Human Capital: Senior Executive Performance Management Can Be Significantly Strengthened to Achieve Results
Published: 2004-05-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Congress and the administration have established a new performance-based pay system for members of the Senior Executive Service (SES) that is designed to provide a clear and direct linkage between SES performance and pay. Also, GAO previously reported that significant opportunities exist for agencies to hold the SES accountable for improving organizational results. GAO assessed how well selected agencies are creating linkages between SES performance and organizational success by applying nine key practices GAO previously identified for effective performance management. GAO selected the Department of Education, the Department of Health and Human Services (HHS), and the National Aeronautics and Space Administration (NASA).
section_title: What GAO Found
paragraphs: Senior executives need to lead the way to transform their agencies' cultures to be more results-oriented, customer focused, and collaborative in nature. Performance management systems can help manage and direct this process. While Education, HHS, and NASA have undertaken important and valuable efforts to link their career SES performance management systems to their organizations' success, there are opportunities to use their systems more strategically. For example, as indicated by the executives themselves, the agencies can better use their performance management systems as a tool to manage the organization or to achieve organizational goals. As Congress and the administration are reforming SES pay to better link pay to performance, valid, reliable, and transparent performance management systems with reasonable safeguards are critical. Information on the experiences and knowledge of these agencies should provide valuable insights to other agencies as they seek to drive internal change and achieve external results.

section_title: Letter
paragraphs: High-performing organizations have recognized that effective performance  management systems can help them drive internal change and achieve  external results. Further, such organizations understand that they need  senior leaders who are held accountable for results, drive continuous  improvement, and stimulate and support efforts to integrate human capital  approaches with organizational goals and related transformation issues.  We previously reported that significant opportunities exist to strengthen  agencies’ efforts to hold senior executives accountable for results through  their performance management systems. In particular, more progress is  needed in explicitly linking senior executives’ performance expectations to  contributing to the achievement of results-oriented organizational goals,  fostering the necessary collaboration both within and across organizational  boundaries to achieve results, and demonstrating a commitment to lead  and facilitate change.
Recently, Congress and the administration have sought to modernize senior  executive performance management systems. Congress established a new  performance-based pay system for members of the Senior Executive  Service (SES) that is designed to provide a clear and direct linkage between  SES performance and pay. An agency can raise the pay cap for its senior  executives to $158,100 in 2004, with a senior executive’s total  compensation not to exceed $203,000, if the Office of Personnel  Management (OPM) certifies and the Office of Management and Budget  (OMB) concurs that the agency’s performance management system, as  designed and applied, makes meaningful distinctions based on relative  performance. OPM and OMB are to issue regulations prescribing the  requirements agencies must meet to obtain certification for these  purposes. In a memo to the heads of departments and agencies requesting  their comments on the draft proposed regulations outlining the  certification criteria, the Director of OPM stated that OPM and OMB plan to  fully implement the regulations in time for the fiscal year 2004 performance  ratings and pay adjustments for the senior executives. In addition, as part  of the administration’s President’s Management Agenda, OPM set a goal for  15 percent of the agencies to link performance appraisals for senior  executives to the organization’s mission and goals, and use their senior  executive performance management systems to make meaningful  distinctions and provide consequences based on performance by July 2004.
At your request, this report assesses how well selected agencies are  creating linkages between senior executive performance and  organizational success through their career senior executive performance  management systems. We selected the Department of Education, the  Department of Health and Human Services (HHS), and the National  Aeronautics and Space Administration (NASA) based on several factors,  including mission, size, organizational structure, and use of their  performance management systems for their career senior executives.  Within HHS, we selected the Food and Drug Administration (FDA) and the  Centers for Disease Control and Prevention (CDC) to determine how HHS’s  senior executive performance management system cascades down to these  operating divisions.
To meet this objective, we assessed how these agencies’ career senior  executive performance management systems apply nine key practices for  effective performance management that we previously identified based on  public sector organizations’ experiences both here and abroad. These  practices are as follows. 1. Align individual performance expectations with organizational goals. 2. Connect performance expectations to crosscutting goals. 3. Provide and routinely use performance information to track  organizational priorities. 4. Require follow-up actions to address organizational priorities. 5. Use competencies to provide a fuller assessment of performance. 6. Link pay to individual and organizational performance. 7. Make meaningful distinctions in performance. 8.
Involve employees and stakeholders to gain ownership of performance  management systems. 9. Maintain continuity during transitions.
We found that collectively these key practices create a “line of sight”  showing how unit and individual performance can contribute to overall  organizational goals and helping individuals understand the connection  between their daily activities and the organization’s success.
We analyzed the agencies’ SES performance management systems’ policies  and guidance and other related documents; interviewed cognizant agency  officials; assessed a sample of career senior executives’ individual  performance plans, which outline the performance expectations  executives are to achieve during the year; analyzed aggregate senior  executive performance rating and bonus data; and surveyed all career  senior executives in each agency to gain information on their experiences  and perceptions with regard to their senior executive performance management systems. We assessed the reliability of the senior executive  performance rating and bonus data provided by Education, HHS, NASA,  and OPM and determined that the data were sufficiently reliable for the  purposes of this report. Information on the experiences and progress of the  selected agencies should prove helpful to these agencies as well as provide  valuable insights to other agencies as they seek to use senior executive  performance management systems as a tool to drive internal change and  achieve external results. We are using these practices to inform our internal  senior executive performance management system.
We conducted our work from August 2003 through March 2004 in  accordance with the generally accepted government auditing standards.  Appendix I provides additional information on our scope and methodology.  Appendix II provides the complete survey results for each agency.  Appendix III provides information on selected elements of Education’s,  HHS’s, and NASA’s SES performance management systems.
subsections: section_title: Background
paragraphs: In November 2003, Congress authorized a new performance-based pay  system for members of the SES. According to OPM’s interim regulations,  SES members are to no longer receive annual across-the-board or locality  pay adjustments with the new pay system. Agencies are to base pay  adjustments for SES members on individual performance and  contributions to the agency’s performance by considering such things as  the unique skills, qualifications, or competencies of the individual and their  significance to the agency’s mission and performance, as well as the  individual’s current responsibilities.
Specifically, the revised pay system, which took effect in January 2004,  replaces the six SES pay levels with a single, open-range pay band and  raises the pay cap for all SES members to $145,600 in 2004 (Level III of the  Executive Schedule) with a senior executive’s total compensation not to  exceed $175,700 in 2004 (Level I of the Executive Schedule). If OPM  certifies and OMB concurs that the agency’s performance management  system, as designed and applied, makes meaningful distinctions based on  relative performance, an agency can raise the SES pay cap to $158,100 in  2004 (Level II of the Executive Schedule) with a senior executive’s total  compensation not to exceed $203,000 in 2004 (the total annual  compensation payable to the Vice President).
In an earlier step, to help agencies hold senior executives accountable for  organizational results, OPM amended regulations for senior executive  performance management in October 2000. These amended regulations  governing performance appraisals for senior executives require agencies to  establish performance management systems that (1) hold senior executives  accountable for their individual and organizational performance by linking  performance management with the results-oriented goals of the  Government Performance and Results Act of 1993 (GPRA); (2) evaluate  senior executive performance using measures that balance organizational  results with customer satisfaction, employee perspectives, and any other  measures agencies decide are appropriate; and (3) use performance results  as a basis for pay, awards, and other personnel decisions. Agencies were to  establish these performance management systems by their 2001 senior  executive performance appraisal cycles.
section_title: Performance Management Systems Can Be Used More Strategically by Selected Agencies
paragraphs: High-performing organizations have recognized that their performance  management systems are strategic tools to help them manage on a day-to- day basis and achieve organizational goals. While Education, HHS, and  NASA have undertaken important and valuable efforts to link their career  senior executive performance management systems to their organizations’  success, senior executives’ perceptions indicate that these three agencies  have opportunities to use their career senior executive performance  management systems more strategically to strengthen that link. Based on  our survey of career senior executives, we estimate that generally less than  half of the senior executives at Education, HHS, and NASA feel that their  agencies’ are fully using their performance management systems as a tool  to manage the organization or to achieve organizational goals, as shown in  figure 1.
Further, effective performance management systems are not merely used  for once-or twice-yearly individual expectation setting and rating  processes. These systems facilitate two-way communication throughout  the year so that discussions about individual and organizational  performance are integrated and ongoing. Effective performance  management systems work to achieve three key objectives: (1) they strive  to provide candid and constructive feedback to help individuals maximize  their contribution and potential in understanding and realizing the goals  and objectives of the organization, (2) they seek to provide management  with the objective and fact-based information it needs to reward top  performers, and (3) they provide the necessary information and  documentation to deal with poor performers. In this regard as well,  generally less than half of the senior executives felt that their agencies are  fully using their performance management systems to achieve these  objectives, as shown in figure 2.
section_title: Selected Agencies Can Strengthen the Link between Senior Executive Performance and Organizational Success
paragraphs: High-performing organizations have recognized that a critical success  factor in fostering a results-oriented culture is a performance management  system that creates a “line of sight” showing how unit and individual  performance can contribute to overall organizational goals and helping  them understand the connection between their daily activities and the  organization’s success. Further, our prior work has identified nine key  practices public sector organizations both here and abroad have used that  collectively create this line of sight to develop effective performance  management systems. To this end, while Education, HHS, and NASA have  begun to apply the key practices to develop effective performance  management systems for their career senior executives, they have  opportunities to strengthen the link between their senior executives’  performance and organizations’ success.
subsections: section_title: Align Individual Performance Expectations with Organizational Goals
paragraphs: An explicit alignment of daily activities with broader results is one of the  defining features of effective performance management systems in high- performing organizations. These organizations use their performance  management systems to improve performance by helping individuals see  the connection between their daily activities and organizational goals and  encouraging individuals to focus on their roles and responsibilities to help  achieve these goals. Education, HHS, and NASA require their senior  executives to align individual performance with organizational goals in  order to hold them accountable for organizational results. Our review of  the senior executives’ performance plans showed that all the plans at each  agency identified individual performance expectations that aligned with  organizational goals. In addition, nearly all of the senior executives at each  agency have reported that they communicate their performance  expectations to at least a small extent to those whom they supervise.  Cascading performance expectations in this way helps individuals  understand how they contribute to organizational goals.
Still, while most senior executives at each agency indicated that they see a  connection between their daily activities and organizational goals to a very  great or great extent, fewer of these senior executives felt that their  agency’s SES performance management system holds them accountable for  their contributions to organizational results to a very great or great extent,  as shown in figure 3.
These responses are generally consistent with our governmentwide  surveys on the implementation of GPRA. In particular, governmentwide,  senior executives have consistently reported that they are held accountable  for results. Most recently, we reported in March 2004 that 61 percent of  senior executives governmentwide feel they are held accountable for  achieving their agencies’ strategic goals to a very great or great extent.
To reinforce the accountability for achieving results-oriented goals, we  have reported that more progress is needed in explicitly linking senior  executives' performance expectations to the achievement of these goals.
Setting specific levels of performance that are linked to organizational  goals can help senior executives see how they directly contribute to  organizational results. While most senior executives at HHS have set  specific levels of performance in their individual performance plans, few  senior executives in Education and NASA have identified specific levels.
HHS requires its senior executives to set measurable performance  expectations in their individual performance plans that align with  organizational priorities, such as the department’s “One-HHS” objectives  and strategic goals and their operating divisions’ annual performance goals  or other priorities. We found that about 80 percent of senior executives’  performance plans identified specific levels of performance linked to  organizational goals. For example, a senior executive in CDC set an  expectation to “reduce the percentage of youth (grade 9-12) who smoke to  26.5%,” which contributes to CDC’s annual performance goal to “reduce  cigarette smoking among youth” and the One-HHS program objective to  “emphasize preventive health measures (preventing disease and illness).”  However, specifying levels of performance varies across operating  divisions. We found that approximately 63 percent of senior executives at  FDA versus 80 percent at CDC identified specific levels of performance  linked to organizational goals in their individual performance plans.
Education requires its senior executives to include critical elements, each  with specific performance requirements, in their individual performance  plans that align with the department’s goals and priorities, including the  President’s Management Agenda, the Secretary’s strategic plan, the  Blueprint for Management Excellence, and the Culture of Accountability.  We found that approximately 5 percent of senior executives’ performance  plans identified specific levels of performance linked to organizational  goals.
NASA requires its senior executives to include seven critical elements,  each with specific performance requirements that focus on the  achievement of organizational goals and priorities, in their individual  performance plans. For example, senior executives’ performance plans  include the critical element “meets and advances established agency  program objectives and achieves high-quality results,” and specifically  “meets appropriate GPRA/NASA Strategic Plan goals and objectives.”  Senior executives may modify the performance requirements by making  them more measurable or specific to their jobs; however, only about 23  percent of senior executives added performance requirements that are  specific to their positions in their individual performance plans. Also,  about 1 percent of senior executives have performance expectations with  specific levels of performance that are related to organizational goals in  their individual plans.
section_title: Connect Performance Expectations to Crosscutting Goals
paragraphs: As public sector organizations shift their focus of accountability from  outputs to results, they have recognized that the activities needed to  achieve those results often transcend specific organizational boundaries.  Consequently, organizations that focus on collaboration, interaction, and  teamwork across organizational boundaries are increasingly critical to  achieve results. In a recent GAO forum, participants agreed that delivering  high performance and achieving goals requires agencies to establish  partnerships with a broad range of federal, state, and local government  agencies as well other relevant organizations. High-performing  organizations use their performance management systems to strengthen  accountability for results, specifically by placing greater emphasis on  collaboration to achieve results.
While most senior executives in each agency indicated that they  collaborate with others to achieve crosscutting goals, fewer of these senior  executives felt that their contributions to crosscutting goals are recognized  through their agency’s system, as shown in figure 4.
We reported that more progress is needed to foster the necessary  collaboration both within and across organizational boundaries to achieve  results. As a first step, agencies could have senior executives identify  specific programmatic crosscutting goals that would require collaboration  to achieve in their individual performance plans. As a next step, agencies  could have senior executives name the relevant internal or external  organizations with which they would collaborate to reinforce a focus  across organizational boundaries. HHS, Education, and NASA are  connecting performance expectations to crosscutting goals to varying  degrees.
While HHS does not require executives to identify programmatic  crosscutting goals specific to the individuals in their performance plans,  according to an agency official, it holds all senior executives accountable  for the crosscutting One-HHS program objectives, such as to increase  access to health care. We found that about 67 percent of senior executives’  performance plans identified a programmatic crosscutting goal that would  require collaboration to achieve, as shown in figure 5. The extent to which  the senior executives’ performance plans identified crosscutting goals  varied across operating divisions. For example, 60 percent of the senior  executives’ plans in FDA identified crosscutting goals compared with 50  percent of the plans in CDC. Few HHS senior executives clearly identified  the specific organization(s) either internal or external with which they  would collaborate.
Positive examples of senior executives’ plans at HHS that included  crosscutting goals, as well as either the internal or external organizations  with which they would collaborate to achieve these goals, include the  following:  A senior executive in the National Institutes of Health set an expectation  to work with FDA and other agencies and organizations to accelerate  drug development by specifically working on the National Cancer  Institute/FDA task force to eliminate barriers and speed development.
A senior executive in the Substance Abuse and Mental Health Services  Administration set an expectation to work collaboratively with the  Office of National Drug Control Policy, the Department of Energy, and  the Office of Juvenile Justice and Delinquency Prevention to increase  the use of the National Registry of Effective Programs in other federal  agencies to identify and provide for early intervention for persons with  or who are at risk for mental health or substance abuse problems.
As required by Education, all senior executives’ performance plans  included the general performance expectation: “promotes collaboration  and teamwork, including effective union-management relations, where  appropriate.” However, only about 32 percent of senior executives’  performance plans identified programmatic crosscutting goals on which  they would collaborate and few executives clearly identified the specific  organizations with which they would collaborate, as shown in figure 6.
As required by NASA, all senior executives’ performance plans included a  general expectation: “integrates One-NASA approach to problem-solving,  program/project management, and decision making. Leads by example by  reaching out to other organizations and NASA centers to collaborate on  work products; seeks input and expertise from a broad spectrum .…” This  expectation is designed to contribute to achieving NASA’s mission. Only  about 1 percent of the executives clearly identified specific centers in  NASA and none of the executives clearly identified specific organizations  outside of NASA that they need to collaborate with to achieve crosscutting  goals.
section_title: Provide and Routinely Use Performance Information to Track Organizational Priorities
paragraphs: High-performing organizations provide objective performance information  to executives to show progress in achieving organizational results and  other priorities, such as customer satisfaction and employee perspectives,  and help them manage during the year, identify performance gaps, and  pinpoint improvement opportunities. We reported that disaggregating  performance information in a useful format could help executives track  their performance against organizational goals and compare their  performance to that of the organization.
HHS, NASA, and Education took different approaches to providing  performance information to their senior executives in order to show  progress toward organizational goals or priorities. While all three agencies  give their components the flexibility to collect and provide performance  information to their senior executives, Education also provides  performance information agencywide. Of the senior executives in  Education, HHS, and NASA who reported that their agency provided  performance information to track their work unit’s performance, generally  less than half found the performance information to be useful for making  improvements, available when needed, or both to a very great or great  extent, as shown in figure 7.
Education provides various types of performance information to senior  executives intended to help them see how they are meeting the  performance expectations in their individual performance plans. A tracking  system monitors how Education is making progress toward its annual  performance goals and supporting action steps. Each action step has  milestones that are tracked and reported each month to the officials who  developed and have “ownership” for them. Education also collects  performance information on customer service and employee perspectives.  For example, Education uses an automated performance feedback process,  whereby customers, coworkers, and employees provide feedback at  midcycle and the end of the performance appraisal cycle on how the senior  executives are meeting their individual performance expectations and  areas for improvement.
HHS conducts an annual departmentwide quality of work life survey and  disaggregates the survey results for executives and other employees to use.  HHS compares the overall high or low results of its survey for HHS as a  whole to each operating division and to the component organizations  within operating divisions. In the 2003 survey, HHS added questions about  the President’s Management Agenda, and each operating division had the  opportunity to add specific questions focusing on issues that it believed  were important to its employees, such as flexible work schedules or  knowledge management issues. In addition, HHS gives operating divisions  the flexibility to use other means of collecting and providing performance  information, and in turn, FDA and CDC give their centers and offices the  flexibility to collect and provide performance information. For example,  according to a CDC official, senior executives receive frequent reports,  such as the weekly situation reports, to identify priorities and help  communicate these priorities among senior executives. In addition, CDC  conducts a “pulse check” survey to gather feedback on employees’  satisfaction with the agency and disaggregates the results to the center  level. According to an agency official, CDC plans to conduct this survey  quarterly.
An official at NASA indicated that while NASA does not systematically  provide performance information to its senior executives on a NASA-wide  basis, the centers have the flexibility to collect and provide performance  information to their senior executives on programs’ goals and measures  and customer and employee satisfaction. This official indicated that NASA  uses the results of the OPM Human Capital survey to help identify areas for  improvement throughout NASA and its centers. NASA provides the OPM  Human Capital survey data to its centers, showing NASA-wide and center- specific results, to help centers conduct their own analyses and identify  areas for improvement and best practices.
section_title: Require Follow-up Actions to Address Organizational Priorities
paragraphs: High-performing organizations require individuals to take follow-up actions  based on the performance information available to them. By requiring and  tracking such follow-up actions on performance gaps, these organizations  underscore the importance of holding individuals accountable for making  progress on their priorities. Within Education, only the senior executives  who developed the action steps for the annual performance goals are to  incorporate expectations to demonstrate progress toward the goal(s) in  their individual plans. HHS and NASA do not require senior executives to  take follow-up actions agencywide, but they encourage their components  to have executives take follow-up actions to show progress toward the  organizational priorities. Of the senior executives at each agency who  indicated that they took follow-up actions on areas of improvement,  generally less than two-thirds felt they were recognized through their  performance management systems for such actions, as shown in figure 8.
At Education, senior executives who developed the action steps for  Education’s annual goals are required to set milestones that are tracked  each month using a red, yellow, or green scoring system; assess how they  are progressing toward the action steps and annual goals; and revise future  milestones, if necessary. According to agency officials, these senior  executives are to incorporate these action steps when developing their  individual performance plans. Senior executives are also to address the  feedback that their supervisors provide about their progress in achieving  their performance expectations.
HHS as a whole does not require senior executives to take follow-up  actions, for example, on the quality of work life survey results, or  incorporate the performance information results into their individual  performance plans. In addition, FDA and CDC do not require their senior  executives agencywide to take any type of follow-up actions. However,  FDA centers have the flexibility to require their senior executives to  identify areas for improvement based on the survey results or other types  of performance information. Similarly, CDC encourages its executives to  incorporate relevant performance measures in their individual  performance plans. For example, those senior executives within each CDC  center responsible for issues identified at emerging issues meetings are  required to identify when the issues will be resolved, identify the steps they  will take to resolve the issues in action plans, and give updates at future  meetings with the CDC Director and other senior officials.
NASA does not require its senior executives to take follow-up actions  agencywide on the OPM Human Capital Survey data or other types of  performance information, rather it encourages its centers to have their  executives take follow-up action on any identified areas of improvement.  However, an agency official stated that NASA uses the results of the survey  to identify areas for improvement and that managers are ultimately  accountable for ensuring the implementation of the improvement  initiatives.
section_title: Use Competencies to Provide a Fuller Assessment of Performance
paragraphs: High-performing organizations use competencies to examine individual  contributions to organizational results. Competencies, which define the  skills and supporting behaviors that individuals are expected to  demonstrate to carry out their work effectively, can provide a fuller picture  of individuals’ performance in the different areas in which they are  appraised, such as organizational results, employee perspectives, and  customer satisfaction. We have reported that core competencies applied  organizationwide can help reinforce behaviors and actions that support the  organization’s mission, goals, and values and can provide a consistent  message about how employees are expected to achieve results. Education  and NASA identified competencies that all senior executives in the agency  must include in their performance plans, while HHS gave its operating  divisions the flexibility to have senior executives identify competencies in  their performance plans.
Most of the senior executives in each agency indicated that the  competencies they demonstrate help them contribute to the organization’s  goals to a very great or great extent. However, fewer of these executives  felt that they were recognized through their performance management  system for demonstrating these competencies, as shown in figure 9.
Education requires all senior executives to include a set of competencies in  their individual performance plans. Based on our review of Education’s  senior executives’ performance plans, we found that all of the plans, unless  otherwise noted, included the following examples of competencies.
Organizational results—“sets and meets challenging objectives to  achieve the Department’s strategic goals.”
Employee perspectives—“fosters improved workforce productivity and  effective development and recognition of employees.”
Customer satisfaction—“anticipates and responds to customer needs in  a professional, effective, and timely manner.”
NASA requires all senior executives to include a set of competency-based  critical elements in their individual performance plans. Based on our  review of NASA’s senior executives’ performance plans, we found all of the  plans included the following examples of competencies.
Organizational results—Understands the principles of the President’s  Management Agenda and actively applies them; capitalizes on  opportunities to integrate human capital issues in planning and  performance and to expand e-government and competitive sourcing;  and pursues other opportunities to reduce costs and improve service to  customers.
Employee perspectives—Demonstrates a commitment to equal  opportunity and diversity by proactively implementing programs that  positively impact the workplace and NASA’s external stakeholders and  through voluntary compliance with equal opportunity laws, regulations,  policies, and practices.
Customer satisfaction—Provides the appropriate level of high-quality  support to peers and other organizations to enable the achievement of  the NASA mission; results demonstrate support of One-NASA and that  stakeholder and customer issues were taken into account.
According to an HHS official, the HHS senior executive performance  management system, while not competency based, is becoming more  outcome oriented. However, operating divisions may require senior  executives to include competencies. For example, senior executives in  FDA and CDC include specific competencies related to organizational  results, employee perspectives, and customer satisfaction in their  individual performance plans. Based on our review of HHS’s senior  executives’ performance plans, we found that all of the plans at FDA and  CDC and nearly all across HHS identified competencies that executives are  expected to demonstrate.
Organizational results—About 94 percent of HHS senior executives’  plans identified a competency related to organizational results. For  example, all senior executives’ plans in FDA included a competency to  “demonstrate prudence and the highest ethical standards when  executing fiduciary responsibilities.”
Employee perspectives—About 89 percent of HHS senior executives’  plans identified a competency related to employee perspectives. For  example, senior executives in CDC are required to include a  competency to exercise leadership and management actions that reflect  the principles of workforce diversity in management and operations in  such areas as recruitment and staffing, employee development, and  communications.
Customer satisfaction—About 61 percent of HHS senior executives’  plans identified a competency related to customer satisfaction. For  example, all senior executives’ plans in FDA included a competency to  “lead in a proactive, customer-responsive manner consistent with  agency vision and values, effectively communicating program issues to  external audiences.”
section_title: Link Pay to Individual and Organizational Performance
paragraphs: High-performing organizations seek to create pay, incentive, and reward  systems that clearly link employee knowledge, skills, and contributions to  organizational results. These organizations recognize that valid, reliable,  and transparent performance management systems with reasonable  safeguards for employees are the precondition to such an approach. To this  end, Education’s, HHS’s, and NASA’s performance management systems are  designed to appraise and reward senior executive performance based on  each executive’s achievement toward organizational goals as outlined in  the executive’s performance plan. Overall, the majority of senior executives  at each agency either strongly agreed or agreed that they are rewarded for  accomplishing the performance expectations in their individual  performance plan or helping their agency accomplish its goals, as shown in  figure 10. These responses are similar to those from our governmentwide  survey on the implementation of GPRA. We reported that about half of  senior executives governmentwide perceive to a very great or great extent  that employees in their agencies received positive recognition for helping  their agencies accomplish their strategic goals.
GAO-04-38. safeguards will become especially important under the new performance- based pay system for the SES. Education, HHS, and NASA have built the  following safeguards required by OPM into their senior executive  performance management policies.
Each agency must establish one or more performance review boards  (PRB) to review senior executives’ initial summary performance ratings  and other relevant documents and to make written recommendations to  the agency head on the performance of the agency’s senior executives.  The PRBs are to have members who are appointed by the agency head  in a way that assures consistency, stability, and objectivity in senior  executive performance appraisals. For example, HHS specifically states  that each operating division will have one or more PRBs with members  appointed by the operating division head. HHS’s PRB members may  include all types of federal executives, including noncareer appointees,  military officers, and career appointees from within and outside the  department. In addition, NASA’s PRB is to evaluate the effectiveness of  the senior executive performance management system and report its  findings and any appropriate recommendations for process  improvement or appropriate policy changes to NASA management. For  example, the PRB completed a study on NASA’s senior executive bonus  system in 2003.
A senior executive may provide a written response to his or her initial  summary rating that is provided to the PRB. The PRB is to consider this  written response in recommending an annual summary rating to the  agency head.
A senior executive may ask for a higher-level review of his or her initial  summary rating before the rating is provided to the PRB. The higher- level reviewer cannot change the initial summary rating, but may  recommend a different rating to the PRB that is shared with the senior  executive and the supervisor. Upon receiving the annual summary  rating, senior executives may not appeal their performance appraisals  and ratings.
We have observed that a safeguard for performance management systems  is to ensure reasonable transparency and appropriate accountability  mechanisms in connection with the performance management process.  Agencies can help create transparency in the performance management  process by communicating the overall results of the performance appraisal  cycle to their senior executives. Education, NASA, and HHS officials  indicated that they do not make the aggregate distribution of performance  ratings or bonuses available to their senior executives.
In addition, agencies can communicate the criteria for making  performance-based pay decisions and bonus decisions to their senior  executives to enhance the transparency of the system. Generally, less than  half of the senior executives at each agency reported that they understand  the criteria used to award bonuses to a very great or great extent, and some  senior executives at each agency reported that they do not understand the  criteria at all, as shown in figure 11.
section_title: Make Meaningful Distinctions in Performance
paragraphs: High-performing organizations make meaningful distinctions between  acceptable and outstanding performance of individuals and appropriately  reward those who perform at the highest level. Executive agencies can  reward senior executives’ performance in a number of ways: through  performance awards or bonuses, nominations for Presidential Rank  Awards, or other informal or honorary awards. With the new performance- based pay system for senior executives, agencies are required to have OPM  certify and OMB concur that their performance management systems are  making meaningful distinctions based on relative performance in order to  raise the pay for their senior executives to the highest available level.
Recently, the Director of OPM stated that agencies’ SES performance  management systems should rely on credible and rigorous performance  measurements to make meaningful distinctions based on relative  performance in order for the new SES performance-based pay system to  succeed. She also noted that while a growing number of agencies have  improved in their distributions of SES ratings and awards based on  agencies’ fiscal year 2002 rating and bonus data, these data also suggest  that more work is needed. Specifically, see the following:  Executive branch agencies rated about 75 percent of senior executives  at the highest level their systems permit in their performance ratings in  fiscal year 2002, the most current year for which data are available from  OPM—a decrease from about 84 percent the previous fiscal year.
When disaggregating the data by rating system, approximately 69  percent of senior executives received the highest rating under five-level  systems in fiscal year 2002 compared to about 76 percent in fiscal year  2001, and almost 100 percent of senior executives received the highest  rating under three-level systems in both fiscal years 2001 and 2002.
Approximately 49 percent of senior executives received bonuses in  fiscal year 2002 compared to about 52 percent the previous fiscal year.
At HHS, about 86 percent of senior executives received the highest possible  rating in fiscal year 2003 compared with approximately 99 percent in fiscal  year 2002. While HHS gives its operating divisions the flexibility to appraise  their senior executives’ performance using a three-, four-, or five-level  performance management system, most of HHS’s operating divisions,  including FDA and CDC, rate their senior executives under a three-level  system. Almost all of HHS’s senior executives rated under a three-level  system received the highest rating of “fully successful” in fiscal years 2002  and 2003. Approximately 23 percent of senior executives rated under a  five-level system received the highest rating of “outstanding” in fiscal year  2003 compared with approximately 94 percent in fiscal year 2002.
According to its Chief Human Capital Officer, HHS recognizes that its  rating systems do not always allow for distinctions in senior executives’  performance, and it has chosen to focus on the bonus process as the  method for reflecting performance distinctions. Senior executive bonuses  are to provide a mechanism for distinguishing and rewarding the  contributions of top performers, specifically for circumstances in which  the individual’s work has substantially improved public health and safety or  citizen services. Since the fiscal year 2001 performance appraisal cycle,  HHS has restricted the percentage of senior executives’ bonuses to  generally no more than one-third of each operating division’s senior  executives. HHS, including FDA and CDC, is making progress toward  distinguishing senior executive performance through bonuses compared to  the percentage of senior executives governmentwide who received  bonuses, as shown in table 1.
Additionally, HHS generally limited individual bonus amounts to no more  than 12 percent of base pay for top performers in fiscal year 2003. Most of  the senior executives who received a bonus were awarded less than a 10  percent bonus in fiscal year 2003, as shown in table 2.
Lastly, senior executive responses to our survey indicated that they did not  feel HHS was making meaningful distinctions in ratings or bonuses to a  very great or great extent. Approximately 31 percent of senior executives  felt that their agency makes meaningful distinctions in performance using  ratings; approximately 38 percent felt that their agency makes meaningful  distinctions in performance using bonuses.
NASA uses a five-level system to appraise senior executive performance.  More than three-fourths of the senior executives received the highest rating  of “outstanding” for the 2003 performance appraisal cycle (July 2002–June  2003), as shown in figure 12. The distribution of senior executives across  the rating levels was similar to the previous performance appraisal cycle.
NASA’s senior executive bonus recommendations are to be based solely on  exceptional performance as specified and documented in senior  executives’ performance plans. While NASA established a fixed allocation  of bonuses for its organizations based on the total number of senior  executives, an organization can request an increase to its allocation. Sixty  percent of eligible senior executives within the organization’s bonus  allocation may be recommended for bonuses larger than 5 percent of base  pay.
For the 2003 appraisal cycle, the percentage of senior executives who  received bonuses increased from the previous year, as shown in table 3. An  agency official indicated that this increase resulted from a study NASA’s  PRB conducted on the senior executive bonus system. The PRB reviewed  NASA’s bonus system in the context of OPM’s data on senior executive  bonuses across federal agencies and recommended that NASA revise its  bonus system to move NASA into the upper half of the number and average  amount of bonuses given across federal agencies. According to the PRB  study, NASA made this change to meet its management’s need to reward  more senior executives while recognizing that bonus decisions must be  based on performance.
During NASA’s 2003 appraisal cycle, the Space Shuttle Columbia accident  happened. We reviewed the aggregate senior executive performance rating  and bonus data for that cycle; however, we did not analyze individual  senior executives’ performance appraisals or bonus recommendations or  determine if those who received ratings of outstanding, bonuses, or both  were involved with the Columbia mission.
Lastly, senior executive responses to our survey indicated that about half of  the executives felt NASA was making meaningful distinctions in ratings or  bonuses to a very great or great extent. Approximately 46 percent of senior  executives felt that their agency makes meaningful distinctions in  performance using ratings; approximately 48 percent felt that their agency  makes meaningful distinctions in performance using bonuses.
Education uses a three-level rating system. About 98 percent of senior  executives received the highest rating of “successful” in the 2003  performance appraisal cycle (July 2002–June 2003), a slight decrease from  the previous performance appraisal cycle when all senior executives  received this rating. Education’s senior executive bonus recommendations  are to be based on senior executives’ demonstrated results and  accomplishments toward the department’s strategic goals and  organizational priorities. About 63 percent of senior executives received  bonuses in the 2003 appraisal cycle, compared to approximately 60 percent  in the previous appraisal cycle. The majority of the senior executives who  received bonuses were awarded 5 percent bonuses in the 2003 appraisal  cycle, as shown in table 4.
Lastly, senior executive responses to our survey indicated that they did not  feel Education was making meaningful distinctions in ratings or bonuses to  a very great or great extent. Specifically, about 10 percent of senior  executives felt that their agency makes meaningful distinctions in  performance using ratings; about 33 percent felt that their agency makes  meaningful distinctions in performance using bonuses.
section_title: Involve Employees and Stakeholders to Gain Ownership of Performance Management Systems
paragraphs: High-performing organizations have found that actively involving  employees and stakeholders when developing or refining results-oriented  performance management systems helps improve employees’ confidence  and belief in the fairness of the system and increase their understanding  and ownership of organizational goals and objectives. Further, to maximize  the effectiveness of their performance management systems these  organizations recognize that they must conduct frequent training for staff  members at all levels of the organization.
Generally, at Education, HHS, and NASA senior executives became  involved in refining the performance management system or participated in  formal training on those systems when provided the opportunities. Of the  senior executives at each agency who reported that they have been given  the opportunity to be involved in refining their agency’s performance  management system to at least a small extent, most of these senior  executives said they took advantage of this opportunity, as shown in figure  13.
Similarly, while less than three-fourths of the senior executives at each  agency said formal training on their agency’s performance management  system is available to them, most of these senior executives said they  participated in the training, as shown in figure 14.
At all three agencies, a proportion of senior executives reported that they  had no opportunity to become involved with or trained on their  performance management systems. At HHS, about 38 percent of senior  executives said they did not have the opportunity to be involved in refining  their agency’s system, while about 24 percent of senior executives said  formal training on their agency’s system was not available to them, as  shown in figure 15.
According to an HHS official, the Office of the Secretary developed the  One-HHS objectives, the basis of its senior executive performance  management system, with input from the leadership of all HHS staff offices  and operating divisions. This official indicated that HHS conducted  extensive interviews to develop and validate the goals. All career senior  executives were briefed on the goals and offered training on development  of outcome-oriented individual performance objectives derived from those  goals. The agency official said that the operating divisions had the  flexibility to involve their senior executives in customizing the new  individual performance plans for their operating divisions.
According to HHS’s guidance, the operating divisions are to develop and  provide training on the performance management system to their senior  executives on areas such as developing performance plans, conducting  progress reviews, writing appraisals, and using appraisals as a key factor in  making other management decisions. For example, according to an FDA  official, the Human Resources Director briefed all of the senior executive  directors on how to cascade the FDA Commissioner’s performance plan  into their fiscal year 2002 individual plans and incorporate the One-HHS  objectives. FDA does not provide regular training to the senior executives  on the performance management system; rather the training is provided as  needed and usually on a one-on-one basis when a new senior executive  joins FDA. The agency official also stated that because few senior  executives are joining the agency, regular training on the system is not as  necessary.
About half of NASA’s senior executives reported that they did not have the  opportunity to be involved in refining their agency’s system, while about 21  percent of senior executives said formal training on their agency’s system  was not available to them, as shown in figure 16.
According to an agency official, the NASA Administrator worked with the  top senior executives to develop a common set of senior executive critical  elements and performance requirements that reflect his priorities and are  central to ensuring a healthy and effective organization. The Administrator  then instructed the senior executives to review the common critical  elements and incorporate them into their individual performance plans.  When incorporating the elements into their individual plans, the senior  executives have the opportunity to modify the performance requirements  for each element to more clearly reflect their roles and responsibilities.
According to NASA’s guidance, the centers and offices are to provide  training and information on the performance management system to their  senior executives. In addition, an official at NASA said that most centers  and offices provide training to new senior executives on aspects of the  performance management system, such as developing individual  performance plans. Also, NASA provides training courses for all employees  on specific aspects of performance management, such as writing  performance appraisals and self-assessments.
Approximately half of Education’s senior executives reported that they did  not have the opportunity to be involved in refining their agency’s system,  while about one-fourth of the senior executives reported that formal  training on their agency’s system was not available to them, as shown in  figure 17.
An official at Education indicated that senior executives have the  opportunity to comment on changes proposed to the performance  management system by the Executive Resources Board. In addition,  according to Education’s guidance, training for all senior executives on the  performance management system is to be provided periodically. An agency  official said that Education provided training for all managers, including  senior executives, on how to conduct performance appraisals and write  performance expectations near the end of the performance appraisal cycle  last year.
section_title: Maintain Continuity during Transitions
paragraphs: The experience of successful cultural transformations in large public and  private organizations suggests that it can often take 5 to 7 years until such  initiatives are fully implemented and cultures are transformed in a  substantial manner. We reported that among the key practices consistently  found at the center of successful transformations is to use the performance  management system to define responsibility and assure accountability for  change. The average tenure of political leadership can have critical  implications for the success of those initiatives. Specifically, in the federal  government the frequent turnover of the political leadership has often  made it difficult to obtain the sustained and inspired attention required to  make needed changes. We reported that the average tenure of political  appointees governmentwide for the period 1990–2001 was just under 3  years.
Performance management systems help provide continuity during these  times of transition by maintaining a consistent focus on a set of broad  programmatic priorities. Individual performance plans can be used to  clearly and concisely outline top leadership priorities during a given year  and thereby serve as a convenient vehicle for new leadership to identify  and maintain focus on the most pressing issues confronting the  organization as it transforms. We have observed that a specific  performance expectation in senior executives’ performance plans to lead  and facilitate change during transitions could be critical as organizations  transform themselves to succeed in an environment that is more results  oriented, less hierarchical, and more integrated.
While many senior executives at each agency reported that their agency’s  senior executive performance management system helped to maintain a  consistent focus on organizational goals during transitions, the majority of  senior executives felt this occurred to a moderate extent or less, as shown  in figure 18.
According to an agency official, HHS as a whole struggles with transitions  between secretaries as with each change in leadership comes a change in  initiatives. Approximately 25 percent of HHS senior executives’ plans  identified performance expectations related to leading and facilitating  change in the organization. For example, several senior executives’ plans  identified actions the executives were going to take in terms of succession  planning and leadership development for their organizations. Specifically, a  senior executive in the National Institutes of Health set the expectation to  develop a workforce plan that supports the future needs of the office,  including addressing such things as succession and transition planning.  About 33 percent of senior executives’ plans in FDA and 15 percent in CDC  identified performance expectations related to leading and facilitating  change. To help address this issue of continuity in leadership and  transitions, HHS identified as part of its One-HHS objectives a goal to  “implement strategic workforce plans that improve recruitment, retention,  hiring and leadership succession results for mission critical positions.”
Education requires all senior executives to include a general performance  expectation in their performance plans related to change: “initiates new  and better ways of doing things; creates real and positive change.”  Approximately 98 percent of the senior executives’ plans included this  expectation.
Almost none of the NASA senior executives’ performance plans identified  an expectation related to leading and facilitating change during transitions.  An agency official indicated that while NASA did not set a specific  expectation for senior executives to include in their individual  performance plans, leading and facilitating change is addressed through  several of the critical elements. For example, for the “Health of NASA”  critical element, senior executives are to demonstrate actions that  contribute to safe and successful mission accomplishment and facilitate  knowledge sharing within and between programs and projects. We have  reported that NASA recognizes the importance of change management  through its response to the Columbia Accident Investigation Board’s  findings. NASA indicated that it would increase its focus on the human  element of change management and organizational development, among  other things, to improve the agency’s culture.
section_title: Conclusions
paragraphs: Senior executives need to lead the way for federal agencies to transform  their cultures to be more results oriented, customer focused, and  collaborative in nature to meet the challenges of the 21st century.  Performance management systems can help manage and direct this  transformation process. Education, HHS, and NASA have undertaken  important and valuable efforts, but these agencies need to continue to  make substantial progress in using their senior executive performance  management systems to strengthen the linkage between senior executive  performance and organizational success through the key practices for  effective performance management.
Consistent with our findings and OPM’s reviews across the executive  branch, these agencies must use their career senior executive performance  management systems as strategic tools. In addition, as the administration is  about to implement a performance-based pay system for the SES, valid,  reliable, and transparent performance management systems with  reasonable safeguards are critical. The experiences and progress of  Education, HHS, and NASA should prove helpful to those agencies as well  as provide valuable information to other agencies as they seek to use senior  executive performance management as a tool to drive internal change and  achieve external results.
section_title: Recommendations for Executive Action
paragraphs: Overall, we recommend that the Secretaries of Education and HHS and the  Administrator of NASA continue to build their career senior executive  performance management systems along the nine key practices for  effective performance management. Specifically, we recommend the  following.
The Secretary of Education should reinforce these key practices by taking  the following seven actions:   Require senior executives to set specific levels of performance that are  linked to organizational goals to help them see how they directly  contribute to organizational goals.
Require senior executives to identify in their individual performance  plans programmatic crosscutting goals that would require collaboration  to achieve and clearly identify the relevant internal or external  organizations with which they would collaborate to achieve these goals.
Provide disaggregated performance information from various sources to  help facilitate senior executive decision making and progress in  achieving organizational results, customer satisfaction, and employee  perspectives.
Require senior executives to take follow-up actions based on the  performance information available to them in order to make  programmatic improvements, and formally recognize executives for  these actions.
Build in additional safeguards when linking pay to performance by  communicating the overall results of the performance management  decisions.
Make meaningful distinctions in senior executive performance through  both ratings and bonuses.
Involve senior executives in future refinements to the performance  management system and offer training on the system, as appropriate.
The Secretary of HHS should reinforce these key practices by taking the  following seven actions:   Require senior executives to clearly identify in their individual  performance plans the relevant internal or external organizations with  which they would collaborate to achieve programmatic crosscutting  goals.
Provide disaggregated performance information from various sources to  help facilitate senior executive decision making and progress in  achieving organizational results, customer satisfaction, and employee  perspectives.
Require senior executives to take follow-up actions based on the  performance information available to them in order to make  programmatic improvements, and formally recognize executives for  these actions.
Build in additional safeguards when linking pay to performance by  communicating the overall results of the performance management  decisions.
Make meaningful distinctions in senior executive performance through  ratings.
Involve senior executives in future refinements to the performance  management system and offer training on the system, as appropriate.
Set specific performance expectations for senior executives related to  leading and facilitating change management initiatives during ongoing  transitions throughout the organization that executives should include  in their individual performance plans.
The Administrator of NASA should reinforce these key practices by taking  the following eight actions:   Require senior executives to set specific levels of performance that are  linked to organizational goals to help them see how they directly  contribute to organizational goals.
Require senior executives to identify in their individual performance  plans programmatic crosscutting goals that would require collaboration  to achieve and clearly identify the relevant internal or external  organizations with which they would collaborate to achieve these goals.
Provide disaggregated performance information from various sources to  help facilitate senior executive decision making and progress in  achieving organizational results, customer satisfaction, and employee  perspectives.
Require senior executives to take follow-up actions based on the  performance information available to them in order to make  programmatic improvements, and formally recognize executives for  these actions.
Build in additional safeguards when linking pay to performance by  communicating the overall results of the performance management  decisions.
Make meaningful distinctions in senior executive performance through  both ratings and bonuses.
Involve senior executives in future refinements to the performance  management system and offer training on the system, as appropriate.
Set specific performance expectations for senior executives related to  leading and facilitating change management initiatives during ongoing  transitions throughout the organization that executives should include  in their individual performance plans.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretaries of Education and HHS  and the Administrator of NASA for their review and comment. We also  provided a draft of the report to the Directors of OPM and OMB for their  information. We received written comments from Education, HHS, and  NASA, which are presented in appendixes IV, V, and VI. NASA’s Deputy  Administrator stated that the draft report is generally positive and that  NASA concurred with all the recommendations and plans to implement  them in its next SES appraisal cycle beginning July 1, 2004. HHS’s Acting  Principal Deputy Inspector General stated that HHS had no comments  upon review of the draft report.
In responding to our recommendations, Education’s Assistant Secretary for  Management and Chief Information Officer stated that Education plans to  revise its existing senior executive performance management system  dramatically given OPM’s draft regulations for the new SES pay for  performance system and described specific actions Education plans to  take. These actions are generally consistent with our recommendations  and their successful completion will be important to achieving the intent of  our recommendations.
However, Education stated that it does not plan to require the specific  identification of the internal/external organizations with which the  executives collaborate, as we recommended. We disagree that Education  does not need to implement this recommendation. Education is taking  important steps by requiring senior executives to include a general  performance expectation related to collaboration and teamwork in their  individual performance plans, but placing greater emphasis on this  expectation is especially important for Education. We reported that  Education will have to help states and school districts meet the goals of  congressional actions such as the No Child Left Behind Act.  Consequently, Education should require senior executives to identify the  crosscutting goals and relevant organizations with which they would  collaborate to achieve them in order to help reinforce the necessary focus  on results.
Lastly, Education stated that it has fully implemented our recommendation  for providing senior executives disaggregated performance information  from various sources to help facilitate decision making and progress in  achieving organizational priorities. We disagree that Education has fully  implemented this recommendation. While we recognize Education’s two  sources of agencywide performance information for its senior executives,  we also reported that only about one-third of the senior executives who  reported that the agency provided performance information felt that the  performance information was useful for making improvements and  available when needed to a very great or great extent. Consequently,  Education should provide all of its senior executives performance  information from various sources that is disaggregated in a useful format to  help them track their progress toward achieving organizational results and  other priorities, such as customer satisfaction and employee perspectives.
As agreed with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days after its  date. At that time, we will provide copies of this report to other interested  congressional parties, the Secretaries of Education and HHS, the  Administrator of NASA, and the Directors of OPM and OMB. We will also  make this report available at no charge on the GAO Web site at  http://www.gao.gov.
If you have any questions about this report, please contact me or Lisa  Shames on (202) 512-6806 or at mihmj@gao.gov or shamesl@gao.gov. Other  contributors are acknowledged in appendix VII.
section_title: Objective, Scope, and Methodology
paragraphs: To meet our objective to assess how well selected agencies are creating  linkages between senior executive performance and organizational success  through their performance management systems, we applied the key  practices we previously identified for effective performance management.  We focused on agencies’ career Senior Executive Service (SES) members,  rather than all senior-level officials, because the Office of Personnel  Management (OPM) collects data on senior executives across the  government. In addition, career senior executives are common to all three  of the selected agencies and typically manage programs and supervise  staff.
We selected the Department of Education, the Department of Health and  Human Services (HHS), and the National Aeronautics and Space  Administration (NASA) for our review to reflect variations in mission, size,  organizational structure, and use of their performance management  systems for career senior executives. Within HHS, we selected two of the  operating divisions—the Food and Drug Administration (FDA) and the  Centers for Disease Control and Prevention (CDC)—to determine how  HHS’s SES performance management system cascades down to the  operating division level. We selected these two operating divisions after  reviewing HHS’s strategic plan and its operating divisions’ annual  performance plans to identify two agencies that contributed to the same  HHS strategic goal(s) through their annual performance goals. We then  reviewed the SES population data from OPM’s Central Personal Data File  to verify that the two operating divisions each had a relatively large number  of senior executives.
subsections: section_title: Analyzed Agency Documents and Bonus and Rating Data, and Interviewed Cognizant Agency Officials
paragraphs: We collected and analyzed each agency’s senior executive performance  management system policy manual; personnel policies and memorandums;  strategic plan and annual performance plan; employee and customer  satisfaction survey instruments and analyses, as appropriate; and aggregate  trend data for senior executive performance ratings and bonus  distributions. In addition, we reviewed OPM’s draft proposed regulations  prescribing the criteria agencies must meet to obtain certification of their  systems, which OPM provided for review and comment to the heads of  departments and agencies, including GAO, on April 28, 2004.
We also assessed the reliability of the senior executive performance rating  and bonus data provided by Education, HHS, NASA, and OPM to ensure  that the data we used for this report were complete and accurate by   (1) performing manual and electronic testing of required data elements;   (2) comparing the data to published OPM data, when applicable; and   (3) interviewing agency officials knowledgeable about the data. We  determined that the data provided by the agencies and OPM were  sufficiently reliable for the purposes of this report.
We also interviewed the chief human capital officers at Education and HHS  as well as officials at all three agencies responsible for managing human  capital; implementing the strategic and annual performance plans; and  administering agencywide employee and customer satisfaction surveys, as  appropriate, and other agency officials identified as having a particular  knowledge about issues related to senior executive performance  management. In addition, we met with the President of the Senior  Executives Association to obtain her thoughts on the new SES  performance-based pay structure and performance management in general.
section_title: Assessed a Sample of Career SES Individual Performance Plans
paragraphs: We assessed a probability sample of SES individual performance plans at  HHS and NASA and all the SES plans at Education using a data collection  instrument we prepared in order to identify how senior executives were  addressing certain practices—aligning individual performance  expectations with organizational goals, connecting performance  expectations to crosscutting goals, using competencies, and maintaining  continuity during transitions—through their individual performance plans.
To randomly select the plans, we collected a list of all current career senior  executives as of August/September 2003 from each agency. Since HHS’s  operating divisions develop their own SES performance plans and  implement their performance management systems, we drew the sample  such that it would include each operating division and be representative of  all of HHS. In addition to the stratified sample for HHS overall, we reviewed  all senior executives plans at FDA and CDC to ensure that estimates could  be produced for these operating divisions. For all three agencies, we  reviewed the individual performance plans most recently collected by the  human resources offices. We reviewed plans from the performance  appraisal cycle for HHS covering fiscal year 2003, for Education covering  July 2002–June 2003, and for NASA covering July 2003–June 2004.
subsections: section_title: Sample Design
paragraphs: We selected and reviewed all senior executives’ individual performance  plans from Education, a simple random sample from NASA, and a stratified  sample from HHS. The sample of SES performance plans allowed us to  estimate characteristics of these plans for each of these three agencies. For  each agency, the SES population size, number of SES plans in sample, and  number of plans reviewed are shown in table 5.
We excluded out of scope cases from our population and sample, which  included senior executives who had retired or resigned, were not career  senior executives, or did not have individual performance plans because  they were either new executives or on detail to another agency. For HHS,  excluding CDC and FDA, we do not know the number of out of scope SES  plans in the entire senior executive population; however, there were seven  out of scope SES plans in our sample of performance plans. For this review,  we only estimate to the population of in scope SES plans.
section_title: Estimation and Sampling Error
paragraphs: All population estimates based on this plan review are for the target  population defined as SES performance plans for the most recent year  available from each of the three agencies. For Education, we report actual  numbers for our review of individual performance plans since we reviewed  all the plans. For HHS and NASA, we produced estimates to the population  of all SES performance plans in those agencies for the relevant year.  Estimates are produced using appropriate methods for simple random  sampling for NASA and for stratified random sampling for HHS. For NASA  and for each stratum for HHS, we formed estimates by weighting the data  by the ratio of the population size to the number of plans reviewed. For  NASA, we considered the 81 plans obtained and reviewed to be a  probability sample.
The HHS and NASA performance plan samples are subject to sampling  error. There was no sampling error for the census review of senior  executives’ performance plans for FDA, CDC, and Education. The effects  of sampling errors, due to the selection of a sample from a larger  population, can be expressed as confidence intervals based on statistical  theory. Sampling errors occur because we use a sample to draw  conclusions about a larger population. As a result, the sample was only one  of a large number of samples of performance plans that might have been  drawn. If different samples had been taken, the results might have been  different. To recognize the possibility that other samples might have  yielded other results, we express our confidence in the precision of our  particular sample’s results as a 95 percent confidence interval.
The 95 percent confidence intervals are expected to include the actual  results for 95 percent of samples of this type. We calculated confidence  intervals for this sample using methods that are appropriate for the sample  design used. For HHS estimates in this report, we are 95 percent confident  that when sampling error is considered, the results we obtained are within  +9 percentage points of what we would have obtained if we had reviewed  the plans of the entire study population, unless otherwise noted. For NASA,  the 95 percent confidence intervals for percentage estimates are no wider  than +6 percentage points, unless otherwise noted.
section_title: Surveyed All Career SES at Each Agency
paragraphs: We administered a Web-based questionnaire to the study population of all  career senior executives at Education, HHS, and NASA to obtain  information on their experiences with and perceptions of their  performance management systems. We collected a list of all career senior  executives and e-mail addresses from each agency as of August/September  2003 to identify the respondents for our survey. We structured the  questionnaire around the key practices we identified for effective  performance management and included some questions about senior  executives’ overall perceptions of their performance management systems.  The questions were nearly identical across the agencies, though some  introductory language and terminology varied. The complete questionnaire  and results are shown in appendix II.
Although all senior executives were sampled, in the implementation of the  survey, we found that some executives were out of scope because they  retired or resigned, were not career senior executives, or otherwise did not  respond. Table 6 contains a summary of the survey disposition for the  surveyed cases at the three agencies.
Table 7 summarizes why individuals originally included in the target  population by each agency were removed from the sample.
For Education, we surveyed a total of 57 career senior executives and  received completed questionnaires from 41 senior executives for a  response rate of 72 percent. For HHS, we surveyed a total of 317 career  senior executives and received completed questionnaires from 213 senior  executives for a response rate of 67 percent. For NASA, we surveyed a total  of 393 career senior executives and received completed questionnaires  from 260 senior executives for a response rate of 66 percent.
subsections: section_title: Estimation and Sampling Error
paragraphs: We obtained responses from across Education and from all subentities  within HHS and NASA and had no reason to expect that the views of  nonrespondents might be different from the respondents. Consequently,  our analysis of the survey data treats the respondents as a simple random  sample of the populations of senior executives at each of the three  agencies.
We also reviewed whether senior executives who have served less than 1  year at an agency tended to respond differently than those with more than 1  year of experience. We did find some differences on certain questions for  which individuals who served as senior executives for less than 1 year were  more likely to answer “no basis to judge/not applicable” and noted these  differences in the report. The estimated percentage of the senior  executives responding “no basis to judge/not applicable” to questions  ranged from 0 to 24 percent. Since this range is relatively wide, we have  reported “no basis to judge/not applicable” as a separate response category  for each question in appendix II.
The particular sample of senior executives (those who responded to the  survey) we obtained from each agency was only one of a large number of  such samples of senior executives that we might have obtained. Each of  these different samples might have produced slightly different results. To  recognize the possibility that other samples might have yielded other  results, we express our confidence in the precision of our particular  sample’s results as a 95 percent confidence interval. For Education, unless  otherwise noted, the survey responses have a margin of error within ± 9  percent with a 95 percent level of confidence. For HHS and NASA, unless  otherwise noted, the survey responses have a margin of error within ± 4  percent with a 95 percent level of confidence.
section_title: Nonsampling Error
paragraphs: In addition to sampling error, other potential sources of errors associated  with surveys, such as question misinterpretation, may be present.
Nonresponse may also be a source of nonsampling error. We took several  steps to reduce these other sources of error.
We conducted pretests of the questionnaire both with appropriate senior  executives in GAO and senior executives in the three agencies surveyed to  ensure that the questionnaire (1) was clear and unambiguous, (2) did not  place undue burden on individuals completing it, and (3) was independent  and unbiased. We pretested a paper copy of the survey with three senior  executives in GAO who did not work in the human capital area. We then  had a human resources professional with each agency review the survey  for agency-specific content and language. We conducted six pretests  overall with senior executives in the audited agencies—one at Education,  three at HHS, and two at NASA. The first four were conducted using a  paper version of the questionnaire and the final two were conducted using  the Web version.
To increase the response rate for each agency, we sent a reminder e-mail  about the survey to those senior executives who did not complete the  survey in the initial time frame and conducted follow-up telephone calls to  persons who had not completed the survey following the reminder e-mail.  The HHS and NASA surveys were available from October 22, 2003, through  January 16, 2004, and the Education survey was available from   November 3, 2003, through January 16, 2004.
We performed our work in Washington, D.C., from August 2003 through  March 2004 in accordance with generally accepted government auditing  standards.
section_title: GAO Senior Executive Survey Data from Education, HHS, and NASA
paragraphs: We administered a Web-based questionnaire to the study population of all  career senior executives at Education, HHS, and NASA to obtain  information on their experiences with and perceptions of their  performance management systems. We structured the questionnaire  around key practices we identified for effective performance management.  The response rates and margins of error for each agency are as follows.
For Education, we surveyed a total of 57 career senior executives and  received completed questionnaires from 41 senior executives for a  response rate of 72 percent. Unless otherwise noted, the survey  responses have a margin of error within ± 9 percent with a 95 percent  level of confidence.
For HHS, we surveyed a total of 317 career senior executives and  received completed questionnaires from 213 senior executives for a  response rate of 67 percent. Unless otherwise noted, the survey  responses have a margin of error within ± 4 percent with a 95 percent  level of confidence.
For NASA, we surveyed a total of 393 career senior executives and  received completed questionnaires from 260 senior executives for a  response rate of 66 percent. Unless otherwise noted, the survey  responses have a margin of error within ± 4 percent with a 95 percent  level of confidence.
The information below shows the senior executives’ responses for each  question by agency.
subsections: section_title: 1. Align individual performance expectations with organizational goals.
paragraphs: You see a connection between your daily activities and the achievement of organizational goals.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
You communicate your performance expectations to the individuals who report to you to help them understand how they can contribute to  organizational goals.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
You see a connection between your daily activities and HHS's priorities.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
section_title: 2. Connect performance expectations to crosscutting goals.
paragraphs: You collaborate with others to achieve crosscutting goals.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
You identify strategies for collaborating with others to achieve crosscutting goals.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
You are recognized through your performance management system for contributing to crosscutting goals.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Do you collaborate with other offices within Education to achieve crosscutting goals?
Does not apply  given my current  position. (percent) 5 Do you collaborate with other agencies or organizations outside of Education to achieve crosscutting goals?
Does not apply given  my current position.  (percent)
Do you collaborate with other operating divisions within HHS to achieve crosscutting goals?
Does not apply  given my current  position. (percent)
Do you collaborate with other agencies or organizations outside of HHS to achieve crosscutting goals?
Does not apply  given my current  position. (percent)
Do you collaborate with other centers within NASA to achieve crosscutting goals?
Does not apply  given my current  position. (percent)
Do you collaborate with other agencies or organizations outside of NASA to achieve crosscutting goals?
section_title: 3. Provide and routinely use performance information to track organizational priorities.
paragraphs: Your agency formally provides performance information that allows you to track your work unit's performance.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Your agency formally provides performance information that allows you to compare the performance of your work unit to that of other work  units.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Your agency formally provides performance information that allows you to compare the performance of your work unit to that of your  agency.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
Your agency formally provides performance information that is available to you when you need it.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Your agency formally provides performance information that is useful for making improvements in your work unit's performance.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
section_title: 4. Require follow-up actions to address organizational priorities.
paragraphs: You identified areas for improvement based on performance information formally provided by your agency.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
You took action on any identified areas of improvement.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
You documented areas for improvement in your individual performance plan.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
You are recognized through your performance management system for taking follow-up actions.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
section_title: 5. Use competencies to provide a fuller assessment of performance.
paragraphs: The competencies you demonstrate help you contribute to the organization's goals.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
You are recognized through your performance management system for your demonstration of the competencies.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
section_title: 6. Link pay to individual and organizational performance.
paragraphs: I am rewarded for accomplishing the performance expectations identified in my individual performance plan.
Agree  (percent)
Neither agree  or disagree  (percent)
Disagree  (percent)
Strongly  disagree  (percent)
No basis to  judge / Not  applicable  (percent)
I am rewarded for helping my agency accomplish its goals.
Agree  (percent)
Neither agree  or disagree  (percent)
Disagree  (percent)
Strongly  disagree  (percent)
No basis to  judge / Not  applicable  (percent)
You understand the criteria used to award bonuses (e.g., cash awards).
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
You understand the criteria used to award pay level adjustments (e.g., an increase from SES level 1 to level 2).
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
Pay level adjustments are dependent on an individual's contribution to the organization's goals.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Bonuses are dependent on an individual's contribution to the organization's goals.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
section_title: 7. Make meaningful distinctions in performance.
paragraphs: Your agency's SES performance management system uses performance ratings to make meaningful distinctions between acceptable and  outstanding performers.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Your agency's SES performance management system uses bonuses to make meaningful distinctions between acceptable and   outstanding performers.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
Your agency uses performance information and documentation to make distinctions in senior executive performance.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Your agency provides candid and constructive feedback that allows you to maximize your contribution to organizational goals.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
section_title: 8. Involve employees and stakeholders to gain ownership of performance management systems.
paragraphs: You have been given the opportunity to be involved in refining your agency's SES performance management system.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
You have been involved in refining your agency's SES performance management system.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
Formal training on your agency's SES performance management system is available to you.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
You have participated in formal training on your agency's SES performance management system.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Your overall involvement in the SES performance management system has increased your understanding of it.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
section_title: 9. Overall perceptions of the SES performance management system.
paragraphs: Your agency's SES performance management system is used as a tool to manage the organization.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
Your agency's SES performance management system is used in achieving organizational goals.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Your agency's SES performance management system holds you accountable for your contributions to organizational results.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Your agency's SES performance management system facilitates discussions about your performance as it relates to organizational goals  during the year.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
No basis to  judge / Not  applicable  (percent)
Your agency's SES performance management system helps to maintain a consistent focus on organizational goals during transitions, such  as changes in leadership (at any level) and change management initiatives.
To a great  extent  (percent)
To a moderate  extent  (percent)
To a small  extent  (percent)
To no extent  (percent)
section_title: Selected Elements of Education’s, HHS’s, and NASA’s SES Performance Management Systems
subsections: section_title: Education
subsections: section_title: Defining SES Performance Expectations
paragraphs: Education required all of its senior executives to include three critical  elements in their individual performance plans for the 2003 performance  appraisal cycle (July 2002–June 2003). The critical elements and examples  of the related individual and organizational performance requirements  include the following.
Leadership, management, and coaching: Takes leadership in  promoting and implementing the department’s mission, values, and  goals; develops and communicates a clear, simple, customer-focused  vision/direction for the organization and customers that is consistent  with the department’s mission and strategic goals; fosters improved  workforce productivity and effective development and recognition of  employees; and promotes collaboration and teamwork, including  effective union-management relations, where appropriate.
Work quality, productivity, and customer service: Produces or  assures quality products that are useful and succinct, that identify and  address problems or issues, and that reflect appropriate analysis,  research, preparation, and sensitivity to department priorities and  customer needs; anticipates and responds to customer needs in a  professional, effective, and timely manner; initiates new and better ways  of doing things; and creates real and positive change.
Job specifics: Senior executives are to include performance  expectations that are applicable to their individual positions and  support their principal offices’ goals as well as the department’s  strategic goals and priorities, including the President’s Management  Agenda, the Blueprint for Management Excellence, and the Culture of  Accountability.
section_title: Appraising Performance
paragraphs: Education sets guidelines for its offices to follow in appraising  performance and recommending senior executives for bonuses. The senior  executive performance appraisals are to be based on demonstrated results  related to Education’s goals and priorities, including the President’s  Management Agenda, the Blueprint for Management Excellence, the  Culture of Accountability, and the Secretary’s strategic plan. In addition,  the senior executive’s appraisal is to be based on both individual and  organizational performance, taking into account  results achieved in accordance with the department’s strategic plan and  goals, which are developed in accordance with the Government  Performance and Results Act of 1993 (GPRA);   the effectiveness, productivity, and performance quality of the  employees for whom the senior executive is responsible; and  equal employment opportunity and diversity and complying with merit  systems principles.
In addition, the responses of the customers, coworkers, and employees  through the automated performance feedback process are to be considered  in determining the senior executive’s performance rating.
Senior executives must receive a performance rating of “successful” to be  eligible for a bonus. Bonus recommendations are to be based on the senior  executive’s demonstrated results and accomplishments toward the  department’s strategic goals and organizational priorities.  Accomplishments should demonstrate how Education’s achievements  could not have been possible without the senior executive’s leadership and  contribution.
section_title: Defining SES Performance Expectations
paragraphs: HHS required its senior executives to set measurable, specific performance  expectations in their fiscal year 2003 individual performance plans (or  performance contracts) that align with HHS’s strategic goals, the “One- HHS” management and program objectives, and their operating divisions’  annual performance goals. According to agency officials, senior executives  are to choose the One-HHS objectives and strategic and annual  performance goals that relate to their job responsibilities, and tailor their  individual performance expectations to reflect these responsibilities in  their performance plans.
The One-HHS objectives, which reflect the program and management  priorities of the Secretary, include the following.
Management objectives: The purpose of the objectives is to better  integrate HHS management functions to ensure coordinated, seamless, and  results-oriented management across all operating and staff divisions of the  department. 1.
Implement results-oriented management.
2.
Implement strategic human capital management.
3.
Improve grants management operation and oversight. 4. Complete the fiscal year 2003 competitive sourcing program. 5.
Improve information technology management. 6. Administrative efficiencies. 7. Continue implementation of unified financial management system.  8. Consolidate management functions. 9. Achieve efficiencies through HHS-wide procurements. 10. Conduct program evaluations and implement corrective strategies for  any deficiencies identified.
Program objectives: The purpose of the objectives is to enhance the  health and well-being of Americans by providing for effective health and  human services and by fostering strong, sustained advances in the sciences  underlying medicine, public health, and social services. 1.
Increase access to health care (Closing the Gaps in Health Care). 2. Expand consumer choices in health care and human services. 3. Emphasize preventive health measures (Preventing Disease and  Illness). 4. Prepare for and effectively respond to bioterrorism and other public  health emergencies (Protecting Our Homeland).
5.
Improve health outcomes (Preventing Disease and Illness).
6.
Improve the quality of health care (21st Century Health Care). 7. Advance science and medical research (Improving Health Science). 8.
Improve the well-being and safety of families and individuals, especially  vulnerable populations (Leaving No Child Behind). 9. Strengthen American families (Working Toward Independence). 10. Reduce regulatory burden on providers, patients, and consumers of  HHS’s services.
In addition to the annual performance goals, operating divisions may have  their senior executives include specific individual performance  expectations in their performance plans. According to an agency official,  the senior executives in FDA have set expectations in their plans that are  relevant to the work in their centers. For example, the senior executives  who work on issues related to mad cow disease in the Center for Veterinary  Medicine have included goals related to this type of work in their individual  performance plans.
section_title: Appraising Performance
paragraphs: HHS sets general guidance for operating divisions to follow when  appraising senior executive performance and recommending senior  executives for bonuses and other performance awards, such as the  Presidential Rank Awards. Overall, a senior executive’s performance is to  be appraised at least annually based on a comparison of actual  performance with expectations in the individual performance plan. The  operating divisions are to appraise senior executive performance taking  into account such factors as   measurable results achieved in accordance with the goals of GPRA;  customer satisfaction;   the effectiveness, productivity, and performance quality of the  employees for whom the executive is responsible; and   meeting affirmative action, equal employment opportunity, and diversity  goals and complying with the merit systems principles.
In recommending senior executives for bonuses, operating divisions are to  consider each senior executive’s performance, including the rating and the  extent of the executive’s contributions to meeting organizational goals.  Senior executives who receive ratings of “fully successful” are eligible to be  considered for bonuses. For fiscal year 2003, bonuses generally were to be  recommended for no more than one-third of the operating division’s senior  executives and awarded to only the exceptional performers. Operating  divisions were to consider nominating only one or two of their very highest  contributors for the governmentwide Presidential Rank Awards. The  greatest consideration for bonuses and Presidential Rank Awards was to be  given to executives in frontline management positions, with direct  responsibility for HHS’s programs.
section_title: Defining SES Performance Expectations
paragraphs: NASA requires its senior executives to include seven critical elements,  which reflect the Administrator’s priorities and NASA’s core values of  safety, people, excellence, and integrity, in their individual performance  plans for the 2004 performance appraisal cycle (July 2003–June 2004).  Senior executives may modify the related performance requirements by  making them more specific to their jobs. These seven critical elements and  the related performance requirements are as follows.
The President’s Management Agenda: Understands the principles of  the President’s Management Agenda and actively applies them; assures  maximum organizational efficiency, is customer focused, and  incorporates presidential priorities in budget and performance plans;  capitalizes on opportunities to integrate human capital issues in  planning and performance and expand electronic government and  competitive sourcing; and pursues other opportunities to reduce costs  and improve service to customers.
Performance requirement: Applicable provisions of the agency  human capital plan are implemented; financial reports are timely and  accurate; clear measurable programmatic goals and outcomes are  linked to the agency strategic plan and the GPRA performance plan;  and human capital, e-government, and competitive sourcing goals are  achieved.
Health of NASA: Actions contribute to safe and successful mission  accomplishment and/or strengthen infrastructure of support functions;  increases efficient and effective management of the agency; facilitates  knowledge sharing within and between programs and projects; and  displays unquestioned personal integrity and commitment to safety.
Performance requirement: Demonstrates that safety is the  organization’s number one value; actively participates in safety and  health activities, supports the zero lost-time injury goals, and takes  action to improve workforce health and safety; meets or exceeds  cost and schedule milestones and develops creative mechanisms  and/or capitalizes on opportunities to facilitate knowledge sharing;  and achieves maximum organizational efficiency through effective  resource utilization and management.
Equal opportunity (EO) and diversity: Demonstrates a commitment  to EO and diversity by proactively implementing programs that  positively impact the workplace and NASA’s external stakeholders and  through voluntary compliance with EO laws, regulations, policies, and  practices; this includes such actions as ensuring EO in hiring by  providing, if needed, reasonable accommodation(s) to an otherwise  qualified individual with a disability or ensuring EO without regard to  race, color, national origin, sex, sexual orientation, or religion in all  personnel decisions and in the award of grants or other federal funds to  stakeholder recipients.
Performance requirement: Actively supports EO/diversity efforts;  consistently follows applicable EO laws, regulations, Executive  Orders, and administration and NASA policies, and the principles  thereof, in decision making with regard to employment actions and  the award of federal grants and funds; cooperates with and provides  a timely and complete response to NASA’s Discrimination Complaints  Division, the U.S. Equal Employment Opportunity Commission, and  the courts during the investigation, resolution, and/or litigation of  allegations of illegal discrimination under applicable EO laws and  regulations.
Collaboration: Integrates One-NASA approach to problem solving,  program/project management, and decision making; leads by example  by reaching out to other organizations and NASA centers to collaborate  on work products; seeks input and expertise from a broad spectrum;  and demonstrates possession of organizational and interpersonal skills.
Performance requirement: Provides the appropriate level of high- quality support to peers and other organizations to enable the  achievement of the NASA mission; results demonstrate support of  One-NASA and that stakeholder and customer issues were taken into  account.
Professional development: Has a breadth of experience in different  organizations, agencies, functional areas, and/or geographic locations;  demonstrates continual learning in functional and leadership areas, for  example, through advanced education/training or participating in  seminars; encourages and supports development and training of  assigned staff; and where feasible, seeks, accepts, and encourages  opportunities for developmental assignments in other functional areas  and elsewhere in NASA, with a focus on broadening agencywide  perspective.
Performance requirement: Participates in training/learning  experiences appropriate to position responsibilities and to broaden  agencywide perspective and actively plans for and supports the  participation of subordinate staff in training and development  activities.
Meets program objectives: Meets and advances established agency  program objectives and achieves high-quality results; demonstrates the  ability to follow through on commitments; and individual fits into long- term human capital strategy and could be expected to make future  contributions at a higher level or in a different capacity at the same  level.
Performance requirement: Meets appropriate GPRA/NASA strategic  plan goals and objectives; customers recognize results for their high- quality and responsiveness to requirements/agreements.
Implements a fair and equitable performance-based system  within organizational component (applicable only for  supervisory positions): Implements/utilizes a fair, equitable, and  merit/performance-based process/system for the evaluation of  individuals for bonuses, promotions, career advancements, and general  recognition.
Performance requirement: System reflects the key leadership,  teamwork, and professional excellence on which decisions are  based; results have credibility with supervisors, subordinates, and  peers.
section_title: Appraising Performance
paragraphs: NASA provides guidance for the centers and offices to follow in appraising  senior executive performance and recommending executives for bonuses  or other performance awards, such as Presidential Rank Awards or  incentive awards. The senior executive’s performance appraisal is to focus  on results toward the performance requirements specified in the individual  performance plan, specifically the achievements that address the agency’s  goals rather than the quality of effort expended. In addition, senior  executive appraisals are to be based on individual and organizational  performance, taking into account such factors as   results achieved in accordance with the goals of GPRA;   the effectiveness, productivity, and performance of assigned employees;  meeting safety and diversity goals;  complying with merit system principles;  customer perspective focusing on customer needs, expectations, and   employee perspective focusing on employee needs, such as training,  internal processes, and tools to successfully and efficiently accomplish  their tasks; and   business perspective focusing on outcomes and the social/political  impacts that define the role of the agency and the business processes  needed for organizational efficiency and effectiveness.
In considering customer, employee, and other stakeholder perspectives for  senior executive appraisals, rating officials may use formal mechanisms,  such as surveys, or less formal mechanisms, such as unsolicited customer  and employee feedback, and analysis of personnel data, such as turnover  rates, diversity reports, grievances, and workforce awards and recognition.
All senior executives with annual summary ratings of “fully successful” or  higher are eligible to be considered for bonuses. Bonus recommendations  are to be based solely on exceptional performance as specified and  documented in the senior executive’s performance plan.
section_title: Comments from the Department of Education
section_title: Comments from the Department of Health and Human Services
section_title: Comments from the National Aeronautics and Space Administration
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to the individuals named above, Janice Lichty Latimer, Erik  Hallgren, Ronald La Due Lake, Mark Ramage, Nyree M. Ryder, and Jerry  Sandau made key contributions to this report.
section_title: GAO’s Mission
paragraphs: The General Accounting Office, the audit, evaluation and investigative arm of  Congress, exists to support Congress in meeting its constitutional responsibilities  and to help improve the performance and accountability of the federal government  for the American people. GAO examines the use of public funds; evaluates federal  programs and policies; and provides analyses, recommendations, and other  assistance to help Congress make informed oversight, policy, and funding  decisions. GAO’s commitment to good government is reflected in its core values of  accountability, integrity, and reliability.
section_title: Obtaining Copies of GAO Reports and Testimony
paragraphs: The fastest and easiest way to obtain copies of GAO documents at no cost is  through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and full- text files of current reports and testimony and an expanding archive of older  products. The Web site features a search engine to help you locate documents  using key words and phrases. You can print these documents in their entirety,  including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and  correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site  daily. The list contains links to the full-text document files. To have GAO e-mail this  list to you every afternoon, go to www.gao.gov and select “Subscribe to   e-mail alerts” under the “Order GAO Products” heading.
subsections: section_title: Order by Mail or Phone
section_title: To Report Fraud, Waste, and Abuse in Federal Programs
section_title: Public Affairs