Based on federal managers’ responses on our four governmentwide surveys conducted over the past 10 years, performance planning and measurement have slowly, yet increasingly, become a part of agencies’ cultures. In particular, as shown in figure 1, significantly more federal managers today report having the types of performance measures called for by GPRA and PART than they did 10 years ago. However, unless federal managers use performance data to make management decisions and to inform policymakers, the benefit of collecting performance information cannot be realized and real improvement in management and program results are less likely to be achieved. We have found that despite having more performance measures, the extent to which managers make use of this information to improve performance has remained relatively unchanged. As shown in figure 2, seven of the nine categories of management activities we asked about showed no significant change over the past 10 years. In particular, despite efforts through GPRA and PART to help government better inform resource allocation decisions with performance information, over the past decade, there has been no significant shift in the percent of managers reporting they use information obtained from performance measurement when allocating resources. In addition, contract management remains the management activity with the least reported use of performance information, despite recommendations for better management of federal contracts from Congress and GAO and efforts to improve contract management through the PMA Competitive Sourcing Initiative. In 2007, 41 percent of managers reported that they use performance information when developing and managing contracts, a 3 percentage point increase from 2000, when we first asked the question. Given the growing fiscal imbalance, the government must get the best return it can on its investment in goods and services by improving its development, management, and assessment of contracts; using performance information in these activities can help to focus contract management on results. Of interest, there were two areas relating to managers’ use of performance information in management decision making that did change significantly between 1997 and 2007. First, there was a significant decrease in the percentage of managers who reported that their organizations used performance information when adopting new program approaches or changing work processes. Performance information can play a valuable role in highlighting the need to take a closer look at the effectiveness of existing approaches and processes. Such an examination could lead to identifying needed changes to bring about performance improvements. Second, there was a significant increase in the percentage of managers who reported that they reward the employees they manage or supervise based on performance information. We believe this is an important development that can play a role in getting managers to pay attention to their performance; we will discuss this in more detail later in this statement. While in general there has been little change in federal managers’ reported use of performance information governmentwide, agency level comparisons between 2000 and 2007 reveal that some agencies have made notable progress. For example, over the last 7 years, the Nuclear Regulatory Commission (NRC) showed a significant increase in positive responses to eight questions related to use of performance information in management activities. At the same time, DOD showed no change in their responses to questions related to the use of performance information and the Small Business Administration (SBA) reported significantly lower use of performance in 2007 than 2000 on two questions. As seen in table 1, the range of use also varied considerably among agencies with Forest Service (FS) and Department of the Interior (Interior) managers among the lowest users, and the Social Security Administration (SSA) and National Aeronautics and Space Administration (NASA) among the highest. The PART has been used by the current administration to increase the government’s focus on improving program performance results. Specifically, OMB includes an assessment of whether programs use performance information for program management as one element of its overall program assessment. In judging agency progress on the Performance Integration Initiative of the PMA, OMB also considers whether PART findings and performance information are used consistently to justify funding requests, management actions, and legislative proposals. However, of the federal managers familiar with PART, a minority—26 percent—indicated that PART results are used in management decision making, and 14 percent viewed PART as improving performance. As our survey results show, despite legislative and administration efforts to focus federal management decisions on the achievement of results and maximize the use of federal funds, changing the way federal managers make decisions is not simply a matter of making program performance information available. Based on our work on management reform efforts as well as analysis of federal managers’ responses to our surveys over the past 10 years, we have identified three key practices that can contribute to greater attention to results when making management decisions. Regardless of the form of future initiatives, the next administration should take steps to ensure that agencies emphasize these practices to make sure that performance information is used in management decision making: 1. demonstrate leadership commitment to results-oriented management; 2. create a clear “line of sight” linking individual performance with 3. build agency capacity to collect and use performance information. Perhaps the single most important element in successfully implementing organizational change is the demonstrated, sustained commitment of top leaders. Leaders can demonstrate their support for results-oriented management and facilitate the use of performance information by agency managers through frequent and effective communication of performance information. On our survey, we found a positive relationship between agency managers who reported that performance information is effectively communicated on a routine basis and managers’ reported use of performance information in key management activities—in other words, greater communication of performance information is associated with greater use. Leaders can communicate performance information in their organizations by promoting the use of visual tools such as poster displays, performance scorecards, and intranet sites. In prior reviews, officials have told us that publicizing performance information can inspire a greater sense of ownership on the part of employees in their unit’s performance; it can also spur competition between units. Additionally, we found that frequently reporting performance information can help to identify program problems before they escalate, identify the factors causing the problems, and modify services or processes to try to address problems. Leaders can play a key role in this process by following up on problems identified during discussions of performance information and by holding managers accountable for addressing the problems. From 1997 to 2007, we saw a significant increase in the percent of managers—from 57 to 67 percent—-who reported that top leadership demonstrates a strong commitment to achieving results (see fig. 3.). Our survey results confirm the relationship between leadership commitment to results-oriented management and managers’ reported use of performance information in key management activities, such as developing program strategy and making decisions about funding or allocating resources. Similarly, managers who believed their immediate supervisor paid attention to the use of performance information in decision making also perceived that managers at their level made greater use of performance information. Regarding the contribution of PART to improving this practice, 37 percent of federal managers familiar with PART reported that upper management has paid greater attention to performance and achieving results. More than any other items we asked about concerning the effect of PART, this item received the greatest degree of endorsement from federal managers. To be successful, governmentwide performance improvement initiatives must ensure that all employees involved in the process understand the rationale for making the changes and their role and responsibility in the process. Performance management systems are a vital tool for managing and directing such organizational transformations because they create a “line of sight” showing how team, unit, and individual performance can contribute to overall organizational results. Additionally, performance management systems can be used to hold employees accountable for achieving and incorporating results into management and employee decision making. Over the past 10 years, we found positive trends in federal managers’ responses to several questions relating to how agencies are managing their employees, which agencies can build upon to further emphasize the importance of managing by results (see fig. 4.). Specifically, we saw a statistically significant increase—from 53 percent in 1997 to 61 percent in 2007—in the percentage of federal managers that reported using performance information when rewarding government employees they manage. Additionally, a significantly higher number of federal managers reported that employees in their agency receive positive recognition for helping the agency accomplish its strategic goals from 1997 to 2007. At the same time, an increasing portion of senior executives report they are being held more accountable for results. In recent years, Congress and the administration modernized the performance appraisal and pay systems for senior executives by requiring a clearer link between individual performance and pay. Specifically, agencies are allowed to raise Senior Executive Service (SES) base pay and total compensation caps if their performance appraisal systems are certified by the Office of Personnel Management (OPM) with concurrence by the Office of Management and Budget (OMB) as, among other things, linking performance for senior executives to the organization’s goals and making meaningful distinctions based on relative performance. In our past work on performance management and pay issues, we have reported that performance-based pay cannot be simply overlaid on most organizations’ existing performance management systems. Rather, as a precondition to effective pay reform, individual expectations must be clearly aligned with organizational results, communication on individual contributions to annual goals must be ongoing and two-way, meaningful distinctions in employee performance must be made, and cultural changes must be undertaken. Most important, leading organizations have recognized that effective performance management systems create a “line of sight” showing how unit and individual performance can contribute to overall organizational goals and can help them drive internal change and achieve external results. Effective performance-management systems that hold executives accountable for results can help provide continuity during times of leadership transition, such as the upcoming change in the administration, by maintaining a consistent focus on organizational priorities. Interestingly, since our 2003 survey, SES responses regarding accountability show a significant increase. Between 2003 and 2007, there was a 14 percentage point increase in the number of SES who responded that managers/supervisors at their level are held accountable for accomplishment of agency strategic goals. In 2007, there was a 12 percentage point increase in the number of SES who reported that they are held accountable for the results of the programs, operations, or projects for which they are responsible as compared to 2003 (see fig. 5.). There was no significant change in responses from 2003 to 2007 in non- SES level responses to either of these questions.