate supervisors respect and value differences among individuals. However, GAO's survey found heightened concerns related to fair treatment, trust that employees can raise concerns without fear of reprisal, confidence in complaint processes, and other matters. For survey items on these issues, more than 25 percent of respondents bureau-wide had unfavorable views, and dissatisfaction was above 35 percent in some CFPB offices and demographic groups. For example, about one-third of respondents disagreed with the statement that success at CFPB is based more on merit than on personal connections or favoritism. Disagreement was 40 percent or more for a few offices that focus on examining institutions and among black respondents.
As part of ongoing improvement efforts and in response to challenges it identified in late 2013 and early 2014, CFPB has worked to strengthen personnel management practices and enhance its diversity and inclusion efforts. In part to address weaknesses in personnel practices that may have contributed to perceptions of unfair treatment, CFPB has expanded management training, developed new guidance on personnel practices, and developed a new performance management system. CFPB has made progress in adopting leading diversity management practices identified in prior GAO work, such as finalizing a diversity strategic plan, creating employee diversity groups, and expanding diversity training. In addition, CFPB launched a new initiative to strengthen its organizational culture that includes obtaining employee input on ideas for improving CFPB's culture and addressing employee concerns. Finally, CFPB has strengthened its employee complaint processes by providing new training and guidance and creating feedback mechanisms to help evaluate progress in some areas.
CFPB has taken steps to measure and communicate progress on these efforts, such as through its process for analyzing feedback from employee surveys. However, without additional steps in these areas, CFPB may miss opportunities to help ensure sustained commitment and accountability for its initiatives.
CFPB's diversity, inclusion, fairness, and culture efforts represent a significant change management initiative, but CFPB does not comprehensively report on its implementation goals and progress across these efforts.
CFPB has created some feedback mechanisms to evaluate the effectiveness of its equal employment opportunity complaint process, but has not done the same for its employee grievance processes.
section_title: What GAO Recommends
paragraphs: GAO makes two recommendations to improve CFPB's personnel management efforts, including developing a strategy for reporting on progress and creating feedback tools on its grievance processes in coordination with its employee union. CFPB concurred with both recommendations.

section_title: Letter
paragraphs: The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd- Frank Act) created the Bureau of Consumer Financial Protection, also  known as the Consumer Financial Protection Bureau (CFPB), to regulate  the offering and provision of consumer financial products or services  under the federal consumer financial laws. The act consolidated many of  the consumer financial protection authorities previously shared by seven  federal agencies into one. It also provided CFPB additional authorities  related to supervising and enforcing federal consumer financial laws;  handling consumer complaints; promoting financial education; and  monitoring financial markets for risks to consumers. CFPB began  operations on July 21, 2011, and its first director was appointed on  January 4, 2012, and confirmed by the United States Senate on July 16,  2013.
In December 2013, CFPB identified disparities in employees’  performance ratings for fiscal year 2013 by race, age, and office location.  In January 2014, CFPB management shared these findings with the  CFPB employee union, and in March and May 2014, it shared reports  summarizing ratings distributions and plans to address disparities with all  employees. In March 2014, a press article reported on these ratings  disparities and other alleged personnel matters. The House Financial  Services Committee began an investigation into these matters and from  April 2014 through June 2015 its Subcommittee on Oversight and  Investigations held a series of hearings that included testimony by five  CFPB employees about allegations of discrimination and retaliation.  Seven other CFPB employees provided the committee with anonymous  written statements about their allegations of unfair treatment by CFPB  managers. On the basis of personal accounts these and other CFPB  employees shared with Congress, members of Congress raised  questions about the level of trust between CFPB’s management and  employees and the health of CFPB’s organizational culture.
You asked us to review personnel management and the organizational  culture at CFPB. In this report, we examine (1) CFPB’s early efforts as a  new agency to establish personnel practices and organizational culture  and challenges it encountered in promoting a diverse, inclusive, and fair  workplace; (2) employees’ views on personnel management and  organizational culture at CFPB; and (3) CFPB’s efforts to strengthen its  personnel management practices and organizational culture.
To describe CFPB’s early efforts as a new agency to establish personnel  practices and an organizational culture, we reviewed CFPB reports and  documents, and testimony and public statements by CFPB officials. We  obtained and analyzed CFPB workforce data for fiscal years 2011 to 2015  to describe the growth in CFPB’s workforce. We also reviewed data and  documentation related to CFPB’s initial efforts to identify and address  specific personnel challenges. For example, we reviewed a 2013 report  by a management consulting firm on CFPB’s diversity and inclusion  efforts and CFPB’s internal analysis of disparities in performance ratings  by race and other factors. In addition, to describe trends in the number  and basis of employee complaints, we obtained and analyzed CFPB data  for fiscal years 2011 to 2015 on Equal Employment Opportunity (EEO)  complaints and grievances. To describe employee perspectives on  challenges CFPB faced as a new agency, we reviewed the report by  CFPB’s Office of Minority and Women Inclusion (OMWI) on listening  sessions it held with employees from April through June 2014. We also  interviewed current and former CFPB officials who were employed at  CFPB in its first 2 years.
We obtained CFPB employees’ views on personnel management and  organizational culture through interviews with current and former  employees and two web-based surveys. To identify key issues and  concerns related to CFPB’s personnel management practices and  organizational culture and to inform survey development, we provided  opportunities for all CFPB employees to meet or communicate with us  individually in a confidential manner. We set up a GAO toll-free phone  number and e-mail address for CFPB employees to use to arrange a  meeting with our team or provide information. From August 2014 through  May 2015, we held one-on-one interviews with 120 nonsupervisory and  supervisory staff. We implemented two web-based surveys of all 1,389  nonexecutive employees and 57 executive employees as of January 31,  2015. The survey response rates were 62 percent and 63 percent,  respectively. For the nonexecutive survey, we carried out a statistical  nonresponse bias analysis using available administrative data and  determined that we could not assume the nonrespondents were missing  at random. We found that the propensity to respond was statistically  correlated with employee age and the CFPB division an employee  worked in. Furthermore, we observed that responses to questions on the  survey also correlated with employee age. For this reason, the results of  the staff survey are presented as tabulations from a census survey. We  do not make any attempt to extrapolate the findings to the 38 percent of  eligible staff who chose not to complete our survey. Survey results that  this report presents for CFPB employees who responded must not be  taken to be representative of the proportion of the total CFPB population  (or the total population of an office or demographic group) who would  have agreed or disagreed with a survey question. For more information  about the methodology for our surveys, see appendix I. We reviewed  CFPB’s annual employee survey results for fiscal years 2013, 2014, and  2015 to obtain additional perspectives from CFPB staff on the bureau’s  personnel management-related issues. In addition, we reviewed  documents and data from the Office of Personnel Management (OPM)  and the Merit Systems Protection Board (MSPB) to provide information  about the views of federal government employees on these issues. We  assessed the reliability of these survey data by reviewing documentation  of the methodology for these surveys and found these survey data to be  reliable for our purposes.
To evaluate CFPB’s efforts to develop and strengthen its personnel  management and organizational culture, we reviewed relevant CFPB  reports, policies, procedures, and other documents. We used criteria from  applicable federal regulations, leading practices for diversity and  managing organizational change identified in prior GAO reports, and GAO  standards for internal control. To assess CFPB’s efforts to improve  diversity and inclusion throughout the bureau, we reviewed the results of  external reviews of CFPB’s diversity and inclusion efforts conducted by  the Office of the Inspector General of the Board of Governors of the  Federal Reserve System and CFPB (Inspector General) and a  management consulting firm. We reviewed CFPB documentation and  interviewed CFPB officials about efforts to strengthen personnel  management and organizational culture, including the status of CFPB’s  implementation of recommendations made by its OMWI and the Inspector  General. To assess CFPB’s efforts to strengthen its processes for  addressing employee complaints, we reviewed policies, procedures, and  guidance related to EEO complaints and grievances. We also interviewed  CFPB officials from the offices responsible for these complaint processes.  For the parts of our work that involved the analysis of computer- processed data, we assessed the reliability of these data and found that  they were sufficiently reliable for our purposes. Data sets for which we  conducted data reliability assessments include CFPB data on its  workforce demographics and CFPB data on employee complaints. To  assess the reliability of these data, we reviewed relevant documentation  and conducted interviews with CFPB staff to review steps they took to  collect and ensure the reliability of the data. In addition, we electronically  tested data fields for missing values, outliers, and obvious errors. We  determined that these data were sufficiently reliable for our purposes.
We conducted this performance audit from September 2014 to May 2016  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.
subsections: section_title: Background
subsections: section_title: CFPB’s Mission, Organizational Structure, and Workforce Demographics
paragraphs: CFPB defines its mission as helping consumer finance markets work by  making rules more effective, by consistently and fairly enforcing those  rules, and by empowering consumers to take more control over their  economic lives.
CFPB’s strategic plan articulates four broad goals:
Prevent financial harm to consumers while promoting good practices  that benefit them.
Empower consumers to live better financial lives.
Inform the public, policy-makers, and CFPB’s own policy-making with  data-driven analysis of consumer finance markets and consumer  behavior.
Advance CFPB’s performance by maximizing resource productivity  and enhancing impact.
CFPB was established as an independent bureau within the Federal  Reserve System. According to CFPB data, CFPB had 646 employees as  of September 30, 2011, and by March 31, 2015, had grown to 1,437  employees. CFPB built its workforce by hiring employees with a range of  backgrounds, including the public, private, and nonprofit sectors, and the  military. Under an employee transfer process outlined in the Dodd-Frank  Act, CFPB hired more than 200 employees as transfers from six of the  federal agencies from which it assumed some regulatory and  enforcement responsibilities under the act.
To fulfill its mission, CFPB was organized into six divisions, each with  several offices (see fig. 1):
Supervision, Enforcement, and Fair Lending Division—Enforces  compliance with federal consumer financial laws by supervising  market participants and bringing enforcement actions.
Operations Division—Builds and sustains CFPB’s internal  infrastructure, such as technology and human capital; includes the  Office of Consumer Response, which addresses consumer  complaints and questions.
Research, Markets, and Regulations Division—Conducts research  to understand consumer financial markets issues, evaluates whether  there is a need for regulation, and analyzes the costs and benefits of  existing regulations.
Legal Division—Monitors and helps to ensure CFPB’s compliance  with all applicable laws and provides advice to CFPB’s director and  other divisions.
Consumer Education and Engagement Division—Provides  information to consumers of financial products and services to help  them make better-informed decisions.
External Affairs Division—Manages CFPB’s relationships with  external stakeholders; collects input from these stakeholders and  informs them on matters related to CFPB’s work.
The Supervision, Enforcement, and Fair Lending (SEFL) division is the  largest of CFPB’s divisions with 670 employees, as of March 2015 (see  fig. 2). The supervision function in this division is carried out by CFPB’s  Office of Supervision Examinations, which includes four component  regional offices (the Midwest Region, the Northeast Region, the  Southeast Region, and the West Region), and the Office of Supervision  Policy. Also located within this division, the Office of Enforcement and the  Office of Fair Lending and Equal Opportunity carry out responsibilities for  enforcing consumer financial laws and promoting fair access to credit,  respectively.
As of March 2015, according to CFPB data, about 69 percent of its non- Hispanic workforce had identified themselves as white, about 18 percent  had identified as black, and the remainder had identified as another race  or two or more races (see fig. 3). As of this date, CFPB data indicated  that 6 percent of its employees identified as Hispanic.
Figure 4 shows the breakdown of CFPB’s workforce by gender and age,  as of March 2015.
section_title: Organizational Culture and Diversity Leading Practices
paragraphs: Organizational culture is the underlying assumptions, beliefs, values,  attitudes, and expectations shared by an organization’s members that  affect their behavior and the behavior of the organization as a whole. We  have previously reported that organizations with more constructive  cultures generally perform better and are more effective. Within  constructive cultures, employees also exhibit a stronger commitment to  mission focus, accountability, coordination, and adaptability.
In recent years, organizations in both the private and public sectors have  strived to build diverse and inclusive workplaces, including an  organizational culture that values diversity and inclusion. In a January  2005 report, we defined diversity management as a process intended to  create and maintain a positive work environment that values individuals’  similarities and differences, so that all can reach their potential and  maximize their contributions to an organization’s strategic goals and  objectives. We also identified a set of nine leading diversity management  practices that should be considered when an organization is developing  and implementing diversity management.
Top leadership commitment—a vision of diversity demonstrated  and communicated throughout an organization by top-level  management.
Diversity as part of an organization’s strategic plan—a diversity  strategy and plan that are developed and aligned with the  organization’s strategic plan.
Diversity linked to performance—the understanding that a more  diverse and inclusive work environment can yield greater productivity  and help improve individual and organizational performance.
Measurement—a set of quantitative and qualitative measures of the  impact of various aspects of an overall diversity program.
Accountability—the means to ensure that leaders are responsible for  diversity by linking their performance assessment and compensation  to the progress of diversity initiatives.
Succession planning—an ongoing, strategic process for identifying  and developing a diverse pool of talent for an organization’s potential  future leaders.
Recruitment—the process of attracting a supply of qualified, diverse  applicants for employment.
Employee involvement—the contribution of employees in driving  diversity throughout an organization.
Diversity training—organizational efforts to inform and educate  management and staff about diversity.
section_title: CFPB Offices Responsible for Diversity and Inclusion Issues
paragraphs: The following CFPB offices partner together in leading CFPB’s efforts to  promote diversity, inclusion, and equal employment opportunity:
Office of Minority and Women Inclusion (OMWI). The Dodd-Frank  Act required CFPB and other federal financial regulators to create an  OMWI within each agency to deal with matters relating to diversity in  management, employment, and business activities. CFPB created  its OMWI office in January 2012. Among other things, CFPB’s OMWI  is responsible for developing standards for equal employment  opportunity and the racial, ethnic, and gender diversity of the  workforce and senior management of the agency. CFPB’s OMWI also  has statutory responsibility for developing standards to encourage the  use of minority- and women-owned businesses in CFPB  procurements and for developing standards to assess the diversity  and inclusion practices of entities CFPB regulates.
Office of Civil Rights. From CFPB’s inception until February 2013,  the Department of the Treasury (Treasury) directed CFPB’s Equal  Employment Opportunity (EEO) program. In February 2013, CFPB  established its Office of Equal Employment Opportunity to administer  its EEO program. In November 2014, CFPB’s director renamed this  office the Office of Civil Rights to better reflect the office’s oversight of  not only compliance with EEO protections for CFPB employees,  former employees, and applicants, but also protections for members  of the public seeking to access CFPB programs and services. EEO  programs are concerned with adherence to applicable federal statutes  and regulations and Management Directives. The Equal  Employment Opportunity Commission (EEOC) provides policy  guidance and standards to federal agencies for establishing and  maintaining effective EEO programs.
Office of Human Capital. The Office of Human Capital is part of the  Operations division and is led by the Chief Human Capital Officer. The  Office of Human Capital developed CFPB’s Human Capital Strategic  Plan for fiscal years 2013-2015 to provide a roadmap of human  capital initiatives and priorities. CFPB’s Office of Human Capital has  collaborated with the OMWI on implementing steps to promote  diversity and inclusion through human capital policies and practices,  such as in the areas of recruiting, hiring, training programs, and  performance management.
section_title: As a New Agency, CFPB Faced Personnel Management Challenges While Meeting Mission- Related Goals and Deadlines
paragraphs: As CFPB leaders and employees worked to establish a new government  agency, they faced pressure to quickly produce substantive results and  meet challenging statutory deadlines. CFPB employees who were at the  bureau in its first 2 years reported that they felt a strong desire to quickly  and effectively put in place new protections for consumers. CFPB  assumed some existing functions from other government agencies and  began developing new examination, enforcement, and consumer  education capabilities. For example, the Dodd-Frank Act charged CFPB  with examining both large depository institutions and credit unions—which  had previously been subject to federal oversight—and certain  nondepository providers of financial products—which had not—to ensure  that all of these entities comply with federal consumer financial laws. In  addition, the Dodd-Frank Act set forth a number of statutory deadlines for  CFPB related to required rulemakings and reports to Congress.  According to CFPB, it had issued or updated 23 rules by September  2013.
Pressure to produce early results before CFPB had fully developed its  operational infrastructure created what CFPB officials have described as  a “start-up environment.” Similar to the environment at a private start-up  company, CFPB employees were tasked with building new operational  functions—including some government functions that had not existed  before—and doing so in an environment in which project teams were  short on resources and policies and processes were still being developed.
As CFPB employees worked to stand up the bureau and meet demanding  deadlines, they faced challenges related to building the organizational  and personnel infrastructure for a new agency. For example, as CFPB  grew its workforce rapidly (see fig. 5), it had to integrate new employees  coming from very different professional backgrounds. According to data  from a December 2012 CFPB report on its progress in building its human  capital about 60 percent of CFPB’s total workforce after its first year of  operating consisted of employees from other federal government  agencies and about 39 percent of its employees came from the private  sector, nonprofit sector, or other nongovernment employment. A July  2011 CFPB report identified the need for CFPB to integrate employees  coming from many different agencies and other backgrounds into a team  with a cohesive organizational culture and noted that this had been a  point of failure in other mergers of federal agencies. In addition, CFPB  had to develop and strengthen personnel management practices, while  trying to meet mission-related goals and deadlines. CFPB began setting  up its key operational infrastructure, before it formally began operations in  July 2011, and it continued to develop some policies and personnel  management functions after it began operating. In its first few years,  CFPB continued to work towards developing more robust processes for  workforce planning, recruiting, and hiring and to expand and strengthen  its personnel management practices in other areas, such as training and  employee development. CFPB faced competing priorities related to  meeting challenging statutory deadlines and devoting time and resources  to building its organizational culture and providing staff development for  its growing employee population. During this period, CFPB also leveraged  existing operational infrastructure at Treasury to support some personnel  management functions. For example, in fiscal years 2011 and 2012,  CFPB contracted with Treasury to provide EEO complaint processing  services.
In addition, CFPB took steps from its inception to promote a diverse and  inclusive workforce, but it did not implement important elements of its  current diversity efforts until 2015. CFPB established its OMWI in January  2012, and appointed its first OMWI director on April 30, 2012. In OMWI’s  first year, its efforts included working with the Office of Human Capital to  support diversity in recruiting and hiring and analyzing employee survey  results to identify opportunities to maintain and grow an inclusive  workforce. An Inspector General analysis found that at the end of CFPB’s  first few fiscal years (2011, 2012, and 2013), CFPB’s workforce was more  diverse than a benchmark of external labor market diversity, but the level  of diversity by race and ethnicity was lower at the senior management  level (pay grades 80 and above) compared to lower pay grades during  this period. In 2013, CFPB provided interactive diversity awareness  training to employees, opened its in-house EEO office, and introduced  guidance for managers on using structured interviews to avoid bias in  hiring. As discussed later in this report, however, CFPB did not implement  additional important elements of its current diversity efforts, such as  mandatory diversity training and the creation of employee diversity  groups, until 2015.
In 2013 and 2014, CFPB identified areas for improvement in its diversity  and inclusion efforts and concerns about disparate outcomes in its  performance management system. In spring 2013, CFPB’s OWMI  contracted with a private consulting firm to conduct an initial baseline  assessment of the state of diversity and inclusion at the bureau in order to  inform its strategic planning process. In fall 2013, the firm reported its  findings that the bureau’s overall workforce was diverse and it  recommended a number of steps the bureau could take to enhance  diversity and inclusion. Among other findings, the consulting firm’s review  identified disparities in employee performance ratings for fiscal year 2012  by race and gender. For example, the firm’s report found that black  employees were more likely than white employees to receive a rating of 3  out of 5, and that white employees were more likely to receive higher  ratings of a 4 or 5 on this rating scale. It also found that female  employees received higher ratings than men. In December 2013, CFPB  completed its own analyses of employee performance ratings for fiscal  year 2013 and also identified disparities by race, age, and location  (between employees located in the field and those located in CFPB’s  headquarters), among other factors, and it did not identify disparities by  gender. CFPB shared the results of these analyses with CFPB’s  employee union in January 2014.
From November 2013 through early 2014, CFPB also experienced a high  volume of grievance filings and an increase in EEO complaint activity.
With respect to grievances, in June 2013 CFPB and its employee union  reached an interim agreement to establish a negotiated grievance  process. Under this process, a CFPB employee or union representative  could first file an informal grievance to management and CFPB’s Office of  Human Capital. If the matter was not resolved informally, the employee  could then submit a formal grievance (or a “step one” grievance to begin  the formal grievance process). By September 30, 2013, CFPB employees  had filed 24 informal grievances under this process. In fiscal year 2014,  CFPB employees filed a total of 125 informal grievances. Quarterly filings  of informal grievances peaked at 80 in the 3 months ended December 31,  2013 (the first quarter of fiscal year 2014). The number of formal  grievance filings also peaked in this quarter at 35. According to CFPB  data, the majority of grievances filed in the period from late 2013 through  mid-2014 were related to dissatisfaction with performance ratings or  written feedback given to employees in October 2013 for fiscal year 2013.  With respect to EEO complaint activity, in the 3 months ended December  31, 2013, the number of CFPB employees contacting its EEO office to  pursue the informal EEO complaint process increased to 15 from 6 the  previous quarter. The number of formal EEO complaints filed increased  from 9 in fiscal year 2013 to 25 in fiscal year 2014.
In April 2014, following a congressional hearing on allegations of  discrimination and retaliation within CFPB, CFPB’s director e-mailed all  CFPB employees to emphasize his commitment to diversity and inclusion  and to inform them that he had asked the OMWI to lead a series of  listening sessions to seek employees’ views on issues of diversity and  inclusion at CFPB. OMWI invited all CFPB employees to participate in the  listening sessions and provided ways for employees to provide input  confidentially. OMWI conducted 48 listening sessions with more than  300 employees between April and June 2014 and issued a report with its  findings and recommendations in August 2014. The report identified  participant concerns and made recommendations in three areas: (1)  perceptions of unfair treatment in personnel practices and concerns about  diversity and inclusion; (2) complaints about lack of experience and  accountability for managers; and (3) confusion around personnel  processes and structures in the bureau’s hiring, pay-setting, and other  areas. According to CFPB officials, CFPB shared this report with all  employees. In addition to the OMWI-led listening sessions, CFPB took  other immediate steps to address concerns related to diversity, inclusion,  and fairness. For example, in January 2014, CFPB management reached  agreement with the employee union to develop a new performance  management system. In May 2014, CFPB and its employee union agreed  to temporarily replace the old system with a two-tier (or “pass-fail”) rating  system. Also in May 2014, CFPB announced that it would retroactively  compensate all employees (except for senior leaders) who had received  an average performance rating of at least “3” as if they had received the  highest rating of “5” for fiscal years 2012 and 2013. In August 2014,  according to CFPB officials, CFPB’s director approved the expenditure of  funds for these adjustments, and CFPB made remediation payments  exceeding $4 million in the fall of 2014.
In response to a March 2014 congressional request, the Office of the  Inspector General of the Federal Reserve and CFPB began a review of  diversity and inclusion issues at CFPB. The scope of this review  covered CFPB’s recruiting and hiring practices, performance  management, succession planning, tracking of employee complaints, and  the efforts of the OMWI office. In March 2015, the Inspector General  issued its report, which included recommendations to further strengthen  its diversity and inclusion efforts. Among other recommendations, the  Inspector General recommended making diversity and inclusion training  mandatory, finalizing and implementing a diversity and inclusion strategic  plan, and implementing a formal succession planning process to help  ensure that CFPB has a sufficient and diverse pool of candidates for its  senior management positions.
section_title: Employees Reported Positive Aspects about CFPB but Also Concerns about Personnel Management, Fairness, and Trust
paragraphs: CFPB employees who responded to our survey for nonexecutive  employees identified strengths and areas for improvement related to  personnel management and organizational culture at CFPB. Most  respondents (more than 80 percent) agreed that employees in their office  generally are enthusiastic about the bureau’s mission and had positive  views on question items about their supervisors. Overall, respondents  also had positive views on survey items related to valuing and promoting  diversity, but dissatisfaction on some of these items was higher among  black, female, and older respondents. In addition, respondents’ views  indicated heightened concerns related to perceptions of unfair treatment,  experiences with employee complaint processes, employees’ level of  trust that they can raise concerns without negative consequences, and  other issues. For several questions in these areas, more than 25 percent  of respondents had unfavorable views and the proportion of unfavorable  responses was above 35 percent in some CFPB offices and for some  minority respondents, female respondents, respondents 40 years of age  and over, and respondents who did not specify a race. As is common in  similar surveys of federal employees, CFPB executives, who responded  to a separate survey, consistently provided more favorable responses  than nonexecutives.
As previously discussed, the response rates for our surveys of  nonexecutive and executive employees were 62 percent and 63 percent,  respectively. We do not make any attempt to extrapolate the findings to  the eligible employees who chose not to complete our surveys. The  results of our surveys provide measures of employees’ views at the time  they completed the survey in April, May, or June 2015. Where  appropriate, we have included information about relevant government- wide survey data to provide additional context for our survey results.  However, because of limitations in comparing our results to these other  surveys, we did not attempt to draw conclusions about the extent to which  CFPB has performed better or worse than other agencies in these  areas. The full set of questions and results for both surveys is available  on GAO’s website as an e-publication supplement to this report,  Consumer Financial Protection Bureau: Survey Results from Employees  and Executives on Personnel Management and Organizational Culture  (GAO-16-138SP, May 2016).
subsections: section_title: Views on CFPB’s Mission and Supervisors
paragraphs: As shown in table 1, more than 80 percent of CFPB employees who  responded to our survey had favorable views of employee enthusiasm for  the bureau’s mission and items related to their immediate supervisors and  inclusion by their work teams. Some of these areas also emerged as  strengths in CFPB’s annual employee survey for fiscal year 2015. For  example, our survey found that 84 percent of respondents agreed that  employees in their office or division are generally enthusiastic about  CFPB’s mission. Similarly, in CFPB’s annual employee survey,  employees also expressed positive views about the bureau’s work, with  92 percent agreeing with the statement, “The work I do is important.”  CFPB’s OMWI also identified employee enthusiasm for the mission as a  strength in listening sessions it led with over 300 employees between  April and June 2014.
Most employees who responded to our survey—85 percent—agreed that  their immediate supervisor treats them fairly. In addition, about 81 percent  of respondents agreed that their immediate supervisor respects and  values differences among individuals and that their work teams make  them feel included. Similarly, in CFPB’s 2015 annual employee survey,  more than 85 percent of employees agreed that their supervisor treats  them with respect and that their colleagues share information and help  each other out.
section_title: Views on Valuing Differences and Promoting Diversity
paragraphs: In addition to expressing positive views of supervisors’ support for  diversity, at least 65 percent of employees responding to our survey had  positive views on other survey items related to valuing and promoting  diversity at CFPB. However, levels of respondent satisfaction varied  across demographic groups. As shown in table 2, while 73 percent of all  respondents agreed that differences among individuals are respected and  valued, higher rates of disagreement were reported by black respondents  (24 percent compared to 8 percent for white employees), female  respondents (17 percent compared to 9 percent for men), and  respondents 40 years of age and over (16 percent compared to 10  percent for employees under 40). CFPB’s 2015 annual employee  survey also showed higher dissatisfaction among black respondents.
Table 2. Survey Responses about Diversity and Inclusion for Nonexecutive Consumer Financial Protection Bureau (CFPB)  Employees   Survey Statement: Differences among individuals  (e.g., gender, race, national origin, religion, age,  cultural background, disability, sexual orientation) are  respected and valued.  CFPB-wide (all respondents, n=860)  Asian (n=49)
In addition, 65 percent of nonexecutive employees responding to our  survey agreed that policies and programs promote diversity in the  workplace. However, responses were less favorable among some  minority groups and female employees. Specifically, higher rates of  disagreement were reported by Asian and black respondents (35 percent  and 27 percent, respectively, compared to 11 percent for white  employees), as well as female respondents (25 percent compared to 10  percent for men). Compared to the government-wide results for this item  from OPM’s 2015 Federal Employee Viewpoint Survey (“Policies and  programs promote diversity in the workplace”), CFPB respondents  reported greater overall satisfaction (65 percent versus 56 percent  government-wide). The government-wide results for this item also  showed greater dissatisfaction among black employees compared to  white employees (24 percent compared to 12 percent) and female  employees compared to male employees (18 percent compared to 13  percent).
section_title: Views on Favoritism and Discrimination
paragraphs: Our survey collected responses from CFPB employees about their  perceptions of personal favoritism and discrimination at CFPB. The  Merit Systems Protection Board (MSPB) has surveyed federal employees  on their perceptions of discrimination and favoritism and data from these  surveys provide context for the possible extent of such perceptions in  other parts of the federal government. In December 2013, the MSPB  reported that about 28 percent of federal employees surveyed in 2011  believed that their supervisor demonstrated favoritism by treating some  employees better than others and 53 percent believed that other  supervisors within their agency engaged in favoritism. A 2007 MSPB  survey found that the percentage of federal employees who responded  that they believed that they had been personally discriminated against on  the basis of race or ethnicity ranged between 10 percent and 20 percent  for nonwhite federal employees.
As shown in table 3, about a third of all respondents disagreed that  success at CFPB is based more on merit than on personal connections to  managers or favoritism. Disagreement was higher among black  respondents (41 percent compared to 26 percent for white respondents),  respondents who did not identify their race (46 percent) and female  respondents (37 percent compared to 25 percent for men). In addition,  within the Office of Consumer Response and the Office of Human Capital  in the Operations division, and two of CFPB’s four regional offices and  two other offices in the SEFL division, 40 percent or more of respondents  disagreed. In open-ended responses to our survey, several employees  cited specific instances of a colleague appearing to be selected for a  more senior position or other opportunity based on a personal connection  to a manager.
Through the listening sessions led by its OMWI, CFPB identified  perceptions of favoritism as one of multiple factors for concern and  concluded that lack of employee understanding of existing policies may  have contributed to perceptions of unfair treatment. In our survey, more  than a third of respondents in three of the regional offices in the SEFL  division who reported having experience with the hiring process  disagreed that hiring policies are clear. In addition, more than a third of  respondents in these three regional offices disagreed that criteria for  promotions in their current office are clearly communicated. Many  respondents also disagreed that the process for staffing assignments in  their office was fair and transparent. In two regional offices and a small  office in the SEFL division, at least 40 percent of respondents indicated  unfair assignment allocations compared to 31 percent overall.
About 18 percent of employees who responded to our survey reported  that they felt they had experienced discrimination at CFPB, and  perceptions of discrimination were around 25 percent or more for some  demographic groups and in the Office of Consumer Response and in a  small office in SEFL. As shown in table 4, the percentage of  respondents who reported that they had personally experienced  discrimination at CFPB was highest among black respondents (27  percent compared to 12 percent for white employees), Asian respondents  (25 percent), respondents who did not identify their race (22 percent) and  female respondents (25 percent compared to 11 percent for men). Of the  survey respondents who reported that they believed they had  experienced discrimination, the most commonly reported bases for  discrimination were race or ethnicity (47 percent), gender (47 percent)  and age (41 percent).
section_title: Views on Complaint Processes
paragraphs: Most survey respondents (83 percent) agreed that they understood  available avenues to pursue a complaint. However, among the subset of  respondents who reported having experience with the EEO complaint  process or grievance process, many expressed dissatisfaction with  certain aspects of these processes (see table 5). Specifically,  respondents with experience with these complaint processes expressed  dissatisfaction with management’s willingness to resolve complaints  informally, CFPB’s efforts to protect the privacy of complainants, and the  independence of the EEO office from management. For example, of  those respondents who filed a grievance, 71 percent (55 out of 77  respondents) disagreed that CFPB management made a good faith effort  to resolve the complaint informally. In addition, complainants reported a  lack of confidence that managers, Human Capital employees, and others  with a need to know about the grievance or complaint did not  inappropriately share information about the complaint with others without  a need to know. In open-ended responses to the survey, several  employees cited examples of cases in which a complainant’s privacy was  compromised when information about the complaint was shared by  managers, the EEO office, or the Office of Human Capital with individuals  without a need to know about the complaint. In open-ended responses to  the survey, a few employees also said that CFPB managers seemed  unwilling to resolve issues through the informal complaint resolution  processes. One respondent said that a representative from the Office of  Human Capital indicated that if the employee wanted the issue resolved,  the employee would have to file a formal EEO complaint or grievance.  CFPB officials noted that, by regulation, certain forms of relief (including  retroactive pay adjustments or retroactive promotions) can be provided  only if a formal complaint has been filed. In some cases, therefore,  informal processes cannot provide the requested relief, and proceeding  directly to formal complaints may be the best option to resolve the matter.  We discuss CFPB’s efforts to strengthen and evaluate its management of  its complaint processes later in this report.
section_title: Views on Trust and Perceptions of Management Retaliation
paragraphs: On survey items about employees’ confidence that they could raise  concerns or file a complaint without fear of negative consequences or  reprisal by a manager, more than a quarter of respondents provided  unfavorable responses. In the Office of Human Capital, two regional  offices, and two other small offices in SEFL, more than 35 percent of  respondents reported that they did not feel comfortable raising concerns  or filing a complaint. About 10 percent of respondents reported that they  had observed retaliation, and perceptions of retaliation among these  respondents may have contributed to their lack of trust that they can raise  issues with management.
About 27 percent of employees who responded to our survey disagreed  that employees in their office generally feel comfortable that they can  raise concerns or disagree with superiors without worrying about negative  consequences (see table 6). The percentage of respondents who were  concerned about negative consequences was higher among black  respondents (30 percent compared to 23 percent for white employees),  female respondents (29 percent compared to 20 percent for men), and  respondents 40 years of age and over (29 percent compared to 23  percent for employees under 40) and in the Office of Human Capital and  two regional offices and two small offices in SEFL (above 35 percent).  Similarly, 28 percent of respondents disagreed that they had confidence  that they could pursue a complaint through informal or formal channels  without fear of reprisal. Concerns were higher among the same groups:  black respondents (33 percent compared to 23 percent for white  respondents), respondents who did not identify their race (36 percent),  female respondents (31 percent compared to 22 percent for male  respondents), the Office of Human Capital, two regional offices, and a  small office in SEFL (above 35 percent).
About 9 percent of respondents reported that they have personally  experienced retaliation by a supervisor or manager and about 10 percent  reported that they observed retaliation against another employee. Of  those who reported experiencing or observing retaliation, the most  commonly reported forms of retaliation were lower performance ratings  (51 percent) and removal or reassignment of job duties (59 percent). In  fiscal year 2014, 16 of 25 (64 percent) formal EEO complaints filed by  CFPB employees included “reprisal” as at least one of the bases for filing  a complaint under the No FEAR Act. For 6 of these complaints, reprisal  was the sole basis cited for the complaint.
section_title: Views on Management Accountability and Commitment to Addressing Concerns
paragraphs: Bureau-wide, over a third of employees who responded to our survey  disagreed that a culture of accountability exists in which employees at all  levels are held accountable for their actions (see table 7). In addition,  female respondents reported greater concerns about accountability than  men (39 percent for women compared to 29 percent for men).  Respondents who did not identify their race also reported higher  disagreement (46 percent). Some employees’ remarks in open-ended  responses to our survey suggested that unfavorable responses to this  question may have been influenced by their view that the temporary  “pass-fail” rating system does not hold poor performers accountable. On a  survey item about manager accountability, 23 percent of respondents  disagreed that managers are held accountable with respect to how they  manage people and personnel issues and disagreement was higher in  the Office of Consumer Response (33 percent), the Office of Human  Capital (49 percent) and a small office in SEFL (52 percent). In open- ended responses, several employees expressed concerns that managers  who they believed to have engaged in discrimination, favoritism, or other  wrongdoing had not been held accountable. Accountability for managers  was also among the issues identified as an area for attention in the  OMWI-led listening sessions. An official from CFPB’s Office of Human  Capital noted that CFPB does not announce actions taken against  managers about whom employees have complained and this presents a  challenge to addressing negative perceptions about manager  accountability. Officials explained that in situations where the Office of  Human Capital Labor and Employee Relations team identifies recurring  issues with a particular manager within an office or division, it  communicates the concerns to the senior manager of that office or  division along with recommendations for addressing them. In addition,  according to CFPB officials, the Office of Civil Rights tracks when there is  more than one complaint against a management official and alerts the  appropriate executive in those cases. In cases of allegations of  harassment or other inappropriate conduct, the Labor and Employee  Relations team investigates the complaint. As of September 2015,  officials told us that there had been three managers with multiple  allegations of misconduct, and the Labor and Employee Relations team  recommended counseling for the manager in those cases. We discuss  CFPB’s efforts to strengthen management accountability later in this  report.
In addition, while most respondents (58 percent) agreed that senior  leaders have taken meaningful steps to manage the transition from a  start-up agency to a more mature agency, 35 percent disagreed that  leaders are committed to addressing concerns that may affect employee  retention, and 30 percent disagreed that senior leaders promote a culture  in which problems and solutions are openly discussed. As shown in table  8, concerns about leaders’ commitment to addressing problems were  higher among female respondents (39 percent compared to 28 percent  for men).
section_title: Views on Employee Morale and Related Issues
paragraphs: While about 65 percent of respondents agreed that their morale is good,  in some offices in the SEFL and Operations divisions, more than 30  percent of employees disagreed. Rates of disagreement were also higher  among female respondents (28 percent compared to 18 percent for men).  Respondents in some offices that reported lower morale also expressed  greater dissatisfaction with CFPB’s efforts to retain talented employees.  For example, in some offices in the SEFL and Operations divisions, more  than 30 percent of respondents disagreed that their morale is good and  more than 45 percent disagreed that their office retains its talented and  qualified employees. About a third of respondents indicated that their  morale had improved in the last 12 months, while another third reported  their morale had decreased in that period. Respondents in some offices,  including two offices in the Operations division, two regional offices, and a  small office in SEFL, showed more decline than the bureau overall.
In addition to areas of concern highlighted in the survey results discussed  earlier, some employee groups who responded to the survey identified  specific concerns in other areas that may have affected their morale.  These other areas of concern include the following:
Pay equity. Employees who responded to our survey indicated  concerns about unfair treatment in salary-setting at the time of hire. A  third (33 percent) of respondents indicated that they felt that their  starting salary at CFPB did not provide what they believed to be fair  compensation for their skills, work experience, and education. More  than 40 percent of respondents in two regional offices expressed  dissatisfaction with their starting salary. In addition, among the 28  percent of respondents who said they raised concerns about their  salary with a superior or Office of Human Capital representative,  about 74 percent (176 out of a total of 239 respondents) were  dissatisfied with CFPB’s response to their concerns. CFPB officials  noted that CFPB has undertaken efforts to review compensation for a  number of employees to determine if adjustments to starting salaries  were appropriate. While our survey asked employees about their  satisfaction with their initial salary, in response to a different question  in CFPB’s annual employee survey for fiscal year 2015, about 67  percent of respondents indicated that they were satisfied with their  pay. This result compared favorably to a 57 percent level of pay  satisfaction government-wide.
Opportunities for advancement and the examiner commissioning  process. More than 35 percent of respondents reported  dissatisfaction with their opportunity to get a better job in the bureau  and disagreed that criteria for promotions are clearly communicated to  employees. Government-wide employee survey results from the 2015  Federal Employee Viewpoint Survey also showed a level of  dissatisfaction above 35 percent with the opportunity to get a better  job. Many respondents in the SEFL division expressed dissatisfaction  with the new process for commissioning examiners CFPB finalized in  late 2014, following negotiation with CFPB’s employee union. For  example, 22 respondents commented that they were dissatisfied that  this new commissioning process included new requirements for  advancement that had not existed when they were hired. Several  respondents expressed dissatisfaction with aspects of the new  commissioning process, such as a requirement to pass a final case- study exercise.
section_title: Views of CFPB Executives
paragraphs: We administered a separate survey to CFPB executives, and 36 out of  the 57 executives who received the survey provided responses. CFPB  executives who responded to this survey generally provided favorable  responses on most survey items (with at least 65 percent selecting a  response in one of the top two positive categories for all but two question  items). As is common in similar surveys of federal employees, CFPB  executives consistently provided higher rates of favorable responses than  nonexecutive employees on similar questions that were included in both  surveys. For example, 32 of 36 executive respondents (91 percent)  agreed that success at CFPB is based on merit rather than personal  connections and 34 out of 36 executive respondents (97 percent) agreed  that employees in their division or office feel comfortable raising  concerns. In comparison, agreement among nonexecutive respondents  on these items ranged from 50 percent to 56 percent.
section_title: CFPB Has Taken Steps to Address Challenges, but Lacks Some Mechanisms to Support Sustained Commitment and Accountability
paragraphs: As part of ongoing efforts to strengthen its personnel practices and  through the internal and external reviews discussed earlier in this report,  CFPB identified specific challenges related to promoting a diverse,  inclusive, and fair work place and actions to address them. These  challenges and related actions can be grouped into three areas: (1)  perceived fairness in personnel management practices; (2) diversity,  inclusion, and culture efforts; and (3) practices for managing employee  complaints. In the last 2 years, CFPB has taken a number of steps to  address challenges in these areas, such as expanding training, improving  communication on policies and procedures, enhancing diversity and  inclusion efforts, and strengthening management of employee complaint  processes. However, CFPB does not comprehensively report on its  implementation goals and progress for the full range of its diversity,  inclusion, and fairness initiatives. In addition, while CFPB is in the  process of developing new tools to collect employees’ feedback on their  experiences with the EEO complaint process, it has not created similar  tools for its grievance processes.
subsections: section_title: CFPB Has Taken Steps to Improve Personnel Practices in the Past 2 Years, but It Is Too Soon to Assess Their Effect
paragraphs: Partly in response to employees’ expressed concerns about favoritism or  unfair treatment in certain personnel practices—such as hiring,  performance management, promotions, and detail opportunities—as well  as recommendations from the Inspector General and other external  reviews, CFPB has taken steps to review and strengthen its policies and  practices in these areas. Specifically, during 2014 and 2015 CFPB took  steps to improve training, communication, policies, and guidance and to  review underlying factors that may have contributed to disparities in  ratings under the prior performance management system and differences  in employee perceptions of other personnel practices. The overall effect  of these changes and reviews on employee views and bureau culture is  difficult to determine at this time, in part because some changes, such as  the adoption of a new performance management system, have not yet  been implemented and others have been implemented only recently.
Expanding management training related to personnel practices.
In OMWI’s 2014 listening sessions discussing employee views on  diversity and inclusion at CFPB, employees expressed concerns  about managers’ lack of management experience, and noted some  managers lacked effective communication skills and either  micromanaged or undermanaged employees. In the past 2 years,  CFPB has identified opportunities to enhance its manager training  programs and expanded training for managers on leadership and  management topics. For example, in 2014, CFPB began holding  Leadership Excellence Seminars at which it provided training for  managers and supervisors on a range of leadership and management  topics, such as a leader’s role in developing employees, addressing  performance issues, and providing feedback as part of the  performance management process. In May 2014, CFPB made equal  employment opportunity training mandatory for all managers and  supervisors. In a separate review of CFPB’s performance  management system, a June 2015 consultant report noted that some  CFPB managers did not have prior experience with performance  management and additional manager training was needed. CFPB  mandated that all employees take performance management training  in February 2015.
Improving communication of existing policies and new  initiatives. CFPB officials with whom we spoke said that employee  comments about unfair treatment suggested that many employees  were not aware of existing policies and procedures related to  personnel management. CFPB has taken steps to simplify its  communications about policies and make important information more  accessible to employees. In early 2015, CFPB hired two  communications experts who have worked with staff in Human Capital  and other CFPB offices to simplify communications about CFPB  policies, initiatives, and resources for employees. CFPB staff reported  that these experts helped revise existing CFPB communications and  create new tools to inform managers and supervisors of relevant  developments and provide them with guidance on managing staff. In  addition, staff from the Office of Human Capital reported that they  developed a web page on CFPB’s intranet that provides and  consolidates resources on career planning in one place.
Developing new policies, tools, and guidance on promotions,  detail assignments, and career paths. To help provide more  transparency around promotion processes and career development,  CFPB issued new promotion policies and career development  guidance. For example, CFPB developed a new tool for managers to  advertise detail opportunities on the home page of CFPB’s intranet so  they would be accessible to all employees to address employee  concerns about the fairness and transparency of selections for detail  assignments. This tool is intended to promote greater transparency  and encourage more employees to apply to these opportunities.  CFPB completed a review of this tool in August 2015.  The review  found it was well-received by both managers and employees, and  CFPB planned to make some changes based on stakeholder  feedback. In addition, in September 2014, CFPB issued a Career  Path Guide that provided an overview of types of jobs and guidance  on how to navigate different career paths within CFPB to respond to  feedback from employees who were concerned about or unaware of  career options within the bureau.
Reviewing factors related to differences and potential differences  in certain personnel practices. As discussed previously, both CFPB  and a private firm hired by the Inspector General identified  discrepancies in performance management ratings by race. The  Inspector General’s report recommended that CFPB conduct a more  comprehensive assessment of factors that may have contributed to  disparities in performance ratings. In September 2014, CFPB  contracted with two third-party firms to review its performance  management, compensation, and hiring practices. In June 2015, one  of the consulting firms issued a report that identified potential root  causes of ratings disparities and described steps CFPB is taking to  address these root causes, such as the need for additional  performance management and manager training discussed  previously.
Developing a new performance management system. In  September 2014, CFPB established a joint Labor-Management  Performance Management Working Group to design a new  performance management rating program.  This working group  included representatives from CFPB’s employee union, CFPB  management, and subject-matter experts from OMWI, the Office of  Civil Rights, the Legal division, and the Office of Human Capital.  In  April 2016, CFPB’s director sent an e-mail to CFPB employees  announcing that the working group had reached consensus on  recommendations for improving CFPB’s performance management  program.  The working group outlined five guiding principles it  considered in developing these recommendations.  Specifically, the  performance management program should be (1) mission and culture  driven, (2) developmentally focused, (3) minimally burdensome, (4)  fair and equitable, and (5) supported by clear management  accountability.  In fiscal year 2016, CFPB is continuing to use the  performance management competencies previously in place with the  pass/fail rating system negotiated with the employee union.  CFPB  plans to phase in new performance standards for managers and  nonsupervisory employees to give employees time to adapt to the  new performance standards and coaching guidelines.  CFPB expects  to introduce new performance standards for managers in fiscal year  2017 and nonsupervisory employees in fiscal year 2018.  CFPB’s  performance management program policy states that CFPB will  continue to use a two-level rating scale (with ratings of “Unacceptable”  or “Accomplished Performer”) through fiscal year 2019.
section_title: CFPB Has Taken Steps to Expand Its Diversity and Inclusion Efforts
paragraphs: As previously discussed, in prior work, we have identified leading  practices for diversity management. CFPB has implemented initiatives  that correspond to several of these leading practices, including initiatives  begun during the past 2 years in the areas of top leadership commitment,  strategic planning, diversity linked to performance, recruitment, employee  involvement, diversity training, and measurement. CFPB has also taken  some steps to address recommendations from the Inspector General  related to its diversity and inclusion practices.
Top leadership commitment. Since CFPB identified performance  rating disparities in late 2013, CFPB leadership has taken steps to  emphasize their commitment to supporting diversity and inclusion. In  prior work, we have noted that leadership commitment expressed by  commitment of time and resources and the communication of the  importance of diversity by top leadership is a fundamental element of  diversity management initiatives. In April 2014, CFPB’s director  expressed support for diversity and equal employment opportunity  through a bureau-wide e-mail communication. He also announced  that CFPB’s OMWI, which had been located in CFPB’s Operations  division, would be elevated to the Office of the Director to facilitate  greater access and communications between the two offices.  CFPB’s OMWI director issued additional statements in 2015 about the  importance of diversity and inclusion and CFPB leadership’s  commitment to improving the culture at the bureau. In addition, CFPB  recently issued standards for equal employment opportunity and  diversity pursuant to requirements in the Dodd-Frank Act that became  effective October 1, 2015.
Diversity as part of CFPB’s strategic plan. CFPB recently has  implemented changes to more fully incorporate diversity and inclusion  into its strategic planning efforts. Integrating diversity management  into an organization’s strategic planning efforts is a leading diversity  management practice that helps to ensure sustained top leadership  commitment to progress on diversity management initiatives, even  when senior leaders change or agency priorities shift. CFPB’s  agency-wide strategic plan for fiscal years 2013 to 2017 includes a  goal related to its workforce that states it plans to develop a strategy  to recruit and retain a high-performing, diverse staff with the right skills  and abilities to meet mission-driven goals and objectives. In  subsequent reports reviewing the status of its strategic planning  efforts, CFPB identified specific measures (based on CFPB’s annual  employee survey results) that it would use to track its progress toward  this goal. In accordance with CFPB’s strategic planning process and  with support from its OMWI, each CFPB division has adopted diversity  and inclusion goals.
On October 2, 2015, CFPB finalized its diversity and inclusion  strategic plan for 2016 to 2020. CFPB developed this plan in part to  meet the OPM directive that agencies develop a specific diversity and  inclusion strategic plan that outlines the actions agencies plan to take  to achieve the priorities in the 2011 Government-Wide Diversity and  Inclusion Strategic Plan and the responsible agency official for each  action. OPM’s guidance describes three goals of the government- wide effort—workforce diversity, workforce inclusion, and  sustainability—and the steps agencies can take to address these  goals. CFPB’s plan addresses the priorities and actions it plans to  take under each of these three goals. These include efforts described  in this report, such as expanding recruitment efforts, developing  leadership training, and creating an employee diversity and inclusion  council. The plan also states that CFPB plans to ensure that all CFPB  leaders and staff have performance measures in place to ensure  proper execution of the plan and that CFPB will develop and widely  distribute a set of diversity and inclusion measures to track CFPB’s  efforts both bureau-wide and for each division.
Diversity linked to performance. CFPB has taken steps to link  diversity goals to organizational performance by communicating the  business case for diversity to its employees. In June 2015, CFPB’s  OMWI director issued a memorandum to all employees stating that  diversity and inclusion are important to bring new perspectives to  CFPB’s work and foster an environment where all employees feel  valued and empowered to share their views and ideas. The  memorandum also noted the importance of workforce diversity given  CFPB’s mission to develop financial solutions relevant to all groups of  consumers and craft policies that ensure women and minorities fairly  benefit from economic recovery.
Recruitment. As discussed earlier, in OMWI’s first year, its efforts  included working with the Office of Human Capital to support diversity  in recruiting and hiring and analyzing employee survey results to  identify opportunities to maintain and grow a diverse workforce. A  leading diversity practice is to partner with a wide selection of schools  and multicultural professional organizations to reach out to diverse  pools of talent. In April 2014, both offices published a document that  formalized a diversity recruiting strategy that had been in place since  fiscal year 2013, according to CFPB officials. CFPB also developed a  recruitment and outreach plan to inform managers of their strategies  to use career expos, student symposiums, and partnerships with local  and national diversity organizations to attract diverse job applicants in  June 2015. In September 2015, CFPB officials reported that the  strategy had not changed since the document was published in April  2014.
Employee involvement. In 2014 and 2015, CFPB took steps to  increase the number of opportunities employees have to provide input  into diversity and inclusion efforts and further develop a diverse and  inclusive workforce. Our work on diversity management has noted  that involving employees at all levels in diversity management is a  leading practice that helps them contribute to an organization’s efforts  to improve diversity and inclusion throughout the organization. As  part of this effort, many organizations have diversity advisory councils  to initiate and manage diversity and inclusion progress. In 2014,  CFPB launched its Diversity and Inclusion Executive Advisory  Council, consisting of 12 executives from throughout CFPB, including  the Assistant Director of OMWI, the Chief Human Capital Officer, and  the Chief Financial Officer. The council is a leadership advisory group  that provides strategic guidance to the director and senior leaders  about ways to improve diversity and inclusion.
Also in 2015, CFPB launched several other employee-involvement  initiatives. On September 7, 2015, CFPB’s director announced plans  to start a staff-level Diversity and Inclusion Council of Employees to  serve as a platform for employees to contribute their ideas, implement  CFPB-wide initiatives, and provide feedback to leadership on diversity  and inclusion initiatives. According to CFPB officials, members of the  council have been selected and initial meetings have been held.  According to its charter, this council is also to serve as a means  through which employees can voice concerns about diversity and  inclusion to management, help in communicating initiatives to other  employees, and measure the results of initiatives. Members of the  council plan to meet with the director twice a year and with the  Executive Advisory Council quarterly. In addition, CFPB officials  reported that they have drafted a policy and guidance for employees  to establish employee resource/affinity groups. In the summer of  2015, OMWI also announced the start of a pilot mentoring program,  focused on employees in two divisions and mentors throughout CFPB  management, and with a stated purpose to help CFPB build a more  diverse, experienced, and inclusive workforce. According to CFPB  officials, CFPB conducted the pilot mentoring program in fall 2015 and  obtained feedback from participants. Based on the feedback received  from mentors and mentees who participated, CFPB plans to make  improvements to the program.
Training. In accordance with the leading diversity management  practice, CFPB has expanded its offerings of diversity and inclusion  training—and made certain trainings mandatory—to help its  management and staff increase their awareness and understanding of  diversity and inclusion. In 2013, CFPB contracted with a diversity  expert to provide training designed to examine issues of diversity and  inclusion and how they affect people in the workplace for employees  at all levels.  In February 2015, CFPB made this training mandatory.  In 2014, CFPB began offering a 2-day leading diversity and inclusion  workshop specifically for managers and supervisors developed by an  external consultant. This training, developed to address ways to give  appropriate consideration of staff differences in managerial or  supervisory decisions and actions, was made mandatory in July 2015.  In June 2014, CFPB also began requiring managers to take a 2-day  course led by the Equal Employment Opportunity Commission  Training Institute on equal employment opportunity laws and  managerial responsibilities. CFPB officials said that training on EEO  principles and unconscious bias has been provided to hiring  managers and has helped to reinforce earlier efforts to promote  greater fairness in hiring, such as providing guidance to managers on  using the same set of structured interview questions for all job  candidates.
Measurement. CFPB has adopted several practices that are  consistent with leading diversity management practices for  measurement. It is a leading practice for organizations to collect  quantitative and qualitative data to evaluate the effectiveness of their  diversity management efforts. In addition, CFPB’s diversity and  inclusion strategic plan cites the need for performance measures and  for CFPB to communicate its progress and effectiveness on its  diversity and inclusion initiatives. CFPB has developed some agency- wide metrics, division-specific goals, and processes related to  diversity and inclusion. These metrics include the following: Inclusion indices based on the annual employee feedback results.  In 2013, OMWI added an OPM-developed measure—the  Inclusion Quotient—to its analysis of CFPB’s annual employee  survey results to facilitate measurement of CFPB employees’  views on inclusiveness at CFPB. OMWI has begun analyzing  employee responses to these questions in terms of five  categories: fair, open, cooperative, supportive, and empowered.  Using the annual employee survey data results, CFPB has  compared its overall inclusiveness scores to those of other  government agencies, and has started comparing the five scores  across different divisions.
Division-level diversity and inclusion goals and objectives. CFPB’s  OMWI director reported that OMWI staff have met with division  leaders and provided them suggestions for diversity and inclusion  goals for each division. OMWI also has developed demographic  data on race and gender (including by pay grade) for each division  at CFPB, and these data are incorporated into the division’s  quarterly performance review with senior management. Starting in  fiscal year 2015, CFPB has used its quarterly performance review  meetings to hold discussions among senior leaders about  progress toward achieving division-specific diversity and inclusion  goals. According to CFPB officials, at these quarterly  performance reviews—which include the director of the Office of  Equal Opportunity and Fairness, the Deputy Director, Chief of  Staff, and Chief Strategy Officer—the CFPB Director asks division  leaders questions regarding their diversity and inclusion goals and  about divisional efforts to promote diversity and enhance the  employee experience. They also reported that certain divisions  have specific annual employee survey indices in their division  strategic plans and quarterly performance review metrics.
Succession Planning. CFPB has taken steps to develop a formal  succession planning process for identifying and developing a diverse  pool of talent for its future. Succession planning is a comprehensive,  ongoing strategic process that provides for forecasting an  organization’s senior leadership needs; identifying and developing  candidates who have the potential to be future leaders; and selecting  individuals from among a diverse pool of qualified candidates to meet  executive resource needs. Succession planning is a leading practice  that allows federal agencies the opportunity to change the diversity of  the executive corps through new appointments. In its March 2015  report, the Inspector General recommended that CFPB develop and  finalize a formal succession planning process and noted that without  such a process, CFPB may not be able to ensure that it will have a  sufficient number of qualified executives or will be able to retain high- performing staff in mission-critical positions. Furthermore, the  Inspector General noted that a succession planning process could  help to ensure diversity in CFPB’s senior management.
In response to the Inspector General’s recommendation, a CFPB  official noted that CFPB has used a succession management guide it  issued in October 2014 to help shape the design of its succession  planning process. Although this guide outlines a process by which  CFPB leaders are to review senior workforce needs, it is not a formal  plan that identifies those needs and the strategies CFPB plans to use  to achieve its leadership goals. After publishing the guide, CFPB  developed a list of key leadership and technical positions that are  most critical to CFPB’s ongoing success, one of the first steps in the  guide.  In addition to this guide, CFPB officials noted that CFPB has  taken other steps toward developing a formal succession planning  process.  For example, according to CFPB officials, in February 2016,  CFPB developed a 3-year approach (fiscal years 2016 through 2018)  to formalizing its succession management and strategic workforce  planning programs.
Management Accountability. Our work on leading practices has also  pointed to the importance of having means to hold managers  responsible for diversity by linking their performance assessment to  diversity and inclusion goals. While CFPB has taken some steps to  promote diversity and inclusion within its performance management  system, its current system provides limited means to hold managers  accountable for promoting a diverse and inclusive workplace. CFPB  currently has a temporary pass/fail performance management rating  system, which applies to managers as well as employees. In March  2015, the Inspector General found that CFPB’s performance  management competencies at that time for supervisors and managers  did not adequately measure diversity and inclusion efforts.  Specifically, the Inspector General found that the performance  management competencies in place for senior managers did not  sufficiently connect the managers’ performance assessments with  progress towards CFPB’s diversity and inclusion initiatives. The  Inspector General noted that, as a result, CFPB could miss  opportunities to ensure that supervisors and managers are held  accountable for helping CFPB achieve its diversity and inclusion  initiatives. The Inspector General recommended that CFPB create  specific supervisor and manager performance competencies related  to diversity and inclusion.
In September 2015, the Inspector General closed this  recommendation based on CFPB’s efforts to enhance individual  manager accountability through the performance management system  in place for fiscal year 2016. In closing this recommendation, the  Inspector General noted that CFPB’s fiscal year 2016 performance  competencies for supervisors and senior managers included  measures related to promoting diversity and inclusion. In developing a  new performance management system, CFPB has incorporated  standards specifically related to diversity and inclusion into their  performance competencies for managers and, as discussed earlier,  these standards will be in effect beginning in fiscal year 2017. CFPB  officials also told us that the quarterly performance reviews (described  previously) are another tool CFPB leadership uses to hold leaders  accountable for making change. In addition, CFPB can use its  disciplinary policy to hold employees accountable for misconduct,  such as engaging in discrimination or harassment.
In addition, in January 2015, CFPB launched an initiative called  Workforce of the Future to build a stronger organizational culture. This  initiative is intended to define and shape organizational norms, such as  positive employee behaviors, and effective management practices,  including promoting diversity and inclusion throughout the bureau. This  initiative has been aimed at making people—not just the mission—a  priority at CFPB and establishing bureau-wide norms to improve  employees’ experiences. According to CFPB officials, steps taken to  achieve the objectives of the Workforce of the Future initiative include, but  are not limited to, developing and communicating norms to guide  communications between individual employees; conducting a survey to  assess progress made in creating awareness of the norms and modeling  the norms; and holding outreach sessions with employees from across  CFPB to obtain their input on ideas for improving CFPB’s culture and  addressing employee concerns.
section_title: CFPB Does Not Comprehensively Report on Progress Related to Its Diversity, Inclusion, Fairness, and Culture Initiatives
paragraphs: CFPB’s efforts to address employee concerns about diversity, inclusion,  fairness, and culture together represent a significant change management  initiative. As we have previously reported, significant change  management initiatives can take years to complete and therefore must be  carefully and closely managed and monitored to achieve success.  Specifically, our research on significant change initiatives found that it is  essential to establish and track implementation goals and establish a  timeline to pinpoint performance shortfalls and gaps and suggest  midcourse corrections. Furthermore, providing transparency around  results and processes used to achieve results can help an organization to  build the employee enthusiasm and momentum needed to help ensure  that change management initiatives are successful.
CFPB has developed implementation goals and timeframes for some of  its initiatives and mechanisms to measure and communicate progress.  However, it does not have a comprehensive reporting mechanism to  communicate its implementation goals and progress across its full range  of initiatives, including those intended to strengthen personnel practices,  diversity and inclusion initiatives, and its organizational culture. CFPB  officials noted that the bureau has not explored options to report on its  progress across these areas in a more comprehensive and integrated  manner and that doing so would require attention to how to leverage  existing mechanisms without creating undue burdens. As discussed,  CFPB has developed some measures related to diversity and inclusion.  CFPB officials told us they also plan to collect and respond to employee  feedback by using CFPB’s existing process for evaluating employee  survey results and through its Workforce of the Future initiative. A  comprehensive reporting mechanism for showing progress would allow  CFPB to (1) better track new and ongoing employee concerns and  organizational plans to address them and (2) report on implementation  goals and progress across its various initiatives and any outcomes to all  employees. A comprehensive approach to reporting on progress across  the various initiatives could help to make employees more aware of the  status and timeframes for the full range of its initiatives, how these  initiatives relate to intended results, and how CFPB is using measures  and employee feedback mechanisms to assess its progress. CFPB’s  actions and initiatives on diversity, inclusion, and fairness have been  wide-ranging. They have included new policies, guidance, and training;  efforts to enhance communication about personnel practices; several  enhancements to diversity and inclusion efforts; and the new Workforce  of the Future initiative to strengthen the organizational culture, among  others. However, without a strategy for comprehensively reporting on its  progress across these initiatives, CFPB may miss opportunities to provide  greater transparency and build the employee commitment needed to  sustain progress.
section_title: CFPB Has Strengthened Its Complaints Processes, but Feedback Mechanisms Do Not Fully Address Employees’ Concerns
paragraphs: CFPB has taken steps to improve its management of employee complaint  processes, such as offering new training to managers and addressing  problems with its tracking of complaints, However, our survey indicated  that as of spring 2015, over half of the respondents who reported  experience with at least one of CFPB’s complaint processes had  concerns that could affect employees’ confidence in using the processes.
CFPB has three employee complaint processes that provide employees  the opportunity to have their complaints heard and investigated:
EEO complaints. If a current employee, former employee, or  applicant believes that he or she has been discriminated or retaliated  against on the basis of a protected class or for prior EEO activity, he  or she may file an EEO complaint with the Office of Civil Rights.
Negotiated grievances. CFPB employees covered by the employee  union’s bargaining unit may file a grievance under CFPB’s negotiated  grievance process, as described in the collective bargaining  agreement. The Office of Human Capital is responsible for managing  this process.
Administrative grievances. CFPB employees who are outside of the  bargaining unit may file an administrative grievance under CFPB’s  Open Door and Administrative Grievance Policy. Employees can  initiate this process through the Office of Human Capital.
As discussed earlier, CFPB experienced increases in the filings of EEO  complaints and grievances at a time when its processes for managing  these complaints were relatively new. More recently, in fiscal year 2015,  the total number of formal grievances filed fell to 31 (from 68 in fiscal year  2014) and the total number of formal EEO complaints fell slightly to 22  (from 25 in fiscal year 2014). The total number of informal EEO  complaints (which are prerequisites for formal EEO complaints) declined  from 52 in fiscal year 2014 to 29 for fiscal year 2015, reflecting a 44  percent decrease. CFPB officials told us that one reason grievances  declined is because of a reduction in complaints about ratings because  CFPB has been using a pass-fail system.
In 2014 and 2015, CFPB took steps to strengthen its management of  employee complaints. In 2014, the Office of Civil Rights developed a  more complete operations manual that provides more detailed guidance  to staff to help better ensure that staff process EEO complaints in  compliance with federal EEO laws, regulations, and CFPB policies. The  April 2015 version of the manual is a working draft that CFPB continues  to update, and officials told us they secured contractor support in fiscal  year 2015 to assist in writing standard operating procedures to  supplement the operations manual and further enhance uniformity and  efficiency. CFPB officials also told us that they have added staff to the  Office of Civil Rights, including an attorney with EEOC appellate  experience and a new administrative position (shared with OMWI) and  have authorized positions for a dispute prevention/resolution expert and a  data analyst shared with OMWI. The Office of Civil Rights also has  obtained detailee support from EEOC’s Office of Federal Operation in  2015 and 2016. In September 2015, the Office of Civil Rights requested  and worked with an organizational consultant available to all CFPB offices  to work with staff members to identify opportunities for improvement in  office operations. The Office of Civil Rights and Office of Human Capital  have also taken steps to improve tracking of EEO complaints and  grievances in response to Inspector General recommendations from a  2015 report. CFPB implemented new standard operating procedures for  reconciling the EEO complaints and grievances data. They also said they  have recently awarded a contract to implement a commercial software  tracking and reporting system that is expected to enhance data quality  and reporting.
CFPB has taken steps to encourage informal solutions through greater  use of alternative dispute resolution—an alternative approach to filing a  formal grievance or complaint, such as using mediation to resolve a  dispute or employee complaint. As noted in CFPB’s policy, alternative  dispute resolution can provide faster and less contentious results in  workplace disputes, including claims of discrimination and retaliation. In  addition, according to CFPB’s policy, confidentiality in alternative dispute  resolution proceedings must be maintained by the parties, subject to the  limited exceptions imposed by statute or regulation. CFPB policy states  that alternative dispute resolution can only be used if an employee with a  complaint agrees to it. CFPB makes alternative dispute resolution  available through its EEO program as well as through its negotiated and  administrative grievance policies, and on an ad hoc basis to address any  workplace dispute. CFPB has publicized information about alternative  dispute resolution, such as through its wiki on the bureau’s intranet and  newsletters sent to managers and employees. In addition, in 2015, the  Office of Civil Rights created an in-house training module on Alternative  Dispute Resolution to supplement the EEO training managers and  supervisors receive and to provide to nonsupervisory employees.
While CFPB has made progress in strengthening its management of  complaint processes, employee views collected through our survey and  interviews suggest that many employees with experience with CFPB’s  complaint processes lack confidence and trust in CFPB’s management of  these processes. EEOC officials told us that it is critical that employees  have confidence in the complaint process and agencies should try to  address perceptions, such as beliefs that their complaints will not be  treated appropriately or fairly, which could discourage employees from  using the EEO process. As discussed previously, 33 of the 46 employees  (72 percent) who reported experience with the EEO complaint process  and 55 of 77 employees (71 percent) who reported experience with the  grievance process disagreed that CFPB management made a good faith  effort to resolve complaints informally. As discussed previously, CFPB  has taken steps to encourage and support informal resolution. CFPB  officials also told us that in some cases the remedy the employee is  seeking may require a formal process. For example, if the employee  requests a rating change within 60 days of receiving the rating, the  request may be resolved informally, but if the issue is raised after this  period, the agency may only revise the rating as the result of a complaint  or other formal proceeding that results in a determination or settlement  that the rating must be changed.
Our survey results also suggested that some employees do not trust the  EEO complaint process or grievance process to respect the confidentiality  of their complaint. For example, of the employees who reported  experience with the EEO complaint process, over half (26 of 47)  responded that they did not have confidence that managers and others  with a need to know about specific complaints did not inappropriately  share information with others without a need to know, and 34 of 78  employees had a similar view of the grievance process. Some employees  (16 of 47) also lacked confidence that CFPB’s Office of Civil Rights  maintained confidentiality of their EEO complaint. CFPB officials  acknowledged that respecting confidentiality is key to maintaining  employees’ trust in these processes, and CFPB’s EEO guidance to  supervisors and managers emphasizes the importance of confidentiality.  CFPB officials told us they were aware of a few instances where  information was inadvertently shared beyond a “need to know” basis and  that those staff had been counseled on the importance of protecting the  privacy of employees using the EEO process. In October 2015, the Office  of Civil Rights also invited CFPB privacy experts to a staff meeting to  conduct training that emphasized the importance of protecting personally  identifiable information.
In addition, 23 of the 45 survey respondents who reported experience  with the EEO complaint process disagreed that CFPB’s Office of Civil  Rights is a neutral party in the complaint process and is independent of  CFPB’s Legal division and others in CFPB who may have conflicting or  competing interests. For example, one employee thought that CFPB’s  Legal division, which represents CFPB in EEO complaints, advises the  Office of Civil Rights. CFPB officials told us the Office of Civil Rights  operates independently from the Legal division and has its own legal staff  to conduct legal reviews and research following EEOC guidance for  federal agencies, including, for example, accepting and dismissing formal  complaints for investigation, defining legal claims, and issuing final  agency decisions related to whether or not illegal conduct occurred. The  Office of Civil Rights developed frequently asked questions and added  information to its training modules to explain the office’s neutral role and  its independence from the Legal division and the Office of Human Capital.  The updated training module was included in all new employee  orientation sessions in March 2016.
CFPB’s policies state that the Office of Civil Rights is responsible for  assessing the EEO program and monitoring trends and the Office of  Human Capital is responsible for monitoring the grievances processes.  The Office of Civil Rights has taken some steps to assess employees’  experiences with the process through feedback surveys. Initially, it  developed a short feedback survey for employees who had attended EEO  training or gone through mediation as part of an alternative dispute  resolution process, but officials told us that most employees declined to  complete the feedback surveys. The Office of Civil Rights has drafted a  new survey specifically soliciting feedback about all stages of the EEO  process, including the counseling and investigation stages in addition to  the use of alternative dispute resolution, and has improved the design of  the survey instrument to include a five-level rating scale instead of yes/no  questions. The draft survey includes questions about (1) whether the  parties involved in alternative dispute resolution acted in good faith, (2)  confidence that confidentiality was maintained during the informal  process, (3) fairness of the counseling and investigative processes, and  (4) the fairness and impartiality of EEO counselors and investigators.  CFPB officials told us they plan to roll out the surveys uniformly in  calendar year 2016. They also noted that the Office of Civil Rights has an  open door policy and receives feedback from participants in the EEO  process through informal mechanisms such as e-mails, phone calls, and  office visits. EEOC officials told us that conducting surveys to obtain  feedback and perceptions about the complaint process is a good practice.
The new survey has the potential to provide valuable information that  CFPB can use to improve its EEO complaints process, but it will not  capture the views of employees who used either of the two grievance  processes. CFPB’s Office of Human Capital’s monitoring and evaluation  efforts have not incorporated mechanisms to solicit employee feedback  on experience with the negotiated and administrative grievance  processes. Furthermore, although CFPB includes questions in its annual  employee viewpoint survey about tolerance for prohibited personnel  practices and respect for differences among individuals, this mechanism  is not sufficient for assessing whether employees perceive that they can  use the complaint processes without fear of reprisal. Without a broader  assessment of factors that may be contributing to negative perceptions  and experiences with its complaint processes, CFPB may not succeed in  meeting its goal to be supportive of employees’ use of these processes.
section_title: Conclusions
paragraphs: Since early 2014, when CFPB shared information with employees about  racial disparities in performance ratings, CFPB has undertaken numerous  efforts to improve personnel management and promote a more diverse,  inclusive, and fair workplace. Many of CFPB’s initiatives have been  implemented only recently, and because changing employee perceptions  and behaviors can take time, it is too soon to know the effectiveness of  CFPB’s efforts in these areas. For example, our spring 2015 survey  results indicate that employees in some parts of the bureau and in some  demographic groups continued to have heightened concerns about unfair  treatment, retaliation for raising issues, accountability, and other matters.
Negative perceptions about fairness, trust, and accountability can take  years to address, and it will be important for CFPB to provide ongoing  attention to the effectiveness of its efforts to address these perceptions  and related personnel challenges. While CFPB has developed  mechanisms to measure and communicate progress on its diversity,  inclusion, and culture initiatives, it does not comprehensively report on its  implementation goals and progress across the full range of these  initiatives. As we have previously reported, providing transparency around  results and processes used to achieve results can help an organization to  build and sustain the commitment and momentum needed to ensure that  change initiatives are successful. In particular, because CFPB’s initiatives  have been wide ranging, a more comprehensive and integrated approach  to reporting progress could make it easier for CFPB employees to  understand the status and timeframes for various actions, their intended  results, and CFPB’s progress in achieving these results. In addition, as  bureau leadership and priorities can shift over time, a comprehensive  approach could help to ensure sustained commitment to progress and  accountability among CFPB leaders.
Finally, an important part of ensuring a diverse, inclusive, and fair  workplace is promoting employees’ confidence that they can pursue  resolution of problems through available channels, such as alternative  dispute resolution, the formal EEO process, and the grievance processes.  While CFPB has taken steps to improve its management of complaints— particularly with respect to EEO complaints—our survey results  highlighted concerns among employees who have had experience with  these complaint processes. CFPB is in the process of developing new  tools to collect employees’ feedback on their experiences with the EEO  process, but has not done something similar for the employee grievance  processes. Taking additional steps to understand and remedy factors that  may reduce employee confidence in its complaint processes, such as  implementing tools to collect more comprehensive employee feedback,  will be an important part of CFPB’s ongoing efforts to promote a more  diverse, inclusive, and fair workplace.
section_title: Recommendations for Executive Action
paragraphs: In order to ensure sustained leadership commitment to and accountability  for CFPB’s efforts to promote a diverse, inclusive, and fair workplace, we  recommend that the Director take the following two actions:
Develop and implement a strategy for comprehensively reporting on  the bureau’s implementation goals and progress on its range of  initiatives related to promoting diversity, inclusion, fairness, and a  stronger organizational culture.
In coordination with representatives of CFPB’s employee union,  develop tools to collect more comprehensive employee feedback on  the grievance complaint processes to understand and remedy factors  that may reduce employee confidence in these processes.
section_title: Agency Comments and Our Evaluation
paragraphs: We made copies of this draft report and the accompanying e-supplement  (GAO-16-138SP) available to CFPB for its review and comment.  In its  written comments, reproduced in appendix II, CFPB concurred with our  two recommendations.  CFPB also provided technical comments that  were incorporated, as appropriate.  We also provided an excerpt of the  draft report to EEOC for technical comment.  EEOC did not provide any  comments.
In concurring with our first recommendation to comprehensively report on  its goals and progress on its range of diversity, inclusion, fairness, and  organizational culture initiatives, CFPB cited examples of mechanisms it  currently uses to both track individual initiatives and monitor progress  across its many programs and offices. CFPB noted that consolidating and  augmenting its existing monitoring efforts for these initiatives will provide  a fuller picture of progress and opportunities for efficiency and further  innovation.
In concurring with our second recommendation on feedback tools for the  grievance complaint process, CFPB noted that our survey results on  CFPB employees’ views of CFPB’s complaint processes reflect  responses from a small group of employees and in some cases the  negative views appear to reflect employee misunderstanding. CFPB  noted that this group was smaller because it represented employees  responding to our survey that had experience with one or more of the  complaint processes.  However, our report did not conclude that these  employees’ views were merely due to misunderstandings.  We do not  know if the concerns were based only on misunderstandings or other  reasons.  Furthermore, as we noted in the report, EEOC told us that  negative perceptions need to be addressed so that employees have  confidence in using a complaint process. CFPB agreed that gathering  feedback on its complaint processes could help detect and correct  employee misunderstandings and identify opportunities for process  enhancements.  With respect to negotiated grievances, CFPB said it  plans to work with its employee union to develop feedback mechanisms  that provide it with useful information while respecting the distinct roles  that CFPB management and the union play in that complaint resolution  process.
In its written comments, CFPB highlighted some differences between our  survey results and the results of CFPB’s 2015 annual employee survey.   For example, CFPB suggested that some of GAO’s survey results  contrast with the favorable score (66 percent) and lack of statistically  significant differences among demographic groups on CFPB’s Inclusion  Quotient (an index based on 20 questions from CFPB’s survey).  In  addition, CFPB asserted that strong survey results on certain of its own  survey questions related to prohibited personnel practices contrast with  more negative results on different (but related) questions in our survey of  nonexecutive employees.  We note that differences in wording and topics  between the relevant GAO and CFPB survey items limit the usefulness of  such comparisons.  Furthermore, the Inclusion Quotient CFPB refers to  provides an index of 20 separate survey items, about half of which cover  topics that were not covered in our two surveys.  While noting these  differences in the survey results, CFPB said that our survey results  provide additional data on these issues and that it looks forward to  analyzing them further and incorporating insights drawn from them into its  ongoing work.
On April 12, 2016, CFPB provided via e-mail technical comments on the  draft report that included updated information on various personnel  management efforts, among other comments.  We summarize their most  significant comments and our responses below.
CFPB provided technical comments and supporting documentation  related to additional progress on its efforts discussed in our report’s  third objective.  As appropriate, we made edits to the report to reflect  this new information.  Among other examples, we updated the report’s  discussion to reflect CFPB’s April 2016 announcement of agreement  on a new performance management program, the closure of  additional Inspector General recommendations in March 2016, and  additional steps CFPB has taken in response to Inspector General  recommendations related to succession planning and incorporating  diversity and inclusion into performance competencies for supervisors  and managers.  In addition, we incorporated additional information  about CFPB’s efforts to strengthen its management of employee  complaint processes.
CFPB noted that while our draft report presented selected results from  CFPB’s 2015 annual employee survey, it did not discuss the positive  trends in this survey’s results compared to the prior year.  CFPB  suggested that further discussion of its 2015 employee survey results  would provide a more accurate snapshot of organizational culture at  CFPB.  In presenting CFPB employees’ views on organizational  culture, the primary focus of our report is the results of our own  surveys of CFPB employees.  We conducted our surveys between  April and June 2015, before the administration of CFPB’s 2015 annual  employee survey in July and August 2015.  Where appropriate, our  report provides comparisons to similar questions from CFPB’s own  2015 survey but many of our survey questions were different from  CFPB’s survey questions and therefore are not comparable.   Furthermore, it was beyond the scope of this GAO review to analyze  and draw conclusions about trends in CFPB’s employee survey  results over time (including both positive and negative trends  observed in recent year-over-year comparisons).
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies of this report to CFPB,  interested congressional committees, members, and others.  In addition,  the report will be available at no charge on the GAO website at  http://www.gao.gov.
If you or your staffs have any questions regarding this report, please  contact me at (202) 512-8678 or GarciaDiazD@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 this report are listed in appendix III.
section_title: Appendix I: Objectives, Scope and Methodology
paragraphs: This report examines (1) the Consumer Financial Protection Bureau’s  (CFPB) early efforts as a new agency to establish personnel practices  and organizational culture and challenges it encountered in promoting a  diverse, inclusive, and fair workplace; (2) employees’ views on personnel  management and organizational culture at CFPB; and (3) CFPB’s efforts  to strengthen its personnel management practices and organizational  culture.
To describe CFPB’s early efforts as a new agency to establish personnel  practices and an organizational culture, we reviewed CFPB reports and  documents, and testimony and public statements by CFPB officials. To  describe CFPB’s efforts to grow its workforce and meet statutory and  mission-related goals, we reviewed CFPB’s annual reports to Congress  for fiscal years 2012 through 2014, including reports on the Office of  Human Capital’s efforts to build its workforce and develop its processes  for hiring, training, performance management, and other human capital  functions; the Office of Minority and Women Inclusion’s (OMWI) efforts to  promote diversity and inclusion; and CFPB’s overall progress in delivering  results for consumers. We obtained and analyzed CFPB workforce data  for fiscal years 2011 to 2015 to describe the growth and level of diversity  in CFPB’s workforce. We also reviewed data and documentation related  to CFPB’s initial efforts to identify and address specific personnel  challenges. For example, we reviewed a 2013 report by a management  consulting firm on CFPB’s diversity and inclusion efforts and CFPB’s  internal analysis of disparities in performance ratings by race and other  factors for fiscal year 2013. In addition, to describe trends in the number  and basis of employee complaints, we obtained and analyzed CFPB data  for fiscal years 2011 to 2015 on Equal Employment Opportunity (EEO)  complaints and grievances. To describe employee perspectives on  challenges CFPB faced as a new agency, we reviewed the report by  CFPB’s Office of Minority and Women Inclusion on listening sessions it  held with employees from April through June 2014. We also interviewed  current and former CFPB officials who were employed at CFPB in its first  2 years.
We obtained CFPB employees’ views on personnel management and  organizational culture through interviews with current and former  employees and two web-based surveys:  Interviews. To identify key issues and concerns related to CFPB’s  personnel management practices and organizational culture and to inform  survey development, we provided opportunities for all CFPB employees  to meet or communicate with us individually in a confidential manner. We  set up a GAO toll-free phone number and e-mail address for CFPB  employees to use to arrange a meeting with our team or provide  information. From August 2014 through May 2015, we held one-on-one  interviews with 120 nonsupervisory and supervisory staff.
Surveys. From April through June 2015, we conducted two separate self- administered web-based surveys: one survey of all 1,389 CFPB  employees (nonsupervisors and supervisors below executives) who were  employed as of January 31, 2015, and another survey of 57 senior CFPB  executives. We chose to survey all staff instead of a sample in order to  provide the largest possible number of CFPB employees a chance to  voice their opinions. The nonexecutive survey included questions on (1)  hiring, compensation, and retention; (2) employee opportunities,  development and performance management; (3) employee complaint  processes; (4) leadership, management, and communication; (5) diversity  and inclusion efforts; (6) organizational culture and climate; and (7)  employee demographic information. The separate survey of all CFPB  executives covered the same topic areas, but omitted many questions not  relevant for executives. The full set of questions and results for both  surveys is available as an e-publication supplement to this report,  Consumer Financial Protection Bureau: Survey Results from Employees  and Executives on Personnel Management and Organizational Culture  (GAO-16-138SP, May 2016). Furthermore, we report results for groups of  respondents by race, ethnicity, gender, and age, but we do not attempt to  extrapolate the findings within each of these groups to the broader group.  Survey respondents self-reported their race and ethnicity. Respondents  were able to select more than one race, so it is possible that some  respondents are represented in more than one race and ethnicity group.  In tables where we summarize results by race and ethnicity, we include  results for the group of respondents who chose not to identify their race or  ethnicity. In addition, in tables in this report and the e-supplement, we  exclude results for groups with fewer than 20 respondents.
A total of 863 employees responded to our nonexecutive survey for a  response rate of 62 percent. A total of 36 senior executives responded to  our executive survey for a response rate of 63 percent. For the  nonexecutive survey, we carried out a statistical nonresponse bias  analysis using available administrative data and determined that we could  not assume the nonrespondents were missing at random. We found that  the propensity to respond was statistically correlated with employee age  and the CFPB division an employee worked in. Furthermore, we  observed that responses to questions on the survey also correlated with  employee age. For this reason, the results of the staff survey are  presented as tabulations from a census survey. We do not make any  attempt to extrapolate the findings to the 38 percent of eligible staff who  chose not to complete our survey.
To minimize other types of errors, commonly referred to as nonsampling  errors, and enhance data quality, we employed recognized survey design  practices in the development of the questionnaires and the collection,  processing, and analysis of the survey data. To develop our survey  questions, we drew on information from the one-on-one interviews, prior  GAO-administered personnel management surveys, and the Office of  Personnel Management’s Federal Employment Viewpoint Survey. We  pretested the nonexecutive questionnaire with nine CFPB employees and  the executive questionnaire with three executives. During survey  development, we reviewed the survey to ensure the ordering of survey  sections was appropriate and that questions in each section were clearly  stated and easily comprehended. A GAO survey expert reviewed and  provided feedback on our survey instrument. To reduce nonresponse,  another source of nonsampling error, we undertook an intensive follow-up  effort that included multiple e-mail reminders to encourage CFPB  employees and executives to complete the questionnaire. We minimized  processing errors by having a second independent data analyst conduct  an accuracy check of the computer programs used for data analysis.  Also, having the respondents complete questionnaires online eliminated  errors associated with manual data entry. On the basis of our application  of these practices and follow-up procedures, we determined that the data  were of sufficient quality for our purposes.
In addition to our own surveys and interviews with CFPB employees, we  reviewed CFPB’s annual employee survey results for fiscal years 2013,  2014, and 2015 to obtain additional perspectives from CFPB staff on the  bureau’s personnel management-related issues. In addition, we reviewed  documents and data from the Office of Personnel Management (OPM)  and the Merit Systems Protection Board to provide information about the  views of federal government employees on these issues. We assessed  the reliability of these survey data by reviewing documentation of the  methodology for these surveys and found these survey data to be reliable  for our purposes.
To evaluate CFPB’s efforts to develop and strengthen its personnel  management and organizational culture, we reviewed relevant CFPB  reports, policies, procedures, training programs, planning documents, and  external reviews. We used criteria from applicable federal regulations,  leading practices for diversity and managing organizational change  identified in prior GAO reports, and GAO standards for internal control.  We also interviewed CFPB officials from the OMWI, the Office of Human  Capital, the Legal division, and the Strategy Office. To learn more about  CFPB’s personnel management changes, we reviewed CFPB’s hiring,  promotions, and commissioning policies and procedures and  communications and guides CFPB created to enhance career  development. We reviewed training programs developed for managers  and CFPB’s plans for developing its new performance management  system, including a research firm’s report on the identification and  development of new performance competencies. We also reviewed a  consultant’s review of possible factors contributing to disparities in  performance management ratings under its current system.
To assess CFPB’s efforts to improve diversity and inclusion throughout  the bureau, we reviewed challenges identified in reports by CFPB  summarizing listening sessions with employees, by the Office of the  Inspector General of the Board of Governors of the Federal Reserve  System and the CFPB (Inspector General) and by Deloitte, a  management consulting firm. We assessed CFPB’s efforts to implement  recommendations from these reports by reviewing memorandums from  leadership, employee trainings, and internal documents describing new  employee groups as well as recruitment, strategic planning, and  succession planning efforts. In addition, we interviewed CFPB and  Inspector General staff about the status of CFPB’s efforts to implement  recommendations made by the Inspector General. We analyzed CFPB’s  efforts to track progress related to diversity and inclusion through their  internal analysis of annual employee survey results, management’s  quarterly performance reviews from 2014 through mid-2015, and  documents describing the goals and outcomes of employee groups  associated with the Workforce of the Future initiative. We also discussed  the development of CFPB’s new performance management system and  competencies through interviews with CFPB officials. To assess manager  accountability mechanisms, we examined CFPB’s current competency  models, updated guidance for these models, and interviewed relevant  officials. We also reviewed CFPB’s disciplinary policy.
To assess CFPB’s efforts to strengthen its processes for addressing  employee complaints, we reviewed policies, procedures, and guidance  related to Equal Employment Opportunity complaints and grievances. We  reviewed survey instruments that the Office of Civil Rights uses or plans  to use to obtain feedback from employees using the EEO process. We  also reviewed CFPB’s efforts to improve tracking of EEO complaints and  grievances as recommended by the Inspector General in 2015. We  interviewed officials from the Office of Civil Rights who are responsible for  CFPB’s EEO program and from the Office of Human Capital, which is  responsible for CFPB’s grievance processes. We also interviewed  officials from the Equal Employment Opportunity Commission (EEOC)  about the EEO complaint process and how agencies can evaluate their  program and address negative employee experiences and perceptions.
For the parts of our work that involved the analysis of computer- processed data, we assessed the reliability of these data and found that  they were sufficiently reliable for our purposes. Data sets for which we  conducted data reliability assessments include CFPB data on its  workforce demographics and on employee complaints. To assess the  reliability of these data, we reviewed relevant documentation and  conducted interviews with CFPB staff to review steps they took to collect  and ensure the reliability of the data. In addition, we electronically tested  data fields for missing values, outliers, and obvious errors. We  determined that these data were sufficiently reliable for our purposes.
We conducted this performance audit from September 2014 to May 2016  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.
section_title: Appendix II: Comments from the Consumer Financial Protection Bureau
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Kay Kuhlman (Assistant  Director), John Fisher (Analyst in Charge), Carl Barden, Bethany Benitez,  Lisa Brown, Heather Chartier, Rudy Chatlos, Thomas C. Corless, Kate  Bittinger Eikel, Cathy Hurley, Andrew Kurtzman, Jill Lacey, Ying Long,  Carl Ramirez, Jennifer Schwartz, and Chad Smith made key contributions  to this report.