In particular, they use performance  agreements to align and cascade organizational goals to individual  performance expectations through several levels in their organizations. To this end, BLM,  FHWA, IRS, and VBA developed a set of expectations for senior executive  performance that were intended to balance organizational results,  customer satisfaction, and employee perspectives and offered a menu of  expectations for senior executives to incorporate into their individual  performance plans. In addition, the agencies  appraised senior executives’ performance against their expectations for  customer satisfaction and employee perspectives. Organizational Results

OPM’s regulations emphasize holding senior executives accountable for  their individual and organizational performance by linking individual  performance management with results-oriented organizational goals. Initial Implementation Approaches to Manage Senior Executives’ Performance

While the four agencies tailored their performance management systems to  fit their organizational and operational needs, we identified an initial set of  implementation approaches that BLM, FHWA, IRS, and VBA are taking that  may be helpful to other agencies as they manage senior executive  performance against balanced expectations. All of the senior executives received a  pass rating in the 2000 and 2001 performance appraisal cycles. There are significant opportunities to strengthen these efforts as they move  forward in holding senior executives accountable for results. In particular,  more progress is needed in explicitly linking senior executive expectations  for performance to results-oriented organizational goals, fostering the  necessary collaboration both within and across organizational boundaries  to achieve results, and demonstrating a commitment to lead and facilitate  change. Objectives, Scope, and Methodology

To meet our objectives, we focused our review on federal agencies that  have implemented a set of balanced expectations in their performance  management systems for all or a significant portion of their senior  executives prior to the Office of Personnel Management (OPM) amending  the regulations. Among the possible agencies with relevant experience, we  selected the Bureau of Land Management (BLM), Federal Highway  Administration (FHWA), Internal Revenue Service (IRS), and Veterans  Benefits Administration (VBA) because they provided variation in mission,  size, and organizational structures. Specific ways to address  these areas were included.
Why GAO Did This Study

Effective performance management systems link individual performance to organizational goals. In October 2000, the Office of Personnel Management amended regulations to require agencies to link senior executive performance with organizational goals; to appraise executive performance by balancing organizational results with customer satisfaction, employee perspective, and other areas; and to use performance results as a basis for pay, awards, and other personnel decisions. Agencies were to establish these performance management systems by their 2001 senior executive performance appraisal cycles. Because they implemented a set of balanced expectations prior to the Office of Personnel Management requirement, GAO studied the Bureau of Land Management's, Federal Highway Administration's, Internal Revenue Service's, and Veterans Benefits Administration's use of balanced expectations to manage senior executive performance in order to identify initial approaches that may be helpful to other agencies in holding senior executives accountable for results.

What GAO Found

The agencies GAO reviewed developed an initial set of balanced expectations for senior executives to address in their individual performance plans. GAO found that these agencies are in the early stages of using a set of balanced expectations to appraise senior executive performance and there are significant opportunities to strengthen their efforts as they move forward in holding executives accountable for results. Specifically, more progress is needed in explicitly linking executive expectations for performance to organizational goals. In addition, while these agencies address partnering with customers and other stakeholders, greater emphasis should be placed in fostering the collaboration within and across organizational boundaries to achieve results. Successful organizations understand that they must often change their culture to successfully transform themselves, and such change starts with top leadership. Senior executive performance expectations to lead and facilitate change could be a critical element as agencies transform themselves.