Human Capital:

Questions for the Record Related to the Implementation of the Department of Defense's National Security Personnel System

GAO-09-669R: Published: May 18, 2009. Publicly Released: May 18, 2009.

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This letter provides answers to questions for the record. Questions from Chairman Ortiz include: (1) What steps could have been taken to roll out NSPS in a more orderly and fair fashion and if NSPS continues, what steps should now be taken to move forward? (2) As DOD and OPM leadership hold discussions to determine the overall framework, scope, and timeline of the review, what guidance or suggestions would you give to DOD and OPM to include in the methodology of this study? (3) Under the GS system, an employee steadily moves up through the various grades and can actually monitor actual career progression. There appears to be no such similar movement in NSPS; an employee, while receiving pay increases and bonuses, may remain in the same pay band for his/her entire career. If this is a valid concern, how can it be addressed, if NSPS continues? Questions from Representative Forbes include: (1) Based on the GAO testimony, one safeguard GAO believes needs to be implemented to increase employee confidence in the pay for performance system is for DOD to have a third party analyze the pay-pool recommendations for "anomalies" before any final decision is made to determine whether an employee's rating accurately reflects the employee's performance and whether any non-merit based factors contributed to the "anomaly." Explain how GAO sees this third party analysis working. (2) In GAO's view, who would the third party be, a DOD entity or a non-DOD entity? (3) What criteria does GAO see as constituting an anomaly? (4) In investigating "blatant discrimination" or "egregious decisions" would the employee be contacted and interviewed? (5) Would a single third party be evaluating all 1,600 pay pools across DOD to get a DOD wide view of anomalies, or would 1,600 third-party reviews be conducted at each pay pool without regard for a comprehensive DOD look? (6) What effect would the third-party analyses have on the timeliness of the pay-pool process? (7) Would the pay pool decisions on all the other employees in the pay pool be held up until the "anomaly" was resolved? (8) How would GAO see the anomaly being corrected - a directive to the rater to change the rating, or some disciplinary action against the rater, or some other form of corrective action? (9) Does GAO see any appeal rights for the manager or employee involved in the "anomaly"?

Answers to Chairman Ortiz's questions: (1) One key need is to modernize performance management systems in executive agencies so that they are capable of adequately supporting more performance-based pay and other personnel decisions. DOD needs to assess and address employee engagement in the system. DOD has collected survey data and conducted focus groups of employees under NSPS, but it is missing a key piece--an action plan. (2) Moving forward, as DOD and OPM embark on a study of NSPS and review how NSPS operates and its underlying policies, DOD has a unique opportunity to consider our previous recommendations, as well as all of the other internal safeguards key to ensuring that performance management systems in the government are fair, effective, and credible. In addition to a review of internal safeguards, this study provides DOD the opportunity to look at employee engagement in the process and develop an action plan to address employee concerns about NSPS. (3) DOD needs to collect more information on what the issues are surrounding this employee perception on career progression, including the underlying causes and the extent of this concern, so that the department can determine if it is indeed a valid concern. Answers to Chairman Forbes' questions: (1) Given that each agency has its own set of unique challenges and its own approach for handling those challenges, we believe that the department is in the best position to determine how to appropriately design and implement a predecisional analysis for NSPS. (2) We would expect the third party to be a DOD entity that is removed from the chain of command--that is, the human capital office or an office of opportunity and inclusiveness. (3) An anomaly would be characterized as a set of ratings for which there is a statistically significant difference in comparison to the larger group. Please see GAO-09-669R for more information. (4) The predecisional reviews are to help achieve consistency in the performance management process and provide reasonable assurance that the performance decisions are merit-based and fair. Due to the nature of the investigation, the employee would not be contacted during an investigation. However, information provided by employees, such as the self-assessment, can be considered during the review process, as could information provided by responsible managers regarding underlying reasons for any anomalies. (5) Each agency has its own set of unique challenges and its own approach for handling those challenges. As a result, we feel that the department is in the best position to determine how to appropriately design and implement a predecisional analysis for NSPS. (6) It would likely add time to the existing process. However, we believe that it is important that DOD take steps to ensure that its employees' ratings are perceived as fair reflections of their performance. (7) Given that the predecisional review is intended to take place prior to the ratings being finalized but before they are certified and released to employees, all other ratings would not be released until the predecisional review was completed and appropriate responses (which could include inaction) were determined for any anomalies identified. (8) Where managers provide information that explains the merit-based factors and reasons for the anomalies, the managers would not change the ratings. On the other hand, managers could determine that some vital information was not considered that would provide a basis for changing the rating. (9) Although the third-party reviewer identifies the anomalies, it is the responsible manager that examines the basis underlying the ratings and is held accountable for ensuring the ratings are merit based. Please see GAO-09-669R for further information.

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