Actions Needed To Enhance the Credibility of Senior Executive Service Performance Award Programs

FPCD-81-65: Published: Sep 30, 1981. Publicly Released: Sep 30, 1981.

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GAO reviewed the Senior Executive Service (SES) performance and rank awards paid as of June 1981. The objectives of the review were to: (1) gather statistical data on performance and rank awards to determine if agencies were in compliance with the law and with the Office of Personnel Management's (OPM) guidance, (2) assess the validity and effectiveness of methods and criteria that agencies use in making award payments, (3) examine the composition and functioning of agencies' performance review boards, and (4) identify any changes that may be necessary to enhance the award process.

The agencies reviewed generally appeared to be making reasonable efforts to administer and refine workable performance award systems. Congress, senior executives, and the press have criticized the administration of SES awards. One of the major criticisms has been that upper level executives have received a disproportionately large share of awards. A related criticism has been that factors other than performance have been used to determine performance award recipients. Another criticism has been that the performance review board members, who review and make recommendations on ratings and performance awards, have granted themselves awards. Still another criticism has been that agencies consistently have granted the maximum number of allowable awards. In addition, GAO noted two other issues that needed attention: (1) the desirability of, and purpose served by, including reemployed annuitants in SES, thereby making them eligible for awards; and (2) the methods agencies use in determining the maximum allowable number of performance awards. If SES performance awards are to serve their intended purposes of rewarding outstanding performance and encouraging excellence and higher productivity, it is essential that they be viewed more favorably, particularly by the senior executives themselves. Therefore, GAO believed that the criticisms and issues needed to be addressed.

Recommendation for Executive Action

  1. Status:

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Director of OPM should assume responsibility for approving agencies' performance review board policies, procedures, and criteria for performance rating and award recommendations as part of the agencies' performance appraisal systems. Such approval should insure that agencies: (1) use performance, not other factors, as the basis for determining performance ratings and to identify Senior Executive Service members deserving of award; and (2) structure agencies' performance review boards so that members cannot recommend themselves for award. Also, the Director of OPM should: (1) reconsider the award eligibility of reemployed annuitants; (2) clarify the method agencies should use to compute the maximum allowable number of awards that can be paid; (3) study and report to Congress on the optimal number and size of performance awards that should be granted to achieve the objectives for which they are intended; and (4) develop a strong monitoring effort through the OPM data collection system and compliance visits to agencies to help insure that valid statistics on the entire performance rating and award system exist and that performance award systems are creditable and equitable.

    Agency Affected: Office of Personnel Management


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