Federal Personnel:

Observations on the Navy's Personnel Management Demonstration Project

GGD-88-79: Published: May 3, 1988. Publicly Released: May 3, 1988.

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Pursuant to a congressional request, GAO reported on the Navy's personnel management demonstration project at two of its laboratories, focusing on the project's relevance to the proposed Defense Industry and Technology Act of 1988 (S. 2254).

GAO found that the project: (1) changed position classification, performance appraisal, and pay procedures; (2) allowed greater managerial control over personnel functions; (3) expanded employee opportunities; (4) demonstrated the workability of and general employee satisfaction with a pay-for-performance system; (5) increased salary costs by about 1 percent each year; (6) showed that line managers could properly make personnel decisions; and (7) did not provide sufficient data to support the Office of Personnel Management's (OPM) conclusion that it successfully met its objectives of enhanced laboratory effectiveness, greater managerial flexibility, improved employee recruitment and retention, and applicability to other organizations. GAO also found that the proposed legislation would: (1) enable the Department of Defense (DOD) to apply this alternative personnel system to its acquisition and logistics employees; and (2) include a budget-neutral implementation of the system, with no net increase in salary and administrative costs.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Congress did not pass proposed legislation expanding the China Lake concept to DOD acquisition installations.

    Matter: Regarding future alternative personnel system projects, the Senate Committee on Governmental Affairs, Federal Services, Post Office and Civil Service Subcommittee, should consider a series of projects smaller than those envisioned in S. 2254 in several locations throughout the country to test various design features and determine the applicability of the findings to other settings. Legislation should require that these projects be systematically evaluated and that the adequacy of the evaluation be carefully monitored.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: OPM fully concurred; stating that it is closely monitoring the implementation and evaluation of recently implemented projects to ensure that they process according to plan.

    Recommendation: The Director, OPM, should: (1) ensure that future personnel system demonstration projects are carefully evaluated and fully documented; and (2) arrange for such evaluations to be closely monitored to ensure that they are implemented as designed, and that appropriate alternatives are developed and implemented if there are problems in executing the original evaluation.

    Agency Affected: Office of Personnel Management


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