Results Oriented Management: Opportunities Exist for Refining the Oversight and Implementation of the Senior Executive Performance-Based Pay System

In March 2011, OMB, in coordination with the Office of Personnel Management (OPM), formed an interagency working group comprised of officials from OPM, OMB, the Departments of Labor and Commerce, and other agencies. The focus of the group is to help streamline the appraisal system certification process, focusing requirements and regulations on a set of priority outcomes and management goals and fostering dialogue and collaboration between OPM/OMB and agencies. In another effort to make the process more efficient for agencies, OMB plans to switch from a paper or email attachment format for certification submissions that is currently followed to a web-based portal with a unique page for each agency. Currently in the process of creating the portal, an OMB official said the agency would have the ability to store its documents electronically with the new portal and update them as needed when renewing its certification without resubmitting documents that have not changed.

In its February 2010 guidance to agencies on the certification process, OPM stated that the requirement for making meaningful distinctions in performance ratings, pay adjustments, rates of pay, and awards is a key criterion affecting certification and only agencies showing meaningful distinctions in performance and pay will receive certification. OPM reminded agencies to ensure that this requirement is communicated clearly to the senior employees, among others involved in the appraisal process. Further, OPM stated that it expects agencies to make meaningful distinctions in awards for senior employees who are paid at the applicable maximum rate of pay by using performance awards to reward high-performing senior employees. In June 2011, an OPM official said OPM has begun to focus agency attention on establishing ratings that reflect organizational performance to help them avoid thinking there is an ideal rating distribution. OPM has not yet addressed the issue of avoiding forced distributions and the value of a fully successful rating in its guidance or broader communications with agencies.

In March 2011, OPM in coordination with the Office of Management and Budget (OMB) established an interagency working group comprised of officials from OPM, OMB, the Departments of Labor and Commerce, and other agencies to help streamline the appraisal system certification process, focus requirements and regulations on a set of priority outcomes and management goals and foster dialogue and collaboration between OPM/OMB and agencies. According to OPM, the working group's final recommendations for improving the use of the SES Performance Appraisal Assessment Tool (SES-PAAT)--an electronic tool agencies use to evaluate how their systems address the certification criteria and submit for certification to OPM--and automating the certification process when and where it is possible are to be made in September 2011. In another effort, through its briefings and guidance to agencies, OPM has requested that agencies electronically submit the documentation for certification reviews and indicated that this format was the preferred method of receiving the information. Also, in an effort to promote increased efficiencies, OPM expanded the use of the SES-PAAT from only agencies with full certification to all agencies requesting initial or continued certification.

OPM has further explained to agencies how the correlations between ratings and pay are being used to determine how the agency is addressing the certification criteria through two formats. First, in its current instructions for using the SES Performance Appraisal Assessment Tool for certification submissions, OPM clarified the correlation coefficient score (0.7 to 1.0) that is needed to receive full points for addressing the pay differentiation criteria and the score (0.5 to 0.699) needed to just meet the criteria, but receive fewer points. In its January 2010 briefing with agency officials on SES issues, OPM explained how the coefficient was calculated and according to an OPM official, how it is one of many factors used in certification decisions. At this briefing, OPM also provided summary statistics on the distribution of coefficients for selected agencies over a three year period.

USAID concurred with this recommendation when responding to the draft report for agency comments. At the end of fiscal year 2008 appraisal cycle, USAID provided its PRB members and other reviewing officials with uniform organizational performance assessments, such as the Performance and Accountability Report, Program Assessment Rating Tool results, and other key individual operating unit reports. According to a USAID official, these documents were provided at the performance review board (PRB) meeting on November 17, 2008.