	DOD Has Taken Some Steps to Implement Internal Safeguards, but Additional Monitoring Is Needed to Ensure the Fairness of NSPS

DOD has taken some steps to implement internal safeguards to help  ensure that the NSPS performance management system is fair, effective,  and credible; however, we believe continued monitoring of safeguards is  needed to help ensure that DOD’s actions are effective as implementation  proceeds. Specifically, we reported in September 2008 that DOD had  taken some steps to (1) involve employees in the system’s design and  implementation; (2) link employee objectives and the agency’s strategic  goals and mission; (3) train and retrain employees in the system’s  operation; (4) provide ongoing performance feedback between  supervisors and employees; (5) better link individual pay to performance  in an equitable manner; (6) allocate agency resources for the system’s  design, implementation, and administration; (7) provide reasonable  transparency of the system and its operation; (8) impart meaningful  distinctions in individual employee performance; and (9) include  predecisional internal safeguards to determine whether rating results are  fair, consistent, and equitable. For example, all 12 sites we visited trained  employees on NSPS, and the DOD-wide tool used to compose self- assessments links employees’ objectives to the commands’ or agencies’  strategic goals and mission. However, we determined that DOD could  immediately improve its implementation of three safeguards. We are currently assessing DOD’s postdecisional analysis approach as part  of our ongoing review of the implementation of NSPS. Although DOD Civilian Employees under NSPS View Some Aspects of the System Positively, DOD Does Not Have a Plan to Address the Generally Negative Employee Perceptions of the System

Although DOD civilian employees under NSPS responded positively  regarding some aspects of the NSPS performance management system,  DOD does not have an action plan to address the generally negative  employee perceptions of NSPS identified in both the department’s Status  of Forces Survey of civilian employees and discussion groups we held at  12 select installations. According to our analysis of DOD’s survey from  May 2007, NSPS employees expressed slightly more positive attitudes than  their DOD colleagues who remain under the General Schedule system  about some goals of performance management, such as connecting pay to  performance and receiving feedback regularly. For example, an estimated  43 percent of NSPS employees compared to an estimated 25 percent of all  other DOD employees said that pay raises depend on how well employees  perform their jobs. We therefore recommended, in our September 2008  report, that DOD develop and implement a specific action plan to address  employee perceptions of NSPS ascertained from DOD’s surveys and  employee focus groups. The degree of ultimate success of NSPS largely depends on the  extent to which DOD incorporates internal safeguards and addresses  employee perceptions. Moving forward, we hope that the Defense  Business Board considers our previous work on NSPS as it assesses how  NSPS operates and its underlying policies. 1. Human Capital: DOD’s Civilian Personnel Strategic Management and  the Proposed National Security Personnel System.
Why GAO Did This Study

DOD is in the process of implementing this human capital system, and according to DOD, about 212,000 civilian employees are currently under the system. On February 11, 2009, however, the House Armed Services Committee and its Subcommittee on Readiness asked DOD to halt conversions of any additional employees to NSPS until the administration and Congress could properly address the future of DOD's personnel management system. On March 16, 2009, DOD and the Office of Personnel Management (OPM) announced an upcoming review of NSPS policies, regulations, and practices. According to DOD, the department has delayed any further transitions of employees into NSPS until at least October 2009--pending the outcome of its review. Furthermore, on May 14, 2009, the Deputy Secretary of Defense asked the Defense Business Board to form what has become this task group to review NSPS to help the department determine, among others things, whether NSPS is operating in a fair, transparent, and effective manner. This statement focuses on the performance management aspect of NSPS specifically (1) the extent to which DOD has implemented internal safeguards to ensure the fairness, effectiveness, and credibility of NSPS and (2) how DOD civilian personnel perceive NSPS and what actions DOD has taken to address these perceptions. It is based on the work we reported on in our September 2008 report, which was conducted in response to a mandate in the National Defense Authorization Act for Fiscal Year 2008. This mandate also directed us to continue examining DOD efforts in these areas for the next 2 years. We currently have ongoing work reviewing the implementation of NSPS for the second year, and we also will perform another review next year.

What GAO Found

DOD has taken some steps to implement internal safeguards to help ensure that the NSPS performance management system is fair, effective, and credible; however, we believe continued monitoring of safeguards is needed to help ensure that DOD's actions are effective as implementation proceeds. Specifically, we reported in September 2008 that DOD had taken some steps to (1) involve employees in the system's design and implementation; (2) link employee objectives and the agency's strategic goals and mission; (3) train and retrain employees in the system's operation; (4) provide ongoing performance feedback between supervisors and employees; (5) better link individual pay to performance in an equitable manner; (6) allocate agency resources for the system's design, implementation, and administration; (7) provide reasonable transparency of the system and its operation; (8) impart meaningful distinctions in individual employee performance; and (9) include predecisional internal safeguards to determine whether rating results are fair, consistent, and equitable. For example, all 12 sites we visited trained employees on NSPS, and the DOD-wide tool used to compose self-assessments links employees' objectives to the commands' or agencies' strategic goals and mission. However, we determined that DOD could immediately improve its implementation of three safeguards. Although DOD civilian employees under NSPS responded positively regarding some aspects of the NSPS performance management system, DOD does not have an action plan to address the generally negative employee perceptions of NSPS identified in both the department's Status of Forces Survey of civilian employees and discussion groups we held at 12 select installations. According to our analysis of DOD's survey from May 2007, NSPS employees expressed slightly more positive attitudes than their DOD colleagues who remain under the General Schedule system about some goals of performance management, such as connecting pay to performance and receiving feedback regularly. For example, an estimated 43 percent of NSPS employees compared to an estimated 25 percent of all other DOD employees said that pay raises depend on how well employees perform their jobs.