To qualify for these pay flexibilities, OPM must certify and OMB must  concur that an agency’s senior executive performance appraisal system  meets certification criteria jointly developed by OPM and OMB. Key Lessons Learned from the Senior Executive Performance-based Pay System and Other Human Capital Initiatives

The congressionally authorized senior executive performance-based pay  system, implemented in 2004, as well as OPM’s implementation of other  governmentwide human capital initiatives, provides an opportunity to  learn from experiences gained and apply those lessons to the  implementation of future human capital reforms. As OPM is likely to play a  similar leadership and oversight role in future reforms, the following  lessons learned may also assist OPM as it moves forward in the design and  implementation of other human capital reforms and initiatives. OPM also gathers agency feedback through the  CHCO Council and executive resource forums. Conclusions

Significant reforms are already underway to modernize the federal  government’s human capital management systems to better position  agencies to meet the challenges of the 21st century. OPM’s workforce and succession planning efforts are also  vital to ensuring it has the internal capacity to lead and implement  reforms. We reviewed and  analyzed key documents including the legislation that authorized the new  senior executive performance-based pay system and the regulations for  the appraisal system certification process that were jointly issued by OPM  and the Office of Management and Budget (OMB).
Why GAO Did This Study

As the agency responsible for the federal government's human capital initiatives, the Office of Personnel Management (OPM) must have the capacity to successfully guide human capital transformations necessary to meet the governance challenges of the 21st century. Given this key role, GAO was asked to assess OPM's capacity to lead further reforms. In June 2006, GAO testified on several management challenges that OPM faces. This report--the second in a series--supplements that testimony and, using the new senior executive performance-based pay system as a model for understanding OPM's capacity to lead and implement reform, identifies lessons learned that can inform future reforms. GAO analyzed relevant laws and documents, and obtained views from the Chief Human Capital Officers (CHCO) Council and human resource directors, the Office of Management and Budget (OMB) staff, and OPM officials.

What GAO Found

The congressionally authorized senior executive performance-based pay system, implemented in 2004, provides an opportunity to learn from experiences gained and apply those lessons to the design and implementation of future human capital reforms. Under the performance-based system, before an agency can receive the new pay flexibilities, OPM, with concurrence from OMB, must certify that the agency's appraisal system meets certain criteria. OPM is likely to play a similar leadership and oversight role for future reforms.