	Background

In November 2003, Congress authorized a new performance-based pay  system for members of the SES. While Education, HHS, and  NASA have undertaken important and valuable efforts to link their career  senior executive performance management systems to their organizations’  success, senior executives’ perceptions indicate that these three agencies  have opportunities to use their career senior executive performance  management systems more strategically to strengthen that link. Conclusions

Senior executives need to lead the way for federal agencies to transform  their cultures to be more results oriented, customer focused, and  collaborative in nature to meet the challenges of the 21st century. Performance management systems can help manage and direct this  transformation process. In addition, as the administration is  about to implement a performance-based pay system for the SES, valid,  reliable, and transparent performance management systems with  reasonable safeguards are critical. The experiences and progress of  Education, HHS, and NASA should prove helpful to those agencies as well  as provide valuable information to other agencies as they seek to use senior  executive performance management as a tool to drive internal change and  achieve external results. Objective, Scope, and Methodology

To meet our objective to assess how well selected agencies are creating  linkages between senior executive performance and organizational success  through their performance management systems, we applied the key  practices we previously identified for effective performance management. We selected the Department of Education, the Department of Health and  Human Services (HHS), and the National Aeronautics and Space  Administration (NASA) for our review to reflect variations in mission, size,  organizational structure, and use of their performance management  systems for career senior executives. Link pay to individual and organizational performance.
Why GAO Did This Study

Congress and the administration have established a new performance-based pay system for members of the Senior Executive Service (SES) that is designed to provide a clear and direct linkage between SES performance and pay. Also, GAO previously reported that significant opportunities exist for agencies to hold the SES accountable for improving organizational results. GAO assessed how well selected agencies are creating linkages between SES performance and organizational success by applying nine key practices GAO previously identified for effective performance management. GAO selected the Department of Education, the Department of Health and Human Services (HHS), and the National Aeronautics and Space Administration (NASA).

What GAO Found

Senior executives need to lead the way to transform their agencies' cultures to be more results-oriented, customer focused, and collaborative in nature. Performance management systems can help manage and direct this process. While Education, HHS, and NASA have undertaken important and valuable efforts to link their career SES performance management systems to their organizations' success, there are opportunities to use their systems more strategically. For example, as indicated by the executives themselves, the agencies can better use their performance management systems as a tool to manage the organization or to achieve organizational goals. As Congress and the administration are reforming SES pay to better link pay to performance, valid, reliable, and transparent performance management systems with reasonable safeguards are critical. Information on the experiences and knowledge of these agencies should provide valuable insights to other agencies as they seek to drive internal change and achieve external results.