GS and Alternative Systems Need to More Effectively Balance Key Attributes of a Modern, Effective Classification System Eight Important Attributes of a Modern, Effective Classification System

Our analysis of subject matter specialists’ comments, related literature,  and interviews with OPM officials identified a number of important  characteristics for a modern, effective classification system, which we  consolidated into eight key attributes. We found, in concept, these features  incorporate several of the key attributes including internal and external  equity, transparency, simplicity, and rank-in-position. However, as  agencies implement the GS system the attributes of transparency,  internal equity, simplicity, flexibility, and adaptability are reduced. This  occurs, in part, because as discussed earlier in this report, some  attributes are at odds with one another, so fully achieving one attribute  comes at the expense of another. For example, the occupational standard for an information  technology specialist clearly describes the routine duties and tasks, and  experience required for the position. This information is published for all  of the 420 occupations defined in the GS system, so all agencies are  using the same, consistent standards when writing position descriptions. However, in practice having numerous, narrowly-defined occupational  standards may actually inhibit the system’s ability to optimize these  attributes for reasons including the following:
Classifying occupations and developing position descriptions in the  GS system requires officials to maintain an understanding of the  potential responsibilities of the individual position and of the nuances  between similar occupational definitions. Without this understanding,  having numerous occupations from which to choose may inhibit  transparency and internal equity. As  a result, officials may not be classifying positions consistently,  comparable employees may not be treated equitably, and the system  may seem unpredictable. Extent to Which Broadband Systems Incorporate Attributes of a Modern, Effective Classification System Is Mixed

Over the years, agencies, either through the use of demonstration  projects or congressionally authorized alternative personnel systems,  have sought exceptions to the GS system to mitigate some of its  limitations. By using lessons learned  from the alternative systems and results from prior studies of the GS  system to examine ways to make the GS system more consistent with the  attributes of a modern, effective classification system, OPM could better  position itself to help ensure that the system is keeping pace with the  government’s evolving requirements. Agencies Increased Their Use of Alternative Personnel Systems to Obtain Greater Pay Flexibilities

The proportion of federal white-collar employees covered by alternative  personnel systems increased from 6 percent in 1988 to 21 percent in  2013, as shown in figure 3. occupational families, the 6 with the largest increase from GS to an  alternative system were mostly concentrated in STEM occupations, as  shown in figure 4. We estimated that in 2013 employees in alternative personnel systems  were paid about 10 percent more, on average, than GS employees in  identical occupations when controlling for factors such as tenure, location,  and education in the 90 occupations we considered.was a significant range among the occupations in the difference in pay  between those in the GS and those in alternative systems—going both  ways. OPM Could Benefit from a More Strategic Approach to Creating and Updating Occupational Standards

OPM is responsible for establishing new—and revising existing— occupational standards after consulting with agencies; however, OPM  does not know the extent to which it is meeting the needs of agencies  with regard to updating occupational standards. From 2003 to 2014, OPM  established 14 new occupational standards (new occupations in the  federal government), and revised almost 20 percent of the occupational  standards. However, there was no published review or update of 124  occupations, roughly 30 percent of the total GS system occupations,  since 1990. OPM officials said that they first address occupations identified in  presidential memorandums. However, OPM does not systematically track and prioritize the  remaining occupational standards. Further, OPM officials could not provide the  near- or long-term prioritization for reviewing occupations. OPM is required by law to review “from time to time” a  number of positions in each federal agency to determine whether the  agency is correctly placing positions in classes and grades according to  OPM-published standards. OPM officials said the agency stopped conducting oversight reviews in  the 1980s because OPM determined that the reviews were ineffective at  overseeing agency compliance with the occupational standards. Without a strategic approach to oversight, OPM has limited  assurance that agencies are correctly classifying positions according to  the standards. However, our work and that of other organizations have shown how the  GS system has not kept pace with the government’s evolving  requirements. OPM stated that it did not concur with our recommendation to develop a  strategy to systematically track and prioritize updates to occupational  standards. Our objectives were to assess (1) the attributes of a modern,  effective classification system and how the General Schedule (GS)  classification system compares with the modern systems’ attributes; (2)  the trends in agencies and occupations covered under the GS system  and the pay difference for selected alternative systems; and (3) the Office  of Personnel Management’s (OPM) administration and oversight of the  GS system. The GS system sets promotion expectations for both the employee and the supervisor.
Why GAO Did This Study

Almost since its inception in 1949, questions have been raised about the ability of the GS system—the federal government's classification system for defining and organizing federal positions—to keep pace with the evolving nature of government work. GAO was asked to review the GS classification system.
This report examined: (1) the attributes of a modern, effective classification system and how the GS system compares with the modern systems' attributes; (2) trends in agencies and occupations covered by the GS system and the pay difference for selected alternative systems; and (3) OPM's administration and oversight of the GS system. GAO analyzed personnel data from 1988 to 2013, conducted a literature review, compared legislation to OPM procedures, and interviewed subject matter specialists and OPM officials, selected to represent public policy groups, government employee unions, and academia, among others.

What GAO Found

GAO's analysis of subject matter specialists' comments, related literature, and interviews with Office of Personnel Management (OPM) officials identified a number of important characteristics for a modern, effective classification system, which GAO consolidated into eight key attributes (see table below). GAO's analysis shows that in concept the current General Schedule (GS) classification system's design incorporates several key attributes including internal and external equity, transparency, simplicity, and rank in position. However, as OPM implemented the system, the attributes of transparency, internal equity, simplicity, flexibility, and adaptability are reduced. This occurs, in part, because some attributes are at odds with one another so fully achieving one attribute comes at the expense of another. Thus, OPM, working with its stakeholders, is challenged to determine how best to optimize each attribute.
While the GS system's standardized set of 420 occupations, grouped in 23 occupational familes, and statutorily-defined 15 grade level system incorporates several key attributes, it falls short in implementation. For example, the occupational standard for an information technology specialist clearly describes the routine duties, tasks, and experience required for the position. This kind of information is published for the 420 occupations, so all agencies are using the same, consistent standards when classifying positions—embodying the attributes of transparency and internal equity. However, in implementation, having numerous, narrowly-defined occupational standards inhibits the system's ability to optimize these attributes. Specifically, classifying occupations and developing position descriptions in the GS system requires officials to maintain an understanding of the individual position and the nuances between similar occupations. Without this understanding, the transparency and internal equity of the system may be inhibited, as agency officials may not be classifying positions consistently, comparable employees may not be treated equitably, and the system may seem unpredictable. Several studies have concluded that the GS system was not meeting the needs of the modern federal workforce or supporting agency missions, and some studies suggested reductions in the number of occupational series and grade levels to help simplify the system. In addition, over the years agencies have sought exceptions to the GS system to mitigate some of its limitations either through demonstration projects or congressionally-authorized alternative personnel systems—often featuring a broadband approach that provided fewer, broader occupational groups and grade levels. By using lessons learned and the results from prior studies to examine ways to make the GS system more consistent with the attributes of a modern, effective classification system, OPM could better position itself to help ensure that the system is keeping pace with the government's evolving requirements.
The proportion of federal employees covered under alternative personnel systems increased from 6 percent to 21 percent of the white-collar workforce from 1988 to 2013. Occupational families (i.e., groups of occupations based upon work performed) in the science, technology, engineering, and math (STEM) fields are more prevalent in alternative systems. Of the GS system's 23 occupational families, the 6 with the largest increase from GS to an alternative system were mostly concentrated in STEM occupations (See figure below). GAO estimated that, in 2013, employees in alternative systems were paid about 10 percent more, on average, than GS employees in identical occupations when controlling for factors such as tenure, location, and education in the 90 occupations GAO considered.
OPM is responsible for establishing new—and revising existing—occupational standards after consulting with agencies. From 2003 to 2014, OPM established 14 new occupational standards and revised almost 20 percent of the occupational standards. However, there was no published review or update of 124 occupations since 1990. OPM officials said they first review occupations identified in presidential memorandums as needing review; however OPM does not systemically track and prioritize the remaining occupational standards for review. Therefore, OPM has limited assurance that it is updating the highest priority occupations. Further, OPM is required by law to oversee agencies' implementation of the GS system. However, OPM officials said OPM has not reviewed any agency's classification program since the 1980s because OPM leadership at the time concluded the reviews were ineffective and time consuming. As a result, OPM has limited assurance that agencies are correctly classifying positions according to standards.

What GAO Recommends

GAO recommends that the Director of OPM (1) work with stakeholders to examine ways to modernize the classification system, (2) develop a strategy to track and prioritize occupations for review and updates, and (3) develop cost-effective methods to ensure agencies are classifying correctly. OPM partially concurred with the first and third recommendation but did not concur with the second recommendation. OPM stated it already tracks and prioritizes occupations for updates. However, OPM did not provide documentation of its actions. GAO maintains that OPM should implement this action.