Office of Personnel Management: Opportunities Exist to Build on Recent Progress in Internal Human Capital Capacity
Published: 2007-10-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Given the importance of the Office of Personnel Management's (OPM) role in managing the nation's federal workforce, GAO assessed OPM's internal capacity for human capital management. This report--the third in the series--extends prior work and (1) looks at the extent to which OPM has addressed key internal human capital management issues identified by examining employee responses to the 2004 and 2006 Federal Human Capital Survey (FHCS) and (2) has strategies in place to ensure it has the mission critical talent it needs to meet current and future strategic goals. To address our objectives, GAO analyzed 2004 and 2006 FHCS results, summaries of OPM employee focus groups, and analyzed OPM strategic and human capital planning documents.
section_title: What GAO Found
paragraphs: OPM has taken positive actions to address specific concerns raised by employees and managers in the 2004 and 2006 FHCS responses. OPM conducted employee focus groups to understand factors contributing to the low 2004 survey scores and took actions, such as trying to improve communication throughout the agency. The 2006 survey results showed improvement in the area of leadership, with mixed results in the performance culture and accountability area, and continued concern in the talent management area. Without the responses from the investigative service employees who transferred from the Department of Defense in early 2005, OPM's 2006 FHCS results would have been, in many cases, significantly more positive than in 2004. The perceptions of the investigative service employees, however, will need continued attention. OPM has strategies in place, such as workforce and succession management plans, that are aligned with selected leading practices relevant to the agency's capacity to fulfill its strategic goals. For example, OPM's top leadership is involved in these efforts, and the agency has assessed gaps in numbers and competencies and created gap closure plans for its mission critical and leadership workforce. OPM lacks, however, a well-documented agencywide evaluation process of some of its workforce planning efforts. In particular, OPM's implementation of division-level training plans could make it difficult for the agency to identify and address reasons for shortfalls in meeting its talent management goals. In a relatively short time, there will also be a Presidential transition, and well-documented processes can help to ensure a seamless transition that builds on the current momentum.

section_title: Letter
paragraphs: The Office of Personnel Management (OPM) has a vital role to play in  ensuring agencies are making strategic human capital management a  priority. In addition, OPM has an important operational responsibility to  work with federal departments and agencies to ensure that human capital  reforms, such as performance management systems, are providing  employees with fair and transparent results and meaningful opportunities  to enhance communication and improve individual and organizational  performance. These strategic and operational human capital management  challenges also exist within OPM, and as OPM’s role in the federal  government continues to evolve, its workforce must be structured to  tackle these challenges.
We have previously reported that OPM has made commendable efforts  toward transforming itself to being a more effective leader of  governmentwide human capital reform, but that it can build upon that  progress by addressing challenges that remain. For example, OPM’s own  workforce, through the Federal Human Capital Survey (FHCS), has  expressed concerns about the agency’s ability to recruit and develop  employees with the skills necessary to achieve its mission objectives.  Further, the executive branch agencies have pointed to problems in  receiving timely and accurate human capital guidance and advice from  OPM. In addition, OPM has undergone significant changes in the last few  years including the expansion of its agency functions in the area of  personnel security investigations. In early 2005, the agency’s workforce  grew by approximately 40 percent when more than 1,500 security  clearance employees transferred from Defense Security Services (DSS), a  Department of Defense (DOD) agency, to the OPM investigative services  division.
Given the importance of OPM’s key role and these challenges, you asked  us to assess the extent to which OPM has the capacity to lead and  implement governmentwide human capital reform. In addition to the June  2006 testimony on OPM’s internal capacity for leading human capital  reform, we issued a report in January 2007 that specifically identified  lessons that could be learned from OPM’s efforts to lead and implement  the senior executive performance-based pay system and other human  capital initiatives that can be applied to ongoing and future human capital  reform efforts. For this report, the third in the series, we determined the  extent to which OPM (1) has addressed key internal human capital  management issues identified by examining employee responses to the  2004 and 2006 FHCS, and (2) has strategies in place to ensure it has the  mission critical talent it needs to meet current and future strategic goals.
To address our first objective, we analyzed OPM’s 2004 and 2006 FHCS  results related to key issues of leadership, performance culture and  accountability, and talent management to determine whether OPM has  made progress in addressing areas of concern from the 2004 survey. We  also analyzed OPM’s 2006 survey results to identify any new challenges to  OPM’s strategic human capital management. To address our second  objective, we reviewed OPM’s strategic and human capital planning  documents and analyzed the extent to which OPM adheres to selected  strategic workforce planning practices and principles relevant to OPM’s  capacity to fulfill its strategic goals. For example, we reviewed OPM’s  analyses identifying critical skills and competencies and related gaps and  determined the extent to which they aligned with OPM’s strategic and  operational plan. We focused primarily on examining Senior Executive  Service (SES) positions and positions from the two OPM divisions with the  most responsibility for working with federal departments and agencies to  assist them with their human capital efforts: the Strategic Human  Resources Policy (SHRP) and the Human Capital Leadership and Merit  System Accountability (HCLMSA) divisions. We also had discussions with  and obtained other pertinent documentation from officials at OPM at their  headquarters in Washington, D.C. In addition, we reviewed academic  literature and prior GAO reports about succession and workforce  planning.
We conducted our review in Washington, D.C., from December 2006  through August 2007 in accordance with generally accepted government  auditing standards. Detailed information on our scope and methodology  appears in appendix I.
subsections: section_title: Background
paragraphs: OPM manages the federal government’s human capital and is responsible  for helping agencies shape their human capital management systems and  holding them accountable for effective human capital management  practices. Title 5 of the U.S. Code, which provides for the effective  management of the civil service, describes OPM’s mission and  responsibilities. OPM is also responsible for administering retirement,  health benefits, and other insurance services to government employees,  annuitants, and beneficiaries.
During the past several years, OPM has undergone significant changes.  The entire agency was restructured in fiscal year 2003, which included  steps such as eliminating redundant operations and organizational layers.
As mentioned previously, in early 2005, OPM’s workforce expanded by  approximately 40 percent when more than 1,500 security clearance  employees transferred from DSS. Several months later, OPM experienced  a change in top leadership, with the appointment of a new agency director  in May 2005. In addition to making organizational changes, OPM has recast  a number of its mission objectives. As we previously reported, OPM is  continuing to transform itself from less of a rulemaker, enforcer, and  independent agent to more of a consultant, toolmaker, and strategic  partner in leading and supporting executive branch agencies’ human  capital management systems. OPM has also played a role in the design  and implementation of new human capital systems at the Departments of  Homeland Security and Defense and has exerted greater human capital  leadership through its Human Capital Scorecard of the President’s  Management Agenda (PMA).
OPM is responsible for helping other federal departments and agencies  with strategic human capital management, while serving as a model for  managing its own workforce. SHRP and HCLMSA are the two OPM  divisions with the most responsibility for working with federal  departments and agencies to assist them with making their human capital  efforts more effective. SHRP designs, develops, and implements human  capital policies and programs. SHRP’s objective is to make sure federal  agencies understand human capital policy and correctly apply it. For  example, SHRP counsels agencies on how to apply policy to their  performance appraisal, employee development, labor-management  relations, information technology, and workforce planning programs.  HCLMSA serves as the strategic leader of the governmentwide effort to  transform human capital management so that agencies are held  accountable for managing their workforces effectively, efficiently, and in  accordance with merit principles. This division provides advice and  assistance in all areas of staffing and human capital management, such as  workforce restructuring and assistance in recruiting. While SHRP focuses  on developing human capital policy, HCLMSA’s responsibilities deal  primarily with the implementation of that policy. The Management  Services Division (MSD), headed by the senior executive who also serves  as the agency’s Chief Human Capital Officer (CHCO), is responsible for  providing human capital management services to the agency. MSD houses  the Center for Human Capital Management Services (CHCMS), which is  responsible for coordinating much of OPM’s internal strategic human  capital planning, including workforce and leadership succession  management efforts. This group is also responsible for supporting the  agency in recruitment, hiring, and other day-to-day human capital  management activities. Figure 2 shows OPM’s organizational structure.
One of OPM’s efforts has been to conduct the FHCS biennially to measure  employees’ perceptions on whether conditions characterizing successful  organizations are present in their agencies. OPM uses the FHCS in the  Human Capital Assessment and Accountability Framework (HCAAF) as  one source of information for evaluating agency success in creating a  better working environment for their employees. OPM analyzes the FHCS  results for itself and each agency with the four indices of the HCAAF:  Leadership and Knowledge Management, Results-Oriented Performance  Culture, Talent Management, and Job Satisfaction. A performance  agreement at OPM showed the agency had a goal of being in the top half of  agencies surveyed for 2006 and being in the top 5 of government rankings  for 2008. The FHCS data are also used to rank agencies and  subcomponents on a “Best Places to Work” index score, which measures  employee satisfaction. The Partnership for Public Service and the Institute  for Study of Public Policy Implementation produce the best places to work  rankings. More than 220,000 federal employees responded to the most  recent survey in 2006, with a governmentwide response rate of 57 percent.  The survey participation rate within OPM was 80 percent.
In 2006 testimony, we reported that OPM’s 2004 survey results could be  summarized as reflecting employees’ concerns about perceptions of  leadership; talent management; customer focus, communication, and  collaboration; and performance culture and accountability. We identified  these four key areas as critical for human capital development in order for  OPM to continue to transform itself into a more effective leader of  governmentwide human capital reform. The areas differ slightly from the  four HCAAF indices and represent a somewhat different grouping of  survey items than the indices. For example, we included three questions  that were asked relating to talent management: (1) the skill level in my  work unit has improved over the past year; (2) I have sufficient resources  to get my job done; and (3) supervisors/team leaders provide employees  with constructive suggestions to improve their job performance. For this  report, we did not include customer focus, communication, and  collaboration because the number of survey items we included in that area  decreased to one question from 2004 to 2006, making the data no longer  significant.
section_title: OPM 2006 Survey Results Show Improvement in Employees’ Perceptions of Leadership: Challenges Exist in Talent Management and Perceptions of DOD Investigative Service Transfers
paragraphs: Compared to its 2004 results, OPM’s 2006 FHCS results indicate strong  improvement in employee perceptions on key questions relating to  leadership, mixed results in performance culture and accountability, and  continuing challenges in talent management. Additionally, OPM’s 2006  survey results show that the investigative service transfers from DOD, who  joined the agency in 2005, were less positive than the rest of OPM’s 2006  responses and negatively affected OPM’s overall results. As a response to a  decrease in positive 2004 FHCS responses within OPM, the agency used  survey results and focus groups to develop action plans to address areas of  employee concerns. In response to the 2006 survey results, OPM reviewed  and updated the first set of action plans by incorporating changes as  needed to address areas of concern to OPM employees.
subsections: section_title: OPM’s 2006 FHCS Leadership Responses Show Strong Improvement
paragraphs: Top leadership in agencies across the federal government must provide  the committed attention needed to address human capital and related  organizational transformation issues. In 2006, OPM experienced a positive  increase in employee perceptions of questions relating to leadership  compared to 2004 FHCS responses. Four questions out of the top 10  questions having the largest increase in positive responses from 2004 to  2006 were related to leadership. For example, there was an 8 percentage  point increase for both “satisfaction with information received from  management” and “my organization’s leaders maintain high standards of  honesty and integrity,” as displayed in figure 3.
The positive response increase for leadership questions from 2004 to 2006  represents a major improvement for the agency and a decreasing gap  between OPM and the rest of government. OPM was significantly higher  than the rest of government on three of eight leadership questions. For  example, on the question “Managers communicate the goals and priorities  of the organization,” OPM was 11 percentage points higher than the rest of  government and 15 percentage points higher than OPM’s 2004 results, as  shown in figure 4. Additionally, on the HCAAF index for Leadership and  Knowledge Management, OPM’s ranking improved from 28th in 2004 to  19th in 2006, out of 36 ranked agencies.
For questions relating to leadership, however, OPM’s 2006 results continue  to show a larger gap between SES and General Schedule (GS)-level  employees than the difference found in the rest of government results. We  reported previously that OPM’s 2004 FHCS results and the follow-up focus  group discussions implied that information did not cascade effectively  from the top leadership throughout the organization, and we identified a  gap in perception between OPM’s SES and GS-level employees,  particularly relating to questions on leadership. In 2006, this gap persists  between SES and GS-level employees. For example, in both 2004 and 2006  OPM’s SES responses were substantially more positive than non-SES  responses for the statement “I have a high level of respect for my  organization’s senior leaders.” While OPM has taken steps to address the  lack of overall and cross-divisional communication and issues related to  employee views of senior management, this gap between SES and GS-level  response remains a challenge.
Finally, the significant leadership changes that occurred at OPM since the  2004 FHCS survey may have affected the perspectives of employees  regarding leadership questions. A new director began a term at the agency  in May 2005 and, according to OPM, about half of the senior leadership  started after OPM administered the 2004 survey. Additionally, actions  taken beginning in May 2006 in response to the 2004 survey results, such  as Web casts and e-mail communications from the Director regarding  internal changes, were intended to lead to positive 2006 FHCS responses  to leadership questions.
section_title: 2006 FHCS Performance Culture and Accountability Responses Show Mixed Results
paragraphs: Effective performance management systems can drive organizational  transformation by encouraging individuals to focus on their roles and  responsibilities to help achieve organizational outcomes. We reported in  2006 that OPM’s executive performance management system aligns the  performance expectations of OPM’s top leaders with the goals of the  organization. In addition, we reported that OPM could build upon its  positive results for some of its performance-related questions to address  performance culture concerns, one of the three areas examined in the  focus groups. Similar to the 2004 results, OPM’s 2006 results relating to  performance culture and accountability showed some mixed areas of  strength that could be maximized and areas of weakness to be addressed.
Of the 12 questions we identified as relating to performance culture and  accountability, OPM’s results for three questions in 2006 demonstrated  substantial improvement compared to 2004 results and two questions  dropped significantly from 2004 to 2006. Figure 5 shows the questions that  substantially improved. OPM’s highest positive increase from 2004 to 2006  was a 17 percentage point increase in response to “managers review and  evaluate the organization’s progress toward meeting its goals and  objectives.” OPM also saw a more positive response to “I am held  accountable for achieving results.” Questions that dropped significantly  involved employees feeling encouraged to come up with new and better  ways of doing things and performance appraisals being a fair reflection of  performance.
On the performance accountability questions that saw a large positive  increase at OPM from 2004 to 2006, OPM was significantly higher than the  rest of government. In addition, OPM’s ranking on the HCAAF index for  Performance Culture increased from 29th in 2004 to 25th in 2006. OPM,  however, remains among the bottom half of the 36th ranked agencies in  this area. Of the performance culture and accountability questions, OPM  responded significantly lower than the rest of government on five  questions. Two of these questions dealt with creativity and innovation in  the workplace, as displayed in figure 6. These mixed results indicate that  while OPM has seen and can build upon the positive increases on some  performance culture and accountability questions, room for improvement  still exists in this area at the agency.
section_title: 2006 FHCS Talent Management Responses Show Challenges Persist
paragraphs: OPM’s 2006 FHCS responses indicate that talent management concerns  continue among employees at the agency. Of the nine questions we  identified as relating to talent management, OPM showed a decline on  seven questions from 2004 to 2006. The largest decline from 2004 to 2006  was a 5 percentage point drop from 48 to 43 percent of OPM employees  reporting satisfaction with the training received for their present job.  Figure 7 shows the decline in two talent-management related questions.  Training was a specific area of concern for OPM’s SES, who reported an 8  percentage point decrease in satisfaction with their training and a 13  percentage point decrease in support for “the skills in my work unit have  improved in the past year.” We have previously highlighted talent  management as an area of concern and noted that OPM’s ability to lead  and oversee human capital management could be affected by its internal  capacity and ability to maintain an effective leadership team, as well as an  effective workforce.
In addition, in the 2006 survey, OPM was significantly lower than the rest  of government on five of the nine questions we identified as relating to  talent management. For example, OPM was 11 percentage points lower  than the rest of government for “the workforce has the job-relevant  knowledge and skills necessary to accomplish organizational goals.”  Additionally, only 39 percent of OPM employees said that their training  needs were assessed, compared to 51 percent of the rest of government, as  displayed in figure 8. Further, OPM’s ranking decreased from 28th to 31st  out of 36 agencies on the HCAAF index for Talent Management in 2006.
section_title: DOD Investigative Service Transfers’ Survey Results Show Need for Special Attention to Those Employees
paragraphs: Without DOD transfers, results for just under half of the 2006 survey  questions relating to leadership, performance culture and accountability,  and talent management would have been higher by 5 percentage points or  more. In fact, all but 1of the 29 questions relating to leadership,  performance culture and accountability, and talent management that we  identified would have been more positive without DOD transfers.  Moreover, OPM reported those employees who participated in both the  2004 and 2006 surveys rated the agency higher on almost every item on the  survey in 2006. OPM’s FHCS agency ranking would have increased  dramatically from 26th to 11th place without the DOD transfers. OPM  would have seen the greatest increase in those questions relating to  leadership, with six of the eight questions we identified as relating to  leadership having a 14 to 16 percentage point increase from 2004 to 2006.  For example, without DOD transfers, OPM 2006 response to “I have a high  level of respect for my organization’s senior leaders” would have been 14  percentage points higher than 2004 results. The question that would not  have been more positive addressed talent management, suggesting that  talent management is a salient issue for OPM, regardless of the transfers.  In addition, DOD transfers gave more neutral responses on several  questions, particularly those relating to performance culture and  accountability and equal employment issues, indicating a lack of  perspective rather than a negative response. Given that the DOD transfers  had more neutral responses to these questions, this suggests that OPM  may have an opportunity to help shape the perspectives of its new  transfers on these issues. Selected survey questions and data from the  2004 and 2006 surveys appear in appendix II.
section_title: OPM Addressed Human Capital Issues through 2004 and 2006 FHCS Action Plans
paragraphs: Figure 9 shows a sequence of selected actions OPM took regarding the  2004 and 2006 FHCS and the accompanying internal OPM action plans.
To address a decrease in positive responses to the 2004 FHCS, OPM hired  a contractor to conduct a series of OPM employee focus groups. The  purpose of the groups was to understand the factors contributing to the  2004 responses and report employee ideas for addressing top priority  improvement areas. Employees were randomly selected to participate in  33 focus groups with participants from all major divisions, headquarters  and the field, employees and supervisors, and major installations. The  results of the 2004 FHCS and the responses of the focus groups showed  that OPM employees were most concerned with leadership and  leadership’s ability to deal with staff about policies and performance.  Employees preferred OPM to have more open communication to address  inadequate planning and excessive supervision. Employees identified  additional problem areas for OPM including lack of management support,  inadequate training for supervisors and managers on performance culture  and accountability, and lack of senior executive interest in and respect for  employees.
OPM required each division to develop specific action plans to address the  critical issues raised by employees in both the survey results and the focus  groups. In December 2005 and January 2006, the CHCMS met with each  associate director and their management team to present their individual  results and discuss the next steps in the process. OPM also held a half-day  planning meeting with a cross-section of OPM divisions and office  representatives to develop an OPM-wide action plan. As an example of  activities based on the 2004 survey action plans, OPM has attempted to  improve communication throughout the agency by initiating visits to its  field locations, creating an e-mail mail box where employees can make  suggestions on more efficient and effective ways of doing business, and  holding employee meetings. Additionally, to address employee concerns  about communication with senior leaders, OPM established brown bag  lunches with the Director and a process in all divisions to solicit employee  input on various initiatives and set aside “open door” time for employees  to speak with their managers.
After release of the results of the 2006 FHCS, OPM reviewed and updated  the first set of action plans responding to the 2004 survey by incorporating  changes as needed to address new and continuing areas of concern to  OPM employees. OPM’s analysis of the data included (1) comparisons  between responses in 2004 and 2006 agencywide and governmentwide,   (2) comparisons of results by organizational components, (3) a review of  responses between headquarters and field locations, and (4) a review of  the responses comparing supervisory and nonsupervisory employees.  OPM believed responses to eight questions on the 2006 FHCS improved  based on their previous actions for issue areas dealing with leadership.  OPM identified that the areas reflecting the lowest positive response rates  centered in large part around performance culture areas; for example,  promotions based on merit, employee empowerment, and awards. OPM  also found that the responses from the field employees were lower than  the responses from headquarters employees, where some questions had  significant differences ranging from 10 to 20 percentage points lower.
In response to the survey results, OPM updated five actions from the  action plans responding to the 2004 survey and developed five new actions  for the action plans responding to the 2006 survey. In terms of leadership,  OPM carried over two actions from the first set of action plans because of  the positive response from employees: using OPM’s Intranet for up-to-date  information sharing throughout the organization and using the Director’s  formal and informal communication methods, such as brown bag  meetings, field site visits, and Web casts. One area of concern for  employees of OPM was employee empowerment. To address this issue,  OPM indicated that it would continue to work on delegating authorities to  the lowest appropriate level and involving employees in decisions to  increase internal approval and coordination to streamline organizational  processes. In addition, in OPM’s recently developed action plans, 5 out of  10 actions will address talent management. For example, OPM will be  implementing the core curriculum for supervisory training that was  developed because of the first set of action plans. OPM officials said the  supervisory training program was funded in May 2007 and implementation  started in July 2007. Additionally, OPM developed four new actions to deal  with training and development: (1) administering performance  management training for all employees, (2) developing individual  development plans (IDP), (3) creating electronic access to training  opportunities, and (4) implementing an internal rotation professional  development program.
Each division and office analyzed their organization-specific results to  reflect the 2006 responses of their employees in order to update their  previous action plans. SHRP, for example, had each of its center leaders  meet with employees to discuss the survey results and held a divisional  town hall meeting to talk about the results and answer any questions the  employees had. HCLMSA used a new interactive communication tool to  involve employees and management in resolving issues and capitalizing on  strengths identified by the 2006 FHCS results. HCLMSA focused on 38  questions where the positive results were less than 65 percent; from these  questions, 3 to 5 questions were consensually determined as key  discussion areas and included in the division’s current action plans. OPM  also plans to develop communications plans to ensure field locations  receive the same information as headquarters on a timely basis.
The investigative services division, which includes the DOD transfer  employees, also developed action plans in response to the 2006 FHCS. For  example, in response to employees’ concerns with their personal work  experience, through early September 2007, 428 Federal Investigative  Service Division (FISD) employees had participated in detail assignments  within FISD, assignments outside of FISD but within OPM, and  assignments to other agencies to gain additional program knowledge. OPM  will conduct an agencywide employee survey in October 2007, and OPM  officials said they believe these survey results will show significant  improvement for FISD.
After OPM assessed the survey results and the Director approved the  action plans, the agency notified its employees about how it will address  the responses and will post information on OPM’s Intranet with continual  progress updates. Additionally, CHCMS officials said they will monitor the  action plans quarterly and report findings to the Director in an effort to  build a positive and productive work climate where all employees and  managers feel valued and appreciated.
section_title: OPM’s Workforce and Succession Plans Align with Selected Leading Practices, but the Agency Lacks a Well-Documented Process of Evaluation of Some of These Efforts
paragraphs: OPM’s workforce and succession plans are consistent with selected  strategic workforce planning practices and principles relevant to OPM’s  capacity to fulfill its strategic goals. OPM’s top leadership is engaged in  workforce and succession planning efforts, and OPM has assessed  competency gaps and created gap closure plans for its mission critical and  leadership workforce. The agency, however, operates some of these  division-level efforts without a well-documented process for evaluation  agencywide. For example, it was not evident how OPM is able to identify  the appropriate level of investment in training and development and to  prioritize funding so that it addresses the most important training needs  first.
subsections: section_title: OPM’s Top Leaders are Involved in Workforce and Succession Planning
paragraphs: We have previously reported that efforts to address important  organizational issues, such as strategic workforce planning, are most likely  to succeed if agencies’ top program and human capital leaders set the  overall direction, pace, tone, and goals from the beginning of the effort.  We have also noted that effective succession planning and management  programs have the support and commitment of their organizations’ top  leadership, and that the demonstrated commitment of top leaders is  perhaps the single most important element of successful management. In  particular, reinforcing leadership support by assigning responsibility for  succession efforts, and holding executives accountable for succession  planning in performance plans, are effective strategies for ensuring the  active participation of leadership.
One of OPM’s vehicles for involving top leadership in its workforce and  succession planning efforts is its ERB. Chaired by OPM’s Chief of Staff, the  ERB serves as the advisory and review body for all major leadership  management policies and programs related to the SES specifically, and  management and leadership in general. Among other responsibilities, the  ERB is charged with executive/leadership succession planning and  workforce planning; executive/leadership staffing management; and  executive, managerial, and leadership development management. ERB  membership consists of all of OPM’s associate directors, including the  associate director who also serves as the agency’s CHCO, along with the  chief financial officer, the general counsel, and the deputy associate  director for CHCMS. The ERB meets weekly and provides CHCMS, OPM’s  internal human resources management group, with direction on key  workforce and succession planning decisions, among other things.
According to a CHCMS official, the ERB helps to set the direction for the  agency’s succession planning and workforce planning efforts. At least  annually, the ERB meets with CHCMS staff and division management to  review all of the succession planning position profile sheets, templates  that the agency uses to try to capture the leadership skills needed for it to  meet its strategic and operational goals and objectives both currently and  in the future. The ERB looks at the description of potential successors  identified and, according to the CHCMS official, will sometimes override  the supervisor’s position profile assessments based on their “big-picture”  knowledge of agencywide human capital resources. The ERB also works  with CHCMS to identify opportunities for economies of scale in addressing  training and development needs that cut across divisions. For example,  CHCMS and the ERB jointly proposed the establishment of a new  supervisory training curriculum for all OPM managers and supervisors.  This curriculum intends to address several agencywide training and  development needs, such as strengthening performance management  skills, closing leadership competency gaps, and addressing issues that  emerged in the 2004 FHCS results. As a result, the Director of OPM  approved funding for this agencywide initiative, which OPM is now  implementing as part of the action plans to address the 2006 FHCS results.
In addition to leveraging the ERB to engage its leadership with workforce  and succession planning, OPM also made explicit its CHCO’s  accountability for succession planning. In the CHCO’s 2006 Performance  Agreement, OPM charged the CHCO with the responsibility of having  agencywide, written succession plans in place by October 2006. OPM also  held other members of OPM’s executive management team accountable  via their 2006 performance agreements for general workforce and  succession planning efforts. In his 2007 executive performance agreement,  the CHCO is accountable for implementing leadership and succession- related training and development initiatives. For example, the CHCO is  responsible for implementing the supervisory training for all managers  described above. This training curriculum includes courses intended to  address leadership competencies, which include performance  management and interpersonal skills training.
section_title: OPM Has Aligned Its Workforce and Succession Plans with Its Strategic Goals
paragraphs: According to OPM’s HCAAF standards, an agency should align its human  capital management strategies, including workforce planning, with its  mission, goals, and organizational objectives and integrate them into its  strategic plans, performance plans, and budgets. We have similarly  reported that it is critically important to align an organization’s human  capital program with its current and emerging mission and programmatic  goals. In its most recently published A Plan for the Strategic  Management of OPM’s Human Capital (HC Plan), OPM links its human  capital planning to its current 5-year, agencywide Strategic and  Operational Plan. The HC Plan explicitly notes the relationship between  OPM’s agencywide mission and its workforce, recognizing that OPM’s  overall success in achieving its mission objectives is dependent on a  strategic focus on its own talent and human capital needs.
OPM charges each of its divisions with linking their workforce analysis  and competency needs to their business initiatives. For example, the SHRP  division has designated the design of a modern compensation system as a  key business initiative. Accordingly, SHRP identifies (1) activities related  to the initiative (working with internal and external stakeholders, drafting  and implementing legislation, etc.); (2) the occupations that constitute its  mission critical workforce (HR policy specialist, actuary, etc); (3) the  number of mission critical staff needed; and (4) the general and technical  competencies that are important for its mission critical workforce (oral  communication, creative thinking, problem solving, etc.). Each of OPM’s  divisions contribute a similar written section to the agencywide HC Plan to  represent how OPM links the identification of its mission critical  occupations and key competencies to its business initiatives. The diagram  in figure 10 depicts the steps in OPM’s workforce planning process.
OPM’s Corporate Leadership Succession Management Plan describes  that the key goal of its succession plan is to ensure the availability of  diverse individuals with the necessary competencies to fill key leadership  positions so the agency can meet its short- and long-term goals, regardless  of turnover. The succession plan also notes that the agency needs leaders  with a mix of specific skills in order to meet the goals and objectives laid  out in its 5-year Strategic and Operational Plan. Similar in its approach to  workforce planning, OPM charges its divisions with the responsibility for  carrying out the individual-level, position-based elements of its succession  planning process.
The diagram in figure 11 depicts the steps in OPM’s succession  management planning process that focus on analyzing the succession risk  and developing an internal leadership pipeline for each individual  leadership position.
OPM requires the direct supervisor of each executive, manager, and  supervisor to complete a succession planning position profile template for  these employees. (See appendix III for a copy of the succession planning  position profile template.) The succession planning position profile sheets  include the supervisor’s judgment of risk factors such as the likelihood  that the incumbent will leave; an identification of key general and  technical competencies needed for the position; a determination of the  “readiness” of internal candidates, those that are ready immediately,  within 1 to 2 years, or within 3 to 5 years; and other items. OPM uses these  quantitative and qualitative assessments to develop succession  management objectives, performance goals, and action plans to help  ensure that OPM has a robust candidate pool to replace leadership  incumbents as needed. Our review of 93 of approximately 330 succession  planning position profile documents showed that nearly all of the sampled  documents had been updated within the past year. Our review also  confirmed that all of these included an estimation of the prospective  successor pool for at least 5 years out, with two citing the need to begin  developing the candidate pipeline at least 10 years in advance. An official  in CHCMS explained OPM intends that the profile sheets will serve as a  built-in mechanism requiring management to think about leadership  positions and how they may need to change. For example, some of the  SHRP profile sheets illustrate sensitivity to the changing environment in  relation to future recruitment efforts: “internally and short term, outlook is  quite positive; however, as agency human resource program  responsibilities continue to restructure, streamline and consolidate into  more generalist and consultative roles, the potential candidate pool of  detail oriented technically proficient staffing experts will decline.”
While some aspects of the succession planning position profile sheets  demonstrate a forward-looking approach to development and recruitment  efforts, the extent to which OPM is identifying key competencies for  leadership positions based on anticipated long-term changes in mission  and objectives is not evident. In reviewing OPM’s instructions for  completing the position profile sheets, we found no guidance stating that  supervisors are to identify key competencies for these leadership positions  according to current and anticipated future requirements.
section_title: OPM Has Assessed Gaps in Numbers and Competencies and Created Gap Closure Plans for Its Mission Critical and Leadership Workforce
paragraphs: We have previously reported that an agency needs to define the critical  skills and competencies that it will require in the future to meet its  strategic program goals and then develop strategies to address gaps and  human capital conditions in critical skills and competencies. With regard  to leadership positions, it is important to emphasize developmental or  “stretch” assignments for high-potential employees in addition to formal  training, in order to strengthen skills and competencies and broaden  experience. Consistent with these workforce and succession planning  principles, OPM has undertaken a number of workforce assessments and  has developed gap closure plans, which include a mix of training and  developmental assignments, to address current and projected deficiencies  in mission critical and leadership positions.
subsections: section_title: Competency Assessments Conducted
paragraphs: According to its current HC Plan, as of June 2006, 62 percent of OPM’s  5,194 employees were in mission critical occupations. OPM has several  division-level and centralized strategies to assess the competencies of its  mission critical occupations. OPM conducted agencywide skills  assessments in 2001 and 2003 and more recent assessments in targeted  mission critical occupations such as information technology and human  resources management (HRM).
In 2006, HCLMSA focused competency assessment and gap closure efforts  on the mission critical occupation of accountability auditor. During the  same year, CHCMS conducted a competency assessment of its HRM  specialists, using a competency model developed by the CHCO Council in  cooperation with OPM. In the fourth quarter of fiscal year 2006, SHRP,  HCLMSA, and the Human Resources Products and Services (HRPS)  divisions assessed their human resources specialists. OPM reassessed  these specialists using the CHCO Council HRM competency model in May  2007. All of these assessments looked for gaps in both competency levels  and numbers of mission critical incumbents.
To determine the competency levels for both its current and prospective  leadership, OPM looks at both individual leadership positions and general  leadership skills. As described in figure 11, in looking ahead to its future  leadership, OPM uses qualitative data to assess potential gaps in its  leadership pipeline, using the succession planning position profiles. As  part of this individual, position-based planning process, the direct  supervisor of every subordinate executive, manager, and supervisor  describes the key competencies needed for a particular position and the  number of potential internal successors for the leadership position, and  produces an estimate of when these candidates will be ready to assume  the leadership responsibilities in question. The supervisor describes the  training and development opportunities needed to address any gaps and to  prepare the pool of prospective candidates to assume the leadership  position. From these individual analyses, OPM derives a measure it refers  to as a “bench-strength index,” which counts the number of internal  candidates that are ready to replace a single incumbent, when it becomes  necessary.
In addition to assessing its in-house leadership pipeline and external  prospects for each individual leadership position, OPM looks at the  competency levels of its current leadership corps. Figure 12 depicts the  steps in OPM’s workforce planning process that focus on assessing the  competencies of the agency’s current leadership incumbents and  developing and implementing plans to close gaps as needed.
The agency most recently conducted a formal competency assessment of  its 376 incumbent leaders in fiscal year 2006, using an online survey  completed by the supervisors of all subordinate executives, managers, and  supervisors. OPM uses these data to make a determination of the extent to  which its current leadership cadre meets the desired proficiency levels for  competencies required in their positions. In early 2007, OPM launched the  Management Competency Assessment Tool (MCAT), a governmentwide,  Web-based instrument for assessing the skill levels of managers,  supervisors, team leaders, and others in key leadership and performance  management competencies. OPM has been using the MCAT internally for  its agencywide leadership competency assessments. The agency used this  tool to conduct a reassessment of skills gaps among these 376 leadership  positions in July 2007.
section_title: Competency Assessments Show Overall Improvement with Some Gaps Remaining
paragraphs: Based on the results of agencywide skills assessments conducted in 2001  and 2003, OPM reports that it has made at least some improvement to  employee proficiency levels in 96 percent of its mission critical  competencies, and has eliminated gaps in 64 percent of these  competencies. OPM’s current HC Plan includes an initiative to conduct an  agencywide skills reassessment to continue to monitor its gap closure  progress.
Regarding its organizational leadership cadre, OPM recently reported  positive results. The only priority competency gap common across  supervisory, managerial, and executive leadership positions was in the  area of interpersonal skills, which are critical to the agency’s increased  focus on performance management, consultancy, and other strategic  initiatives. OPM has also calculated turnover risk and overall succession  risk for leadership positions based on information captured in the  succession planning position profile sheets. These indicate that while 30  percent of the current leadership is at high risk for turnover, only 3  percent are high risk for overall succession purposes, since the  expectation is that OPM can identify suitable candidates from within or  outside the agency. In terms of its leadership candidate pipeline, the  succession planning position profile sheets indicated that as of August  2006, all but 11 of the 376 leadership positions met OPM’s bench-strength  goal of having a minimum 2:1 ratio of ready-now candidates for each  incumbent. More recently, an OPM official confirmed that the agency had  reduced this number even further, with only 8 positions considered by the  agency to be at high-risk for succession management purposes due to  weak bench strength.
On the division level, OPM’s most recent competency assessment and gap  analysis completed in 2006 for employees in the GS-201 HR specialist  mission critical occupation in SHRP and HRPS identified few gaps among  employees in this occupational group. Only the competency area of  knowledge of agency business emerged as a high-priority gap, based on  factors such as the gap’s impact on OPM’s ability to accomplish mission  objectives, size of the gap, and level of difficulty in closing the gap through  development of internal employees or recruitment from external sources.  Specifically, OPM set a target to increase by more than double the number  of HR specialist staff at the advanced proficiency level, from 39 to 87.  OPM’s strategy to accomplish this goal was to provide training and  developmental opportunities to increase the expertise of current staff,  while building a pipeline of HR specialists at the awareness and basic  levels of proficiency from a pool of external hires. In May 2007, OPM  readministered the competency assessment of the SHRP and HRPS GS-201  employees, using the CHCO Council HRM Competency Model, to  determine the extent to which gap closure efforts over the past year  resulted in higher competency proficiency levels. The results of OPM’s  assessment indicated that it had surpassed its goals by moving the HR  specialists to, or beyond, the targeted proficiency levels.
section_title: SHRP’s Mission Critical Workforce
paragraphs: In addition to its emphasis on the HRM Competency Model as it relates to  GS-201 series employees, SHRP has reported on all of the elements of its  mission critical workforce, which include actuaries, statisticians, and  psychologists, along with HR specialists. In the HC Plan, SHRP notes that  its mission critical employees exhibit strengths in the areas of technical  competence, oral communication, and problem solving. It describes areas  of particular challenge in the fields of creative thinking and reasoning.  Further, SHRP is looking ahead to identify a potential future competency  gap in written communication, particularly related to writing policy. SHRP  plans to address competency gaps in the areas of written communication,  creative thinking, and reasoning by incorporating these competencies into  the selection processes for new staff and by providing appropriate  developmental opportunities to current staff.
In an interview with SHRP’s Associate Director about the division’s  mission critical workforce, she noted that recruitment and retention for  the division would continue to present underlying challenges. She said that  SHRP would be trying to recruit employees with the same types of skills  other federal government agencies would increasingly need, requiring  those with excellent written, analytical, and technical abilities as well as  capable leaders. Some positions in SHRP are particularly difficult to fill  with the caliber of talent the division needs. For example, the Associate  Director explained that it was hard to recruit mid-level actuaries and  statisticians from outside OPM because often these individuals, while  possessing adequate technical skills, do not know and understand the  mission and workings of OPM. In addition, recruiting an employee with  actuarial skills and management experience is very difficult given the  salary that individuals with those skills can command in the private sector.  She did note that SHRP does a lot of recruiting based on its mission;  individuals want to come to OPM to be part of some of the largest human  capital programs in the world. In terms of retention, the Associate Director  said that the SHRP division loses a number of employees to other federal  agencies because these agencies view the division’s employees as  potential assets to their human capital offices. For example, she said the  division’s classification employees along with those in employee and labor  relations are highly sought after. She noted that she makes limited use of  recruitment and retention bonuses because of funding issues, but she finds  the intern hiring flexibilities useful.
section_title: HCLMSA’s Mission Critical Workforce
paragraphs: OPM has also been focusing on competency assessments and gap closure  strategies for its HCLMSA division GS-201 HR specialists, who serve as  human capital officers and other HR specialists, directly supporting the  PMA human capital initiative. Based on external stakeholder input, as  well as through internal assessments, HCLMSA chose to set a higher  proficiency level target for its HR specialists in the areas of technical  competence and client engagement. For example, we have noted that,  based on interviews with the federal workforce community, OPM needed a  greater emphasis on providing consultative and technical expertise to its  agency customers. HCLMSA’s leadership took this type of external  feedback into consideration when setting the goal to significantly increase  the percentage of human capital officers and HR specialists who are at  least at the advanced proficiency level in both the technical competence  and client engagement competency areas. OPM has recently reported that,  based on its readministration of the competency assessment of HCLMSA’s  GS-201 employees in June 2007, the division surpassed its competency  goals in the advanced/expert proficiency levels. The division fell short of  its goal for the number of HR specialists at the intermediate level of  proficiency, which OPM attributes to an overall attrition in the number of  HR specialists. Although OPM was able to replace the three human capital  officers that left during the reporting year, it could only recruit one HR  specialist to replace the four that left. As of June 2007, this represented a  net loss of three employees with an overall HCLMSA staff reduction of 6  percent.
In the HC Plan, HCLMSA also describes additional initiatives and actions  related to its mission critical workforce planning. It noted that  recruitment, training, and development efforts have reduced competency  gaps that existed in 2004 and described the establishment of a training  advisory group (TAG) in fiscal year 2005 made up of members who  represent each mission critical role in HCLMSA. In 2007 and beyond,  HCLMSA, with TAG’s assistance, plans to continue to provide staff  development opportunities to ensure employees in mission critical roles  possess all the strategic competencies needed to achieve goals and  accomplish the mission.
In an interview on HCLMSA’s mission critical workforce, the division’s  Associate Director said the biggest recruitment challenge for HCLMSA is  finding the right people with the right skills, and the most important aspect  of retention is maintaining a positive organizational culture. He said the  HCLMSA division is organized into two almost completely separate  functions—human capital management and merit systems  accountability—which require somewhat different skills. He explained  that the human capital side of HCLMSA faces a conundrum because the  division loses employees to other agencies, which is good for the larger  federal human capital community, but difficult for the division. On the  other hand, he said that because HCLMSA’s human capital focus is not as  technical as the compliance side, when he needs to recruit employees, he  is able to successfully hire individuals from the private sector. The  Associate Director said that he sees recruitment as an ongoing process,  and he believes that an important part of his job is to always be recruiting  for current or future positions. In terms of retention, he noted that a  critical component of retention is having a good organizational culture,  which often depends on better communication.
section_title: Gap Closure Plans
paragraphs: OPM has a number of gap closure plans in place. For example, to  specifically address the leadership competency gap in the area of  interpersonal skills, OPM has instituted a requirement that each  supervisor, manager, and executive work with their supervisor to develop  a supervisory training plan. Each individual plan identifies mandatory and  elective training reflecting the specific needs of the individual and  addressing any gaps in the target area of interpersonal skills. To support  the goal of closing the interpersonal skills gap, OPM has developed an  agencywide supervisory training curriculum that includes a mix of  classroom and Web-based course such as “Interpersonal Skills,” “Front  Line Leadership,” and “Dealing with Poor Performers.” In addition to  agencywide and division-level gap closure plans, the position-based  succession planning position profiles for each executive, manager, and  supervisor include an action plan to prepare the pool of potential internal  successors. Plans may include training, professional conferences,  developmental assignments, and other opportunities. OPM officials said  that any profile that indicates that a corporate leadership position is at  high risk for succession management requires an aggressive plan of action  to address how the agency will reduce the risk rating.
In addition, OPM recently implemented a pilot program for closing  potential succession gaps. In early spring of 2007, it launched a knowledge  transfer pilot in its Office of the Chief Financial Officer (OCFO) to  formalize the process for capturing institutional knowledge. According to  OPM, knowledge transfer is a way to capture critical information  necessary to perform program responsibilities and ensure that knowledge  is not lost due to personnel changes, such as retirements, new work  assignments, or temporary absences. The pilot process begins with an  advance set of questions sent to an interviewee, followed by a structured  interview on topics such as duties performed by the incumbent, the  incumbent’s internal and external contacts, statutory requirements of the  work, and required training and skills needed. The goal of the interview is  to be able to provide the incumbent’s current supervisor and successor  with information necessary to continue to carry out work activities. The  OCFO is also working on incorporating into the pilot a database to track  where incumbents’ important electronic and paper files and records are  located. According to an OCFO official, while OPM is still evaluating the  pilot, it has been well received and it is likely that it will be expanded in  the future.
section_title: OPM Lacks a Well- Documented Process of Evaluation for Some of Its Workforce and Succession Planning Efforts, Particularly Its Investment in Training and Development
paragraphs: We have reported on the importance of evaluating the contribution that  workforce plans make to strategic results in order to measure the  effectiveness of an agency’s workforce plan and to help ensure that the  strategies work as intended. This involves two activities: determining (1)  how well the agency implemented its workforce plan and (2) the  contribution that the implementation made toward achieving  programmatic goals. For example, a workforce plan can include measures  that indicate whether the agency executed its hiring, training, or retention  strategies as intended and achieved the goals for these strategies, and how  these initiatives changed the workforce’s skills and competencies. With  regard to training and development, which are key to each of the OPM gap  closure plans we reviewed, we have reported that front-end analysis can  help ensure that agencies are not initiating these efforts in an  uncoordinated manner, but rather that they are strategically focusing their  training efforts on improving performance to achieve the agency’s goals.
A CHCMS official representing OPM on its workforce and succession  planning process reported that the agency’s plans are largely developed at  the division level and are periodically evaluated by the ERB and the  agency director. The official noted that these reviews are informal and are  not documented or summarized in agency-level status reports. He further  explained that OPM provides agency-level workforce analysis data, such  as trends in hiring and turnover, to division heads and other top executives  at least annually as part of the PMA reporting process. In addition, the  official noted that, while there is no formal process for periodically  distributing division-level workforce analysis reports, OPM can generate  these data on demand and agency leaders and division heads can request  this information at any time as the need arises. However, OPM had  difficulty providing us with some of its key workforce analysis indicators,  which OPM officials explained was partially due to technical difficulties  with the reporting system.
Regarding OPM’s training and development efforts, in its January 2004  comments on our report on designing training and development, OPM  noted that it had increased the role of its CHCO to serve as an advisor to  the Director on overall employee training and development initiatives and  programs, as well as the establishment of the agency’s training budget.  OPM viewed this move as a strategic approach to better position the  agency to prioritize its training needs and forecast funds to support those  needs. OPM has also recognized the importance of bringing a perspective  to training and development activities, particularly with regard to  prioritizing among training needs and forecasting funds to support those  needs. More recently, OPM acknowledged the importance of tracking  training and development investments when it announced a requirement  that agencies must begin regularly submitting data on the cost and amount  of training they provide their employees. Specifically, OPM now requires  agencies to report, among other items, the names of employees receiving  training; the title of the classes; the start and end dates; the facility where  courses were offered, such as a government agency or university; the  number of hours; cost; travel costs; and category, such as leadership  development. An OPM official said that the HCLMSA division would  monitor data and work with agencies to ensure they are using training  dollars for succession planning and to fill critical skills gaps, as well as to  improve performance management. In September 2006, OPM also issued a  guide for collection and management of training information that  emphasizes that agencies must manage and collect training information in  support of mission objectives and strategic goals and must properly  evaluate training to ensure it provides meaningful contributions to agency  results.
When we asked for management reports or a similar means for OPM’s top  management to track information on training activity, however, CHCMS  was unable to provide us with this information. OPM’s budget office  provided aggregated annual training expenditures through its accounting  system, but had no accompanying information on, for example, how many  employees had received training or the type of training or professional  development completed. When we requested status reports on training  and development activity, program completion rates, or other examples of  indicators of how implementation is progressing, an OPM official  explained that this was not tracked at the agency level. An OPM official  explained that while the agency has improved its training and  development tracking, he anticipates being able to do better in the coming  year. OPM had expected that its management would be able to use the  Enterprise Human Resources Initiative (EHRI) data warehouse to generate  information on training activity and expenditures as early as a year ago.  While CHCMS had begun tracking training instances for OPM employees  in its human resources data system by December 2006, OPM was  dependent on the General Services Administration to build the interface to  allow transmission of those data to the EHRI data warehouse. The  interface to allow transmission of the data to EHRI was completed in July  2007.
In addition to gathering data on measures such as participant number and  program costs, we have reported that agencies also need credible  information to evaluate how training and development programs affect  organizational capacity. Agencies should work toward demonstrating their  training and development programs’ value in providing future talent by  identifying outcome-oriented measures and evaluating the extent to which  these programs enhance their organizations’ capacity.
In terms of OPM’s allocation of training resources, an OPM budget official  explained that as a rule of thumb, the agency budgets no more than 2  percent of its salary and benefit levels, and that more recently, it has held  training expenditures to less than 1 percent. He further explained that a  reallocation of internal funds to OPM’s retirement systems modernization  project resulted in a 5 percent decline of agencywide spending on  discretionary activities, leaving a 25 percent cut to the less than 1 percent  allocation for fiscal year 2007 training activities. In addition to other  reductions within the agency, OPM may make similar cuts to the fiscal  year 2008 training budget. Although a CHCMS official told us that OPM is  increasing its use of in-house training and development opportunities such  as job shadowing and mentoring programs, which he believes can be more  effective than outside training, we were unable to ascertain OPM’s full  investment in internal training and development programs since the  budget tracking information does not include indirect costs. As we  mentioned previously, however, survey results show that OPM employees  are not satisfied with their training and addressing this concern is a focus  of OPM’s 2006 FHCS action plans. An OPM budget official noted that the  agency is moving to a strategic budget process. Beginning with the fiscal  year 2009 budget, OPM is requiring that internal budget requests, such as  those for training and development and other succession management  activities, be linked explicitly to OPM’s agencywide strategic objectives.
It is also not evident how OPM is able to identify the appropriate level of  investment in training and development and to optimize funding so that it  addresses the most important needs first with its individual, position- based succession planning. The direct supervisor of the incumbent  executive, manager, or supervisor completes the individual action plans  for the training and development of the successor candidate pool.
Although the ERB provides oversight for this process, an OPM official  explained that division-level management is responsible for making  decisions concerning if and how to invest resources across most of the  training and development needs identified in the position profile sheets.
section_title: Conclusions
paragraphs: OPM is making progress in addressing issues indicated by the employee  responses to both the 2004 and 2006 FHCS, with initiatives underway to  attempt to build a positive and productive work climate in the agency.  During the past year, OPM has taken positive actions to address specific  concerns raised by employees and managers in the surveys, such as  placing more emphasis on information sharing with employees at all levels  on the strategic goals and objectives of the agency. This should help  employees and managers enhance individual and organizational  performance. It is also important to acknowledge that OPM’s 2006 FHCS  results, without the DOD investigative service transfers, would have been,  in many cases, significantly more positive than in 2004. The responses  from the investigative services division, however, are an area of concern  that OPM will need to continue to focus attention on.
OPM also has strategic workforce and succession management plans in  place that adhere to selected leading practices, and the agency has  undertaken several initiatives to address human capital problems  identified and to build on recognized strengths. As previously noted, OPM  has implemented an innovative knowledge transfer pilot and is launching  an agencywide individual development plan program, a professional  development program, and supervisory training plans that include a  curriculum intended to improve interpersonal skills, performance  management, and other key competencies needed for a successful  management environment. With its new approach to strategic budgeting  for fiscal year 2009, OPM is also making strides in linking budget and  program implementation information to its strategic goals, to aid its  management in making decisions on workforce and succession  management investments. OPM’s CHCMS division also expects to monitor  training implementation and expenditures more closely as it expands its  use of the EHRI system in the coming year.
Even though OPM has acknowledged the importance of an agencywide  perspective on workforce and succession planning and implementation  with the establishment of the ERB and by pointing to an increased role for  its CHCO, the agency has not documented well the coordination of some  of these division-level activities. In a relatively short time there will be a  Presidential transition, and well-documented processes can help to ensure  a seamless transition that builds on the current momentum. Without a  well-documented process in place for OPM’s top leadership to review and  monitor progress made at the division level, there is also a risk that the  agencywide approach to strategic human capital management could be  diminished. For example, OPM lacks information on direct and indirect  costs of its training and development programs. Because these actions are  essential to OPM’s gap closure strategy for its mission critical workforce  and succession management efforts, it is vital to the success of these  efforts that the agency invests in training and development wisely. Without  an agencywide view of how training investments relate to the agency’s  overall mission and strategic objectives, OPM may have difficulty  understanding reasons for shortfalls in meeting its talent management  goals and cannot effectively make a business case for prioritizing one set  of training activities over another, which is increasingly important given  tightening budget constraints.
section_title: Recommendation for Executive Action
paragraphs: To help OPM continue down its path of improvement with regard to  internal capacity for strategic human capital management, we recommend  that the Director of OPM institute a documented process for OPM’s top  leadership to monitor workforce and succession efforts carried out at the  division level, to help ensure an agencywide perspective on workforce and  succession funding, implementation, and evaluation. For example, OPM  could document and report on how training and development budget  requests are reviewed by agency’s corporate leaders—such as the Chief  Human Capital Officer or other decision makers in a position to identify  the appropriate level of investment in training and development efforts  across divisions—so that funding is prioritized according to the greatest  needs relative to the agency’s overall mission and objectives.
section_title: Agency Comments
paragraphs: In written comments on a draft of this report, reprinted in appendix IV, the  Director of OPM agreed with our recommendation and acknowledged that  its work must sustain and build upon its current momentum in addressing  strategic and operational human capital challenges. The Director also  noted that the insights and recommendation provided in the report will be  useful in shaping both ongoing and planned human capital management  initiatives within the agency.
We are sending copies of this report to the Director of OPM and  appropriate congressional committees. We will also provide copies to  others upon request. In addition, the report will be available at no charge  on the GAO Web site at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-6806 or mihmj@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. GAO staff who made major contributions to this  report are listed in appendix V.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: The objectives of our review were to    determine the extent to which the Office of Personnel Management (OPM)  has addressed key internal human capital management issues identified by  examining employee responses to the 2004 and 2006 Federal Human  Capital Surveys (FHCS) and    determine the extent to which OPM has strategies in place to ensure it has  the mission critical talent it needs to meet current and future strategic  goals.
To address these objectives, we analyzed OPM’s 2004 and 2006 FHCS  results and summaries of its 2005 focus groups related to the key areas of  leadership, performance culture and accountability, and talent  management to determine whether OPM has made progress in addressing  areas of concern from the 2004 survey. We identified these key areas as  critical for human capital development in order for OPM to continue to  transform itself to being a more effective leader of governmentwide  human capital reform. The areas differ slightly from the four Human  Capital Assessment and Accountability Framework (HCAAF) indices and  represent a somewhat different grouping of survey items than the indices.  We also analyzed OPM’s 2006 survey results to identify any new challenges  to OPM’s strategic human capital management. In analyzing the data, we  performed significance tests with corrections for multiple, simultaneous  comparisons. Not all comparisons of 2004 and 2006 results were made  because some questions were dropped from the 2004 survey and not  included in the 2006 survey. We combined responses (for example,  strongly agree and agree) to calculate the overall positive response of  OPM employees, and we combined responses (for example, strongly  disagree and disagree) to calculate the overall negative response of OPM  employees. After an examination of documents detailing the survey  methodology, we found the survey data to be sufficiently reliable for the  purposes of this report.
To address our second objective, we obtained key strategic and human  capital planning documents and analyzed the extent to which OPM  adheres to selected strategic workforce planning practices and principles  relevant to OPM’s capacity to fulfill its strategic goals. We focused  primarily on examining Senior Executive Service (SES) positions and  positions from the two OPM divisions with the most responsibility for  working with federal departments and agencies to assist them effectively  with their human capital efforts: the Strategic Human Resources Policy  (SHRP) and the Human Capital Leadership and Merit System  Accountability (HCLMSA) divisions. We obtained and analyzed strategic,  human capital, workforce, succession, and training and development plans  along with executive performance contracts. We reviewed individual  succession planning position profile sheets for all supervisors, managers,  and executives in SHRP and HCLMSA, along with all career SES  incumbents throughout the agency except those from the Office of the  Inspector General.
We also had discussions with and obtained other pertinent documentation  from OPM officials at their headquarters in Washington, D.C. We  conducted interviews with key officials at OPM to discuss workforce  planning and succession planning, and we met with the associate directors  of SHRP and HCLMSA. In addition, we reviewed OPM’s own guidance to  executive branch agencies such as the HCAAF, along with prior GAO work  on leading practices in succession and workforce planning. The scope of  our work did not include independent evaluation or verification of the  effectiveness of the workforce and succession management planning used  at OPM, including any performance results that OPM attributed to specific  practices or aspects of its action plans.
We conducted our review in Washington, D.C., from December 2006  through August 2007 in accordance with generally accepted government  auditing standards.
section_title: Appendix II: Selected Survey Questions and Data on the Federal Human Capital Survey
subsections: section_title: Survey Items Corresponding to Federal Human Capital Survey (FHCS) Key Areas
paragraphs: Q. 9: Overall, how good a job do you feel is being done by your immediate supervisor/team leader?
Q. 36: I have a high level of respect for my organization’s senior leaders.
Q. 37: In my organization, leaders generate high levels of motivation and commitment in the workforce.
Q. 38: My organization’s leaders maintain high standards of honesty and integrity.
Q. 39: Managers communicate the goals and priorities of the organization.
Q. 51: Managers promote communication among different work units (for example, about projects, goals, needed resources).
Q. 55: How satisfied are you with the information you receive from management on what’s going on in your organization?
Q. 57: How satisfied are you with the policies and practices of your senior leaders?
Q. 4: I feel encouraged to come with new and better ways of doing things.
Q. 22: Promotions in my work unit are based on merit.
Q. 23: In my work unit, steps are taken to deal with a poor performer who cannot or will not improve.
Q. 24: Employees have a feeling of personal empowerment with respect to work processes.
Q. 26: Creativity and innovation are rewarded.
Q. 28: Awards in my work unit depend on how well employees perform their jobs.
Q. 29: In my work unit, differences in performance are recognized in a meaningful way.
Q. 30: My performance appraisal is a fair reflection of my performance.
Q. 31: Discussions with my supervisor/team leader about my performance are worthwhile.
Q. 32: I am held accountable for achieving results.
Q. 40: Managers review and evaluate the organization’s progress toward meeting its goals and objectives.
Q. 56: How satisfied are you with the recognition you receive for doing a good job?
Q. 2: I am given a real opportunity to improve my skills in my organization.
Q. 11: The workforce has the job-relevant knowledge and skills necessary to accomplish organizational goals.
Q. 14: My work unit is able to recruit people with the right skills.
Q. 15: The skill level in my work unit has improved in the past year.
Q. 16: I have sufficient resources (for example, people, materials, budget) to get my job done.
Q. 47: Supervisors/team leaders provide employees with constructive suggestions to improve their job performance.
Q. 48: Supervisors/team leaders in my work unit support employee development.
Q. 59: How satisfied are you with the training you receive for your present job?
section_title: Appendix III: OPM Succession Planning Position Profile—Annotated with Instructions
section_title: Appendix IV: Comments from the Office of Personnel Management
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: Acknowledgments
paragraphs: In addition to the contact named above, key contributors to this report  were William Doherty, Assistant Director; Ami Ballenger; Laura Miller  Craig; Judith Kordahl; and Katherine Hudson Walker. In addition, Barbara  Hills; Donna Miller; Beverly Ross; and John Smale provided key  assistance.