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Human Capital: Aligning Senior Executives' Performance with Organizational Results Is an Important Step Toward Governmentwide Transformation

GAO-06-1125T Published: Sep 26, 2006. Publicly Released: Sep 26, 2006.
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Highlights

The government's senior executives need to lead the way in transforming their agencies' cultures. Credible performance management systems--those that align individual, team, and unit performance with organizational results--can help manage and direct this process. In past work, GAO found that the performance management systems for senior executives fell short in this regard. In November 2003, recognizing that reforms were needed, Congress authorized a new performance-based pay system that ended the practice of giving annual pay adjustments to senior executives. Instead, agencies are to consider such factors as individual results and contributions to agency performance. If the Office of Personnel Management (OPM) certifies an agency's new performance system and the Office of Management and Budget (OMB) concurs, the agency has the flexibility to raise the pay of its highest performing senior executives above certain pay caps. This testimony addresses (1) the performance management system's regulatory structure, (2) OPM's certification process and agencies' views of it, and (3) OPM's role in monitoring the system, and the number of agencies that have been certified to date. This statement is based on GAO's issued work, which included interviews with senior OPM officials, agency Chief Human Capital Officers and Human Resource officers, and reviews of agency documents.

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Agency protocolsCertification and accreditationEvaluation criteriaFederal agenciesGovernment employeesHuman capitalPay for performancePerformance managementPerformance measuresPerformance-based paySenior Executive Service