Issue Briefs

Following are excerpts from the latest GAO report on NSPS, issued just as legislation was enacted to phase out the system and require that certain elements be replaced.


DOD continues to take steps to implement safeguards as part of the NSPS performance management system, but implementation of some safeguards could be improved, and continued monitoring of the safeguards’ implementation is needed. In general, DOD has taken some steps to meet the intent of each of the safeguards, and it has implemented some of the recommendations from our 2008 report, including requiring commands to publish the final overall rating results and providing guidance to pay pools encouraging managers to rate employees appropriately. Nonetheless, DOD’s implementation of some of the safeguards could be improved. First, for example, DOD has not evaluated the effectiveness of the training that it provides to employees on the system. Under NSPS, the components are responsible for training their employees, while DOD’s NSPS Program Executive Office (PEO) supports the components’ efforts by offering a variety of departmentwide training courses and other materials. However, officials14 at each of the eight organizations we visited expressed concerns over the effectiveness of the training provided, noting that additional training was needed, that training was not always helpful, and that some training was not timely or was outdated. We previously reported that it is increasingly important for agencies to measure the real impact of training and thus evaluate the training efforts to ascertain progress toward achieving agency goals.

Second, while, in 2008, DOD did not agree with our recommendation to require a predecisional analysis of ratings—stating that postdecisional analysis of rating results is useful to identify barriers and corrective actions—we found during the course of this review that the department’s postdecisional analyses following the 2007 and 2008 NSPS performance management cycles lacked consistency and did not generally include demographic information. However, in May 2009, the PEO issued guidance to promote a degree of standardization in the components’ postdecisional analyses. While not predecisional, we recognize that DOD’s approach represents a noteworthy step and does provide some benefits, some of which are similar to those of a predecisional analysis. For example, like predecisional analysis, postdecisional analysis is a mechanism to ensure that employees receive fair and equitable treatment in all aspects of personnel management.

However, the guidance does not specify what process the components should follow to investigate potential barriers to fair and equitable ratings and their causes, nor a process for eliminating barriers that are found. Because DOD’s guidance does not specify these steps, the components may not follow a consistent approach when investigating potential barriers, which could hinder their efforts to eliminate them. In our 2008 report, we also noted that continued monitoring of the safeguards was needed to ensure that DOD’s actions were effective as implementation of NSPS proceeded. We found that DOD monitors some aspects of the implementation of NSPS, such as whether the system is on track to achieve certain goals it established, but does not monitor how or the extent to which the safeguards specifically are implemented across the department. Because DOD does not monitor the implementation of the safeguards, decision makers in DOD and the Congress lack information that could be used to determine whether the department’s actions are effective and whether the system is being implemented in a fair, equitable, and credible manner. Accordingly, until DOD effectively implements the safeguards and monitors their implementation across the department, employees will not have assurance that NSPS is a fair, equitable, and credible system and decision makers in DOD and the Congress will not have the information that could be used to determine if the department’s actions are effective.

DOD civilian personnel have mixed perceptions about NSPS, and while the department has taken some steps toward addressing their concerns, it has not yet developed and implemented an action plan to address areas where employees express negative perceptions of the system, as we recommended in 2008. DOD’s survey data from 2008 revealed that overall, NSPS employees responded positively about some aspects of performance management, such as connecting pay to performance, and negatively about other aspects, including the performance appraisal process. For example, DOD’s survey data for 2008 indicate that an estimated 42 percent of NSPS employees agree that pay raises depend on how well employees perform their jobs, as compared with an estimated 25 percent of non-NSPS employees.

However, when asked about their performance appraisal system, an estimated 29 percent of NSPS employees, as compared with an estimated 34 percent of non-NSPS employees, agreed with the statement that their performance appraisal system improves organizational performance. Additionally, DOD’s most recent survey data indicated that employees who worked under NSPS the longest—spiral 1.1 employees17—expressed negative perceptions of the system consistent with those we reported on in 2008. For example, between the November 2006 and February 2008 administrations of DOD’s survey, the percentage of spiral 1.1 employees that agreed that they understood what they had to do to be rated at a different performance level declined from an estimated 59 percent in November 2006 to an estimated 53 percent in May 2007, then remained consistent with an estimated 54 percent responding that they agree in February 2008.

Further, the results of our discussion groups indicated that employees and supervisors continue to have consistent concerns and negative perceptions of NSPS. These included the following: (1) NSPS’s negative impact on employee motivation and morale; (2) the excessive amount of time spent navigating the performance management process; (3) challenges with job objectives; (4) factors undermining employee confidence in the system, such as the subjectivity of the pay pool panel process; and (5) factors unrelated to job performance affecting employees’ final performance ratings, such as supervisors’ and employees’ writing skills. As we have previously reported, these negative perceptions are not surprising given that large-scale organizational transformations—for example, the adoption of a new performance management system—often entail fundamental and radical changes that require an adjustment period to gain employees’ trust and acceptance.

With regard to DOD’s efforts to address employee perceptions of the system, DOD issued a memorandum, in June 2009, highlighting actions the department had taken in this area, as well as suggested future actions that the components could take to address identified negative perceptions. While we believe that issuing this memorandum is an important first step in addressing employee concerns, it does not fully meet the intent of our 2008 recommendation that DOD develop and implement a specific action plan to address employee perceptions of NSPS because it does not specify such things as the actions DOD intends to take, who will be responsible for taking the action, and timelines for doing so—items stipulated in OPM guidance on action planning.18 We continue to believe that implementing such an action plan is important, and note that doing so would be a step that DOD could take to involve employees in the system’s implementation—which is one of the safeguards we discuss.