CFPB was established as an independent bureau within the Federal  Reserve System. For example, in January 2014, CFPB management reached  agreement with the employee union to develop a new performance  management system. Employees Reported Positive Aspects about CFPB but Also Concerns about Personnel Management, Fairness, and Trust

CFPB employees who responded to our survey for nonexecutive  employees identified strengths and areas for improvement related to  personnel management and organizational culture at CFPB. For several questions in these areas, more than 25 percent  of respondents had unfavorable views and the proportion of unfavorable  responses was above 35 percent in some CFPB offices and for some  minority respondents, female respondents, respondents 40 years of age  and over, and respondents who did not specify a race. In addition, about 81 percent  of respondents agreed that their immediate supervisor respects and  values differences among individuals and that their work teams make  them feel included. CFPB’s 2015 annual employee  survey also showed higher dissatisfaction among black respondents. As shown in table 3, about a third of all respondents disagreed that  success at CFPB is based more on merit than on personal connections to  managers or favoritism. About 18 percent of employees who responded to our survey reported  that they felt they had experienced discrimination at CFPB, and  perceptions of discrimination were around 25 percent or more for some  demographic groups and in the Office of Consumer Response and in a  small office in SEFL. CFPB Has Taken Steps to Improve Personnel Practices in the Past 2 Years, but It Is Too Soon to Assess Their Effect

Partly in response to employees’ expressed concerns about favoritism or  unfair treatment in certain personnel practices—such as hiring,  performance management, promotions, and detail opportunities—as well  as recommendations from the Inspector General and other external  reviews, CFPB has taken steps to review and strengthen its policies and  practices in these areas. Expanding management training related to personnel practices. CFPB has adopted several practices that are  consistent with leading diversity management practices for  measurement. In addition, CFPB’s diversity and  inclusion strategic plan cites the need for performance measures and  for CFPB to communicate its progress and effectiveness on its  diversity and inclusion initiatives. CFPB Does Not Comprehensively Report on Progress Related to Its Diversity, Inclusion, Fairness, and Culture Initiatives

CFPB’s efforts to address employee concerns about diversity, inclusion,  fairness, and culture together represent a significant change management  initiative. However, without a strategy for comprehensively reporting on its  progress across these initiatives, CFPB may miss opportunities to provide  greater transparency and build the employee commitment needed to  sustain progress. CFPB Has Strengthened Its Complaints Processes, but Feedback Mechanisms Do Not Fully Address Employees’ Concerns

CFPB has taken steps to improve its management of employee complaint  processes, such as offering new training to managers and addressing  problems with its tracking of complaints, However, our survey indicated  that as of spring 2015, over half of the respondents who reported  experience with at least one of CFPB’s complaint processes had  concerns that could affect employees’ confidence in using the processes. While CFPB has made progress in strengthening its management of  complaint processes, employee views collected through our survey and  interviews suggest that many employees with experience with CFPB’s  complaint processes lack confidence and trust in CFPB’s management of  these processes. Recommendations for Executive Action

In order to ensure sustained leadership commitment to and accountability  for CFPB’s efforts to promote a diverse, inclusive, and fair workplace, we  recommend that the Director take the following two actions:
Develop and implement a strategy for comprehensively reporting on  the bureau’s implementation goals and progress on its range of  initiatives related to promoting diversity, inclusion, fairness, and a  stronger organizational culture. Appendix I: Objectives, Scope and Methodology

This report examines (1) the Consumer Financial Protection Bureau’s  (CFPB) early efforts as a new agency to establish personnel practices  and organizational culture and challenges it encountered in promoting a  diverse, inclusive, and fair workplace; (2) employees’ views on personnel  management and organizational culture at CFPB; and (3) CFPB’s efforts  to strengthen its personnel management practices and organizational  culture. To assess CFPB’s efforts to strengthen its processes for addressing  employee complaints, we reviewed policies, procedures, and guidance  related to Equal Employment Opportunity complaints and grievances.
Why GAO Did This Study

The Dodd-Frank Wall Street Reform and Consumer Protection Act created CFPB to regulate the provision of consumer financial products and services. In 2014, congressional hearings included testimony from CFPB employees about allegations of discrimination and retaliation, which raised concerns about CFPB's management practices and culture.
GAO was asked to review personnel management and organizational culture issues at CFPB. This report examines (1) CFPB employees' views on these issues and (2) CFPB's efforts to strengthen personnel management and culture, among other objectives.
GAO reviewed relevant CFPB reports, policies, procedures, and other documents; surveyed CFPB employees and executives (with 62 and 63 percent response rates, respectively) to gather their views on CFPB's personnel practices and organizational culture; spoke with CFPB employees who contacted GAO through its phone and email hotlines; interviewed CFPB officials; and reviewed reports and recommendations from the Office of the Inspector General for the Board of Governors of the Federal Reserve System and CFPB.

What GAO Found

Nonexecutive employees at the Consumer Financial Protection Bureau (CFPB) who responded to GAO's survey identified strengths and areas for improvement in CFPB's personnel practices and culture. Most respondents agreed that enthusiasm for CFPB's mission is high and that immediate supervisors respect and value differences among individuals. However, GAO's survey found heightened concerns related to fair treatment, trust that employees can raise concerns without fear of reprisal, confidence in complaint processes, and other matters. For survey items on these issues, more than 25 percent of respondents bureau-wide had unfavorable views, and dissatisfaction was above 35 percent in some CFPB offices and demographic groups. For example, about one-third of respondents disagreed with the statement that success at CFPB is based more on merit than on personal connections or favoritism. Disagreement was 40 percent or more for a few offices that focus on examining institutions and among black respondents.
As part of ongoing improvement efforts and in response to challenges it identified in late 2013 and early 2014, CFPB has worked to strengthen personnel management practices and enhance its diversity and inclusion efforts. In part to address weaknesses in personnel practices that may have contributed to perceptions of unfair treatment, CFPB has expanded management training, developed new guidance on personnel practices, and developed a new performance management system. CFPB has made progress in adopting leading diversity management practices identified in prior GAO work, such as finalizing a diversity strategic plan, creating employee diversity groups, and expanding diversity training. In addition, CFPB launched a new initiative to strengthen its organizational culture that includes obtaining employee input on ideas for improving CFPB's culture and addressing employee concerns. Finally, CFPB has strengthened its employee complaint processes by providing new training and guidance and creating feedback mechanisms to help evaluate progress in some areas.
CFPB has taken steps to measure and communicate progress on these efforts, such as through its process for analyzing feedback from employee surveys. However, without additional steps in these areas, CFPB may miss opportunities to help ensure sustained commitment and accountability for its initiatives.
CFPB's diversity, inclusion, fairness, and culture efforts represent a significant change management initiative, but CFPB does not comprehensively report on its implementation goals and progress across these efforts.
CFPB has created some feedback mechanisms to evaluate the effectiveness of its equal employment opportunity complaint process, but has not done the same for its employee grievance processes.

What GAO Recommends

GAO makes two recommendations to improve CFPB's personnel management efforts, including developing a strategy for reporting on progress and creating feedback tools on its grievance processes in coordination with its employee union. CFPB concurred with both recommendations.