Detailed Information on the
Human Capital Program Assessment

Program Code 10004412
Program Title Human Capital Program
Department Name Office of Personnel Management
Agency/Bureau Name Office of Personnel Management, activities
Program Type(s) Regulatory-based Program
Assessment Year 2006
Assessment Rating Adequate
Assessment Section Scores
Section Score
Program Purpose & Design 80%
Strategic Planning 100%
Program Management 100%
Program Results/Accountability 28%
Program Funding Level
(in millions)
FY2007 $44
FY2008 $41
FY2009 $37

Ongoing Program Improvement Plans

Year Began Improvement Plan Status Comments

OPM will periodically analyze or review the actual effects of the program's regulations. By March 31, 2007, the HC Program will provide a plan that outlines evaluation methods and identifies the types of regulations best suited for determining effectiveness of implementation (e.g., Presidential Management Fellows, Student Career Experience Program, Schedule A appointments for Persons with Disabilities, etc.). The plan should also include information on how the HC program will track agency usage of these regulations.

Action taken, but not completed OPM has developed a framework for evaluating selected regulations, and tested this framework during FY08 against three regulations, and based on the results of this evaluation, implement the final framework across all OPM HR policy areas.

Completed Program Improvement Plans

Year Began Improvement Plan Status Comments

The efficiency measure for the Human Resources Line of Business (HRLOB) is the cost to process a personnel action expressed on a per transaction basis. These costs for processing personnel actions will be compared across SSCs.

Completed This documentation was submitted as a aprt of OPM 4th qtr 07 BPI reporting

OPM will provide for an independent evaluation of the Human Capital Program to determine if the actions and resources used are producing the desired results. By March 31, 2007, the HC program will provide an update on the progress made by the independent organization conducting the evaluation.

Completed Final report for the program evaluation was provided to OPM staff at the end of December 2007; OPM staff are currently reviewing evaluation results and preparing to brief OPM leadership and external stakeholders.

Program Performance Measures

Term Type  
Long-term/Annual Outcome

Measure: Percent of agencies that meet the requirements for an effective strategic alignment system.

Explanation:Strategic alignment of human capital with agency mission is the foundational requirement for accomplishing the goal of an effective federal workforce (5 U.S.C. 2301(b)(5)). This measure assesses whether OPM is enabling agencies to achieve strategic alignment through their workforce analysis, planning, and management. Evidence includes implementation of documented human capital plans fully integrated with agency strategy and goals, analysis of results relative to the plan and their use to drive continuous improvement, analysis of existing organizational structures from service and cost perspectives, and processes in place to address future changes in business needs. Regulation 5 CFR 205.203 establishes requirements for an agency to annually submit a Strategic Human Capital Plan to OPM, and this requirement is congruent with planning and reporting requirements in OMB Circular A-11 and 31 U.S.C.

Year Target Actual
2003 baseline 12%
2004 no target 42%
2005 no target 65%
2006 69% 88%
2007 77% 92%
2008 85%
2009 89%
2010 92%
2011 95%
2012 97%
Annual Outcome

Measure: Number of agencies that meet their annual targets for closing leadership competency gaps. Leadership competency gaps are the differences between required and existing competencies possessed by managers and leaders in an agency.

Explanation:Effective government performance requires a leadership cadre that is in place and that has the right competencies to achieve agency missions. As prescribed by 5 CFR 412, agencies must establish systems to provide the competencies leaders need to perform effectively. By measuring leadership competency gaps, OPM can determine its effectiveness in helping agencies target recruiting, retention and development efforts. The "yes" or "no" rating on this metric is based on a comparison of targets for closing leadership competency gaps (set at the beginning of the year) and evidence that these gaps have been completely closed at the end of the year (target assumes that agencies have met 100% of their competency gap closure objectives). Agencies set targets based on their strategic needs; targets will differ by agency and over time.

Year Target Actual
2006 12 agencies 13 agencies
2007 15 agencies 20 agencies
2008 22 agencies
2009 24 agencies
2010 26 agencies
Long-term/Annual Outcome

Measure: Percent of 26 large agency leadership development program graduates placed into positions of higher responsibility.

Explanation:Past results on the earlier measure, "Agency has implemented succession strategies, including structured leadership development programs," showed steady progress. New measure more specifically assesses the outcome of the leadership development programs. OPM's new definition of "leadership talent pool" is the pipeline of potential leaders who are being developed to take leadership positions as they become vacant. Previously for this measure, OPM counted the number of agencies with succession plans that included leadership development programs. Subsequently, OPM refined this measure to determine the percentage of leadership development program graduates who have attained positions of higher responsibility. The refined measure marks an evolution from assuring that agencies put leadership development programs in place (previous measure) to tracking these programs' effectiveness in creating leaders capable of taking on positions of higher responsibility (refined measure).

Year Target Actual
2003 baseline 64.9%
2004 no target 66.2%
2005 no target 61.8%
2006 62.5% 52.8%
2007 55.0% 65%
2008 67%
2009 69%%
2010 71%
2011 73%
2012 75%
Long-term/Annual Outcome

Measure: Percent of applicant Senior Executive Service appraisal systems fully certified (including small agencies).

Explanation:Certification allows for agencies to pay their SES staff above EXEC III pay levels. A high-performing workforce requires performance management systems that effectively plan, monitor, develop, rate and reward performance at all organizational levels. OPM accomplishes this outcome by helping agencies institute leadership performance appraisal systems that effectively link to agency mission, goals and outcomes; hold leaders accountable for results appropriate for their level of responsibility; differentiate between various levels of performance; provide consequences based on performance; and adhere to merit system principles (e.g., 5 U.S.C. 2301 (b)(6)). Agencies that are fully certified receive certification for two years and are counted in each of the two years for which they are fully certified.

Year Target Actual
2004 baseline 5%
2005 no target 4%
2006 5% 3%
2007 10% 50%
2008 55%
2009 60%
2010 65%
2011 70%
2012 75%
Long-term/Annual Outcome

Measure: Percent of all non-SES Performance Appraisal Systems that promote a results-oriented performance culture [measured prior to FY2006 as the number of agencies with a high-quality performance appraisal system and in FY2006 and future years as the percentage of appraisal systems with a score of 80 or higher on the Performance Appraisal Assessment Tool (PAAT).] (see accompanying explanation).

Explanation:To assure an effective federal workforce, OPM is helping agencies institute performance appraisal systems that effectively plan, monitor, develop, rate, and reward performance in accordance with 5 U.S.C. 4301 and 5 CFR 430, 432, 5321, and 1330. OPM uses the 100-point PAAT scale to assess how well a performance appraisal system performs in 11 areas, which include aligning with organizational goals; holding employees accountable for results; using credible standards to measure results; meaningfully differentiating among levels of performance; providing consequences for good performance (e.g., awards, pay increases) and poor performance (e.g., performance improvement plans and discipline); including employees' and employee representatives' input; providing feedback and progress reviews to employees; training supervisors on performance appraisal requirements; assessing organizational unit performance; holding supervisors accountable for performance management; and helping achieve organizational goals. These are necessary elements for a successful performance management system. Target as expressed prior to FY2006: Agency demonstrates that it has performance appraisal and awards systems for at least 60% of the non-executive/manager workforce that effectively link to agency mission, goals and outcomes; hold employees accountable for results appropriate for their level of responsibility; differentiate between various levels of performance (i.e., multiple performance levels with at least one summary rating above "fully successful"); provide consequences based on performance (i.e., have a highly positive relationship between SES performance appraisals and awards); and adhere to merit system principles.

Year Target Actual
2003 baseline 4 agencies
2004 12 agencies 14 agencies
2005 20 agencies 20 agencies
2006 baseline 8%
2007 10% 20%
2008 25%
2009 35%
2010 40%
2011 45%
2012 50%
Long-term/Annual Outcome

Measure: Number of agencies that meet their annual targets for closing mission critical occupation competency gaps. (Prior to FY2006, the measure was expressed as agencies making significant progress toward closing mission critical occupation competency gaps)

Explanation:Competency gaps are the differences between required and existing competencies. OPM helps agencies close gaps in the competencies necessary to effectively perform mission-critical work, in accordance with 5 U.S.C. 1304. Closure of mission critical competency gaps is the "bottom line" indicator as to whether talent systems have been used effectively to supply the human capital necessary to achieve an agency's mission. Targets vary by agency consistent with a particular agency's strategic needs and current conditions. More stringent standards in 2007 will make it more difficult for agencies to meet targets, so the 2006 and 2007 targets are set at the same level.

Year Target Actual
2003 baseline 2 agencies
2004 12 agencies 10 agencies
2005 20 agencies 14 agencies
2006 20 agencies 21 agencies
2007 20 agencies 21 agencies
2008 22 agencies
2009 23 agencies
2010 24 agencies
2011 25 agencies
2012 26 agencies
Long-term/Annual Outcome

Measure: Percentage of hires in each agency that were hired within the 45-day time frame, as described in OPM's hiring time frame model. (In. FY2005, the measure was expressed as the number of agencies that hired, on average, within the 45-day time frame.)

Explanation:OPM helps agencies create an effective workforce by recruiting top talent. Long hiring time frames impede top talent from joining federal service, as they accept other job offers in the meantime. In 2003, GAO reported that the average time to complete all steps in the competitive hiring process averaged 102 days, or about 3.4 months. In a 2004 survey of new hires, the MSPB found that less than half of new hires experiencing a hiring process of three months or longer thought this amount of time was reasonable

Year Target Actual
2005 12 agencies 16 agencies
2006 50% 64%
2007 60% 78%
2008 80%
2009 90%
2010 95%
2011 95%
2012 95%
Long-term/Annual Outcome

Measure: Number of agencies that have migrated to Human Resources Line of Business (HRLOB) Shared Service Centers (SSC).

Explanation:Migration is defined as the transition of an agency's HR services (e.g., processing forms, personnel actions, payroll transactions, etc.) to a Shared Service Center (SSC). Agencies transitioning additional HR functions and services to an SSC will be counted as a migration. It is expected that the further expansion of agency access to SSCs' efficient, standardized information processing systems will result in efficient and effective human capital management functions throughout the government.

Year Target Actual
2006 3 agencies 5 agencies
2007 6 agencies 10 agencies
2008 10 agencies
2009 11 agencies
2010 11 agencies
2011 12 agencies
2012 12 agencies
Annual Efficiency

Measure: Percent Schedule Variance: The percent difference in the amount of work performed relative to the amount of work scheduled, expressed in dollars budgeted.

Explanation:This assesses how well the program is meeting its scheduled performance under the Human Resource Line of Business (HRLOB) initiative. Success is based upon whether or not the initiative remains within its schedule throughout each fiscal year. Per OMB guidance (see section 300.5 of OMB Circular A-11), agencies are expected to achieve, on average, 90% of the cost, schedule and performance goals for major acquisitions or projects such as the HRLOB initiative. Percent Schedule Variance = (BCWP - BCWS) / BCWS, in which BCWP = Budgeted Cost of Work Performed BCWS = Budgeted Cost of Work Scheduled This measure is being used as an interim efficiency measure for the HRLOB until the initiative has fully come on line. This measure is being used during the design and implementation stage of the initiative. Once it is fully operational (when most agencies are using the Shared Service Centers (SSC)), OPM will then measure the cost of processing personnel transactions at the SSCs as its efficiency measure

Year Target Actual
2005 +/-10% 0.31%
2006 +/-10% -.29%
2007 +/-10% 0.4%
2008 +/-10%
2009 +/-10%
Annual Efficiency

Measure: Percent Cost Variance: The difference between budgeted and actual cost for work performed.

Explanation:This assesses how well the program is meeting its budget plan. Success will mean that the SSC initiative remains within budget throughout its duration. Per OMB guidance (see section 300.5 in OMB Circular A-11), agencies are expected to achieve, on average, 90% of the cost, schedule and performance goals for major acquisitions or projects such as the HRLOB initiative. Percent Cost Variance = (BCWP - ACWP) / BCWS, in which BCWP = Budgeted Cost of Work Performed ACWP = Actual Cost of Work Performed. This measure is being used during the design and implementation stage of the initiative. Once it is fully operational (when most agencies are using the Shared Service Centers (SSC)), OPM will then measure the cost of processing personnel transactions at the SSCs as its efficiency measure.

Year Target Actual
2005 +/-10% -1.16%
2006 +/-10% 1.1%
2007 +/-10%
2008 +/-10%
2009 +/-10%
Annual Outcome

Measure: Number of civil service employees in performance-based pay systems (i.e. performance-based systems authorized by statute or that are under a demonstration project).

Explanation:A high-performing workforce requires performance management systems that link pay systems to performance levels. OPM accomplishes this outcome by working with agencies to improve their performance management and pay systems through consultation on new performance-based pay systems, such as in demonstration projects and the Department of Defense's new National Security Pay System, consistent with 5 U.S.C. 2301 (b)(6).

Year Target Actual
2005 baseline 61,504
2006 72,000 82,826
2007 90,000 298,038
2008 350,000
2009 360,000

Questions/Answers (Detailed Assessment)

Section 1 - Program Purpose & Design
Number Question Answer Score

Is the program purpose clear?

Explanation: The Human Capital (HC) program's purpose is to promote an efficient and effective, merit-based federal civil service. The program accomplishes this by developing and issuing policy, standards and guidance; designing a set of systems, including appropriate metrics, for assessing human capital practices and results; and providing human capital advice and leadership for the President of the United States and Federal agencies. The Office of Personnel Management's (OPM's) HC program accomplishes significant aspects of its mission through formal rulemaking that implements, interprets, and prescribes HC policy, practices, and requirements as authorized by statute or Executive Order.

Evidence: The program purpose is based in statute (5 USC 1103(a)(5), (7) and (8), 5 USC 1103(c), and 1104(b)(3)) and in the OPM 2006-2010 Strategic and Operational Plan. Three components within OPM comprise the HC Program - 1) the Strategic Human Resource Policy (SHRP) Division which develops government-wide HC policy and issues regulations, standards and guidance to support those policies; 2) the Human Capital Leadership and Merit System Accountability (HCLMSA) Division which leads the effort to implement and assess HC policies and practices within agencies; and 3) the Human Resources Line of Business (HRLOB) Office which works to eliminate cross agency redundancy by developing standards for common core human resources (HR) functions and determining standard automated solutions for these functions. The HR LOB initiative has established Shared Service Centers (SSCs) to provide technology solutions to support multiple agencies with HR services, payroll operations via the e-Payroll Providers, and other IT and non-IT activities. Each component works in close coordination to develop government-wide HC policies, standards and practices that are based largely on the Human Capital Assessment and Accountability Framework (HCAAF) developed by OPM. The HCAAF focuses on five HC areas that, if properly addressed by agencies, will allow for successful HC management in the Federal Government. These areas include 1) Strategic Alignment - where agencies align their HC plans to support the overall agency mission and/or strategic plan; 2) Leadership and Knowledge Management - where agencies ensure continuity of leadership, promote learning, and establish methods to capture organizational knowledge; 3) Results-Oriented Performance Culture - where agencies implement effective performance management systems and awards programs; 4) Talent Management - where agencies identify competency gaps, especially in mission critical occupations, and develop strategies to attract, retain and develop quality personnel (talent); and 5) Accountability - where agencies self monitor and evaluate their HC management practices, including their compliance with merit system principles. (Note that another OPM program, the Merit Systems Compliance program is responsible for the area of Accountability and was the subject of a previous PART evaluation.) The HC program has developed numerous activities that help agencies focus on the different HCAAF areas. For illustrative purposes during this PART evaluation, the program chose six specific activities to highlight how it promotes an efficient and effective civil service and determines whether or not the program is achieving its goals. These activities include strategic HC planning, leadership development and succession planning, Senior Executive Service (SES) performance management, hiring, HRLOB implementation, and the overarching HC activity - pay policy and administration.

YES 20%

Does the program address a specific and existing problem, interest, or need?

Explanation: Through its activities, the HC program addresses the specific problems and current interest of the President, the Government Accountability Office (GAO), and the Congress. In his President's Management Agenda (PMA) introduced in August 2001, the President identified strategic management of HC as one of his five governmentwide initiatives to improve management and performance. The PMA identified several HC problems including a workforce whose skills were out of balance with the current and future needs of the public it serves, pay systems that do not reward excellence and do not reflect current market realities, and delays in the hiring process. In addition, the most recent update of the GAO High Risk Series dated January 2005 (GAO-05-207), continues to list strategic HC management as a high risk area. According to GAO, the area remains high risk because federal HC strategies are still not appropriately constituted to meet current and emerging challenges or drive the transformations necessary for agencies to meet those challenges. GAO further states that agencies, working with the Congress and OPM, must assess future workforce needs; determine ways to maximize use of available authorities to recruit, hire, develop and retain key talent to meet their needs; build a case to request additional authorities as appropriate; and reform performance management systems to better link organizational and individual results. Acknowledging that there is a continued need to improve the management of HC by agencies, the Congress enacted the Chief Human Capital Officers Act of 2002. This Act included a provision for OPM to design a set of systems, including appropriate metrics, for assessing how well agencies are doing in the HC area. The HC program within OPM has the primary responsibility for carrying out the provision's requirements.

Evidence: The following program activities will serve to highlight where existing HC problems continue throughout the government. Strategic Human Capital Planning - The HC program has developed a 65 question template for assessing the most current strategic HC plans from agencies. Agencies were required to provide documented evidence that their strategic HC plans included goals, objectives and strategies, a workforce plan, and performance measures and milestones. Out of the 16 agency plans reviewed so far, only five agencies could answer positively to at least 50% of the questions on the template. Leadership Development and Succession Planning - According to various estimates, including an estimate from the Partnership for Public Service in their May 2006 report entitled, "Back to School: Rethinking Federal Recruitment on College Campuses," of the approximate 1.9 million federal workers, about 44% will be eligible to retire by 2010, including 60% of senior managers. To respond, the HC program has developed and trained agencies on "A Guide to the Strategic Leadership Succession Model," which is a tool to provide agencies with a framework for designing, developing, implementing, and evaluating effective succession management systems. SES performance management - This activity uses a certification process, based on statute and regulations promulgated by OPM and the Office of Management and Budget, to assure that agencies design and implement performance appraisal systems through which executives are paid according to their performance and accomplishment of agency mission. Agency SES performance management systems are certified when key elements of an effective pay-for-performance system are in place. Certification allows for agencies to pay their SES staff above EXEC III pay levels. For an agency to receive full certification, pay and awards data from two full years, in addition to other requirements, must demonstrate that agencies are making distinctions in individual performance. For calendar year 2006, only one agency has met the requirements for full certification. A 2005 report from the Congressional Research Service, entitled, "Senior Executive Service Pay System" expands on issues concerning the certification process and its effects on agencies. Hiring - A May 2003 GAO report entitled "Human Capital: Opportunities to Improve Executive Agencies' Hiring Processes" stated that nearly all of the federal human resource directors from the 24 largest federal agencies said that it takes too long to hire quality employees. At that time, OPM estimated that filling a competitive service position typically required more than 3 months, with some examples of hiring delays exceeding 6 months. Since that time, the HC program has launched a reduction in hiring time initiative where agencies use a hiring makeover toolkit and other HC program assistance to hire GS employees within 45 days, and to hire SES employees within 30 days of the closing date of the job vacancy announcement. Pay Policy and Administration - Relying on authority granted under 5 U.S.C. chapter 55, the HC program provides pay administration guidelines and standards by developing and maintaining government-wide regulations and policies on pay administration including: basic pay setting, locality pay, special rates, back pay, pay limitations, premium pay, grade and pay retention, severance pay, and recruitment, relocation, and retention incentives. The HC program is also promoting better agency performance management systems to help counter problems with the current GS pay system, which rewards employee time in service rather than performance. In 2002, OPM issued a white paper entitled, "A Fresh Start for Federal Pay: The Case for Modernization," which highlights why OPM believes the current GS pay system fails as a means to appropriately compensate and reward employees for their performance, competencies, and contribution to mission accomplishment.

YES 20%

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The HC Program is designed so that it is to a large degree not redundant or duplicative of any other public or private effort. OPM has the unique and inherently governmental role of providing centralized leadership for the government-wide management of initiatives in what was traditionally called "human resource management." No other Federal, state, local, or private effort sets the General Schedule pay adjustments under the Federal Employees Pay Comparability Act of 1990 (FEPCA), which the program administers, nor does any other entity provide government-wide pay administration policy. OPM does administer many programs and laws for the Federal government that are also administered by other agencies for other segments of the workforce. These include, among others, the Fair Labor Standards Act, the Family and Medical Leave Act, workforce statistics, veterans employment, and antidiscrimination reporting. As required by law [Civil Service Reform Act of 1978; 5 U.S.C. 1103(a)(7),1104(b)(3)], OPM ensures that the government's personnel management laws, rules, and regulations support agencies in recruiting, hiring, and retaining a merit-based, high-quality, diverse workforce. OPM, through the HC program, provides leadership to agencies by issuing rules and setting government-wide standards and goals to guide agencies in improving HC management. No other entity has been given this responsibility. Some necessary and complementary duplication of effort exists in evaluation and assessment of agency HC management programs. The Office of Management and Budget (OMB) generally evaluates overall agency program effectiveness. OMB also provides an independent opinion when evaluating agencies on their progress in meeting the standards set forth in the PMA Human Capital Initiative. GAO audits government programs and operations, including agency HC programs, to provide Congress with information on how the Federal government spends taxpayer dollars. The information provided by GAO is used by Congress to help guide funding and other legislative choices. OPM's reports and assessments are also used by Congress to provide valuable feedback as to the state of HC management in the Federal government and give direction on future efforts. There are also HC policy and implementation support efforts in organizations exempt from key provisions of Title 5 of the U.S. Code. The overall trend toward increased flexibility and deregulation in HC management has led individual agencies to seek Congressional approval to deviate from the Title 5 personnel provisions that have traditionally governed much of the Federal government's civil service system. The new HR systems approved for DHS and DOD are prime examples of systems exempt from significant sections of Title 5. As mandated by law, OPM's HC program still plays a significant partnership role in these efforts, and retains the responsibility of oversight and evaluation of these new systems. Another area of perceived duplication is the outsourcing of HR transactions. Many agencies have supplemented their internal HR function using either commercial off-the-shelf HR software or alternative HR service delivery systems. Some agencies have even outsourced the development of HR procedures and processes. Although agencies may choose to outsource components of their HR function, these agencies are still required to follow OPM policy, standards, and guidance. In these instances, OPM also retains its oversight, assessment and evaluation role. Regardless of the extent of outsourcing, OPM continues to play the unique role of providing the framework and standards for HC management that agencies and contractors employed by agencies must follow.

Evidence: OMB's predominant mission is to assist the President in overseeing the preparation of the Federal budget and to supervise its administration in Executive Branch agencies. In helping to formulate the President's spending plans, OMB evaluates the effectiveness of agency programs, policies, and procedures, assesses competing funding demands among agencies, and sets funding priorities. OMB ensures that agency reports, rules, testimony, and proposed legislation are consistent with the President's Budget and with Administration policies. However, OMB does not issue regulations, standards and guidance on HC matters. GAO exists to support the Congress in meeting its Constitutional responsibilities and to help improve the performance and ensure the accountability of the Federal government for the benefit of the American people. GAO examines the use of public funds; evaluates Federal programs and activities; and provides analyses, options, and other assistance to help the Congress make effective oversight, policy, and funding decisions. While GAO reviews and evaluates HC practices within agencies, it is not its primary area of responsibility. GAO also may not issue regulations or establish standards and guidance for Executive Branch agencies. New HR systems: Both of the statutes that authorized the new HR systems in DHS (P.L. 107-296) and DOD (P.L. 108-136) included provisions that required any regulations for these systems to be jointly prescribed with the Director of OPM, thereby recognizing OPM's unique role in leading Federal HR management. Human Resources Line of Business (HRLOB): A component of the HC program, the HR LOB office is also working to eliminate the duplication of redundant agency HR systems. Through its governance structure, the HR LOB has the full cooperation and participation of all major Federal agencies. A defining principle of the HR LOB, enforced by OMB, is a mandate for agencies to migrate to a Shared Service Center as opposed to investing in new, agency HR solutions. OPM establishes the overall HC rules, standards, and guidelines agencies must follow, but they are designed to allow agencies flexibility in their own HC management. In this sense, agencies have their own HR missions, staffs, management practices and technology. While it makes sense for agencies to maintain control of some HR practices like hiring, other HR practices - those that are transactional in nature and not clearly linked to agency missions - can easily be taken out of the agency domain, freeing up agency resources to do the more valuable strategic work. For example, GAO studies estimate that 70% of the HR workforce is doing transactional work. The HR LOB initiative has been launched to think through this fundamental business issue, consider business benefits and impacts, and propose a service delivery model. This model is designed to preserve some HR functions at the agency level - where it makes sense - and move other HR functions to public and private HR service centers. Over time, as the HR service centers evolve and expand their capabilities, more and more functions will shift to the service center delivery mode.

YES 20%

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: Pay adjustment for employees under the General Schedule is inconsistent, due to the definition of pay comparability in the Federal Employees Pay Comparability Act of 1990 (FEPCA; Section 529 of P.L. 101-509]. Because the statute requires pay comparability across all occupations covered under the General Schedule, the Federal government cannot pay a market rate based solely on occupation and locality. The resulting approach to across-the-board and locality pay adjustments fails to comport with the statute's original intent. One of the HC program's major overarching activities is pay policy and administration, which includes the General Schedule (GS) pay system and the requirements of FEPCA. The GS pay system is currently the primary vehicle used by the Federal government to attract and retain high quality employees, a key goal of the HC program. Although the program complies with the yearly FEPCA requirements in 5 U.S.C. 5303 and 5304, the President has the authority to submit an alternative plan administratively setting GS pay adjustments to Congress in the event of a national emergency or serious economic conditions [5 U.S.C. 5303(b)(1) and 5304(a)]. The terms "national emergency" and "serious economic conditions" are undefined in the statute. Moreover, Congress has the authority to override the alternative plan and set the adjustment rates administratively. Since 1994, either the President or the Congress has exercised its power to supersede the law, with the result that there has been no single standardized method for setting the GS adjustment rates. If fully implemented, the law would require raises for 1.8 million employees averaging about 11.71 percent in 2006. OPM has also raised concerns with FEPCA's approach to achieving overall pay comparability, as research has shown that labor markets are better defined by occupation within a locality rather than by locality generally. To overcome the problems related to FEPCA's broad definition of comparability, the HC Program has implemented Congressionally authorized pay "flexibilities" to improve recruitment and retention in hard to fill occupations. These flexibilities include special rates; recruitment, retention, and relocation bonuses; and student loan repayment programs. The HC Program has also coordinated with agencies that have been exempted from FEPCA and the traditional GS requirements included in Title 5 to ensure effective pay systems (e.g., DOD and DHS). Although the majority of pay adjustments administered by the HC Program serve the broadly defined FEPCA goals, there is one adjustment administered by the program that exhibits extensive inconsistencies: the Nonforeign Area Cost-of-Living Allowance (COLA). Authorized by 5 U.S.C. § 5941 and Executive Order 10000 (as amended), the COLA Program sets a cost of living adjustment for most white-collar civilian Federal employees in Alaska, Hawaii, Guam and the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. Approximately 49,000 employees, including U.S. Postal Service employees, receive these COLAs. The COLA adjustment is not creditable toward retirement nor considered taxable for Federal income tax purposes. The COLA is philosophically inconsistent with FEPCA because it provides a pay adjustment linked to changes (increases or decreases) to living costs measured by price surveys in lieu of the FEPCA locality adjustment that is based on local labor markets. Adjusting pay using a COLA, as opposed to a market-based pay supplement, ignores FEPCA's goal of maintaining pay and performance distinctions based on comparability of Federal pay rates with non-Federal pay rates within each defined local pay area. The absence of locality pay in the COLA areas, exclusion of COLA payments from retirement benefits, and instability of living cost comparisons with Washington, DC, over time have fueled complaints and litigation from the COLA areas, including the 2000 Caraballo settlement.

Evidence: In 2002, OPM issued "A White Paper: A Fresh Start for Federal Pay," a comprehensive examination and critique of the way the Federal government currently determines employee pay. This document was widely distributed to the Congress and other interested parties. The HC program notes that to write off OPM's efforts under FEPCA as a complete and total failure would be inappropriate. It would be more accurate to say that the HC Program has worked to modernize the General Schedule within the FEPCA framework regardless of the law's inherent flaw. Under FEPCA, the Federal Government has successfully implemented and administered a locality pay system, gained a better understanding of labor markets, developed experience in conducting and applying salary surveys, and introduced market-oriented tools such as recruitment, retention, and relocation incentives. The program's experiences implementing FEPCA have also provided the requisite institutional capacity to further modernize the Federal pay system if new legislation is passed.

NO 0%

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The HC program is designed so that all Federal agencies receive and use the standards, guidance, and tools necessary for effective and efficient human capital management within the agencies. Where there are particular HC issues within an agency (e.g., a need to streamline hiring processes), the HC program is able to target its resources and expertise to address the problem areas. All major agencies are assigned an OPM Human Capital Officer (HCO) and the small agencies are covered by a small team of OPM HCOs. The HCO acts as a single point of contact within OPM to coordinate all HC Program activities for that agency. The HCOs are also involved in the assessment of agency HC practices. As an example, each quarter, as part of the PMA Human Capital Initiative, OPM evaluates how well the 26 largest agencies and departments have met key HC standards established by both OPM and OMB. Based on the results, the HCOs focus their efforts on the areas where the agencies need the greatest assistance. It is not clear, however, that the HCOs always communicate well with the agencies under their purview. In testimony given to Congress in June 2006, the GAO Comptroller General described the human capital officer structure as a barrier to efficient customer response, and criticized OPM's guidance to agencies as "not always clear and timely." The HCOs at OPM are supposed to provide "one-stop shopping" for agencies seeking HR expertise, but the GAO testimony indicated that having the HCO as the only point of contact meant in practice that agencies on occasion could not quickly get access expertise at OPM. Not surprisingly, as any new entity with a new mission, HCLMSA has evolved and refined its understanding of the talent needed to support its new mission. A primary concern has been determining the right combination of HCO qualifications that would ensure that OPM's responsiveness to agency needs. OPM has sought to balance expertise in federal government functions, human capital management, and consulting skills among its HCO team. In addition, OPM has hired a cadre of HR specialists to team with the HCOs providing technical expertise in the areas of pay, classification, labor relations, and other more traditional HR areas. OPM also instituted the HC academy to orient new HCOs to the federal government's HR environment, and to provide continuous learning opportunities for the HCOs. OPM has formed "initiative teams" consisting of Program Managers (who are responsible for HCAAF content), HCOs (responsible for one or more agencies), HR specialists (supporting the HCOs) and policy experts from SHRP. These initiative teams collaborate in developing OPM's systems and tools such as the FHCS, PAAT, SES Certification Program, and the HR Competency model. By drawing on the combination of policy expertise (SHRP) and indepth understanding of agencies' human capital needs (HCOs), OPM is using the initiative teams to meet customers needs. The initiative teams are also designed to strengthen linkages between HCOs and policy experts within OPM, and to build HCOs' expertise in the HCAAF systems, and in other human resource policies and initiatives driven by OPM. Forums and other outreach activities provide another avenue for OPM to target its HC program resources directly to the Federal agencies. OPM hosts forums attended by agency staff on specific HC topics. Some forums are related to the release of a specific, new or amended policy ?? such as on new student loan repayment regulations ?? while other, ongoing forums focus on functional divisions of the Human Capital program ?? such as regular meetings of OPM's governance partner in the HR LOB initiative, the Multi-Agency Executive Strategy Committee (MAESC).

Evidence: The HC program employs about 31 HCOs to cover the 26 largest agencies as well as all small agencies. As evidence of HCO activities, the program provided weekly HCO meeting agendas and discussion materials that showed which HC areas were being emphasized at each meeting (e.g., hiring timelines, IT workforce initiative, mission critical gap analysis, etc.). During these weekly meetings, the HCOs share agency experiences and best practices so that other agencies can benefit from their interactions. As one example, the HCO meeting was used to disseminate a best practice accomplished during the fall of 2004, when OPM partnered with the Department of Housing and Urban Development (HUD) to implement an "Extreme Hiring Makeover." In response to HUD's request for help with hiring timeframes, OPM designed a process reengineering tool to help streamline the hiring processes at that agency. In addition, the program organized a briefing on how the HCOs evaluate agencies for the PMA Human Capital Initiative. As part of this briefing, several agency representatives acknowledged the value added by the HCOs including the leadership, tools, and training they brought to the agencies. Several agency representatives also noted that their agencies would not have been as far along in strategic HC management if it were not for the intervention of the HCOs. GAO testified on June 27, 2006, on how OPM is taking steps to strengthen its internal capacity for leading human capital reform (GAO-06-861T) and cited several areas for improvement.

YES 20%
Section 1 - Program Purpose & Design Score 80%
Section 2 - Strategic Planning
Number Question Answer Score

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: : The HC Program uses the Human Capital Assessment and Accountability Framework (HCAAF) to organize its work and the guidance it provides to agencies to achieve the program's purpose: to promote an efficient and effective, merit-based federal civil service. The HCAAF and HCAAF Practitioner's Guide organize OPM's human capital advice and leadership around key human capital management systems that together provide a consistent definition of human capital management for the Federal government: Strategic Human Capital Alignment, Leadership and Knowledge Management, Results-Oriented Performance Culture, and Talent Management. The program's performance measures include metrics that assess each of these systems' performance, as well as metrics that measure effects across the systems. The HC Program's long-term measures are 1) The Strategic Human Capital Alignment measure is the percent of agencies that meet all four requirements for an effective strategic alignment system: they implement a comprehensive human capital plan fully integrated with agency strategy and goals, analyze results relative to the plan and use them to drive continuous improvement, analyze existing organizational structures from service and cost perspectives, and have processes in place to address future changes in business needs. Success means that the Federal Human capital management meets agency mission requirements. 2) The Leadership Talent Pool measure is the percent of leadership development program graduates placed in positions of higher responsibility. Success means the Federal government has a talent pool with appropriate competencies in place as a line of succession for current leadership. 3) The Senior Executive Service (SES), Senior-Level (SL), and Scientific/Professional (ST) Performance Appraisal Certification measure is the percent of all applicant leader performance appraisals systems that are fully certified by OPM as being administered in accordance with law and regulation. Success means performance appraisal systems reward leaders who engage in high performance to accomplish agency missions. 4) The Performance Appraisal Assessment Tool (PAAT) measure is the percent of all non-executive (non-SES, SL or ST) Performance Appraisal Systems that score at least 80 out of 100 points on the PAAT. Success means that performance appraisal systems reward the Federal workforce who maintain high performance levels to accomplish agency missions. 5) The Mission Critical Competency Gap Closure measure is the number of agencies that meet their annual targets for closing mission critical occupation competency gaps. Success means agencies have the right workers in the right place at the right time to achieve agency missions. 6) The Time to Hire Government Employees measure is the percentage of hires in each agency hired within the 45-day time frame described in OPM's hiring time frame model. Success means that agencies have the right workers in the right place at the right time to achieve agency missions. 7) The Agency Migration to Shared Service Centers measure is the number of agencies that have migrated to HR LOB Shared Service Centers (SSCs). SSCs will provide more effective and efficient human resource services for all Federal workers.

Evidence: See measures tab. Most of the program's performance measures are included in OPM's Strategic and Operational Plan 2006-2010 or FY2007 Congressional Budget Justification. The measures demonstrate progress toward OPM's long-term strategic objectives. For example, the Performance Appraisal Assessment Tool measures whether human capital systems focus the Federal civilian workforce on achieving agency goals.

YES 11%

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: : The long-term targets and timeframes are ambitious. For many of the program's measures, the long-term targets are to achieve 90% or higher achievement by 2010. Long-term measures are the Strategic Human Capital Alignment, Leadership Talent Pool, SES Certification, Performance Appraisal Assessment Tool (PAAT), Mission Critical Competency Gap Closure, Time to Hire Government Employees, and Agency Migration to SSCs. The Human Capital Program's goals are to provide the policy, regulations, standards, guidance, technical assistance and tools that will enable 90% of PMA agencies to develop strategic alignment systems that effectively align human capital management to agency strategy and close mission critical occupation competency gaps to provide the human capital needed to achieve agency missions, and enable PMA agencies to make job offers within 45 days after posting vacancy announcements to prevent loss of top applicants to other organizations. For the Leadership Talent Pool measure, the goal is to encourage agencies to place approximately two-thirds of graduates with certificates in positions of higher responsibility within a reasonable period after they receive certificates. For Senior Executive Service (SES), Senior-Level (SL) and Scientific/Professional (ST) Performance Appraisal Certification and the PAAT, the long-term goals to be achieved by 2010 (50% fully certified and with a PAAT score of 80 or higher on the 100-point scale) are ambitious: For certification, the starting baseline was 5% of systems in 2004, and for PAAT, baselines are being collected in 2006 . All targets promote continued improvement, which is also reflected the program's effort to make standards for agencies more stringent on several measures: Strategic Human Capital Alignment; SES, SL and ST Performance Appraisal System Certification; and Mission Critical Occupation Gap Closure. The program has baselines for all 7 outcome measures, although the program is collecting new baselines on 3 of the measures because the measures have been modified since earlier baselines were collected: these include the PAAT, Time to Hire, and Mission Critical Competency Gap Closure measures. Baselines for 4 of the metrics are based on the same measure as will be used in FY2006 and future years: Strategic Human Capital Alignment; Leadership Talent Pool; SES, SL and ST Performance Appraisal System Certification; and Agency Migration to Shared Service Centers,

Evidence: OPM plans to include all measures in the PART in their 2006 and future Performance Accountability Reports.

YES 11%

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: Specific annual measures for the HC program include the Leadership Competency Gap Closure measure, which tracks the number of agencies that meet their annual targets of closing leadership competency gaps. This competency gap measure is closely tied to the long term Leadership Talent Pool measure, which will determine the degree to which government has a talent pool in place as a line of succession for current leadership. Other annual measures include annual efficiency measures on the cost and schedule variance for the HRLOB initiative. These include the percent difference in the amount of work performed relative to the amount of work scheduled, expressed in dollars budgeted. The other measure is the difference between budgeted and actual cost for work performed. These two measures assess how well the HRLOB initiative is on schedule and on budget. Pay-for-Performance Coverage is an annual measure tracking the number of civil service employees in performance-based pay systems. The Human Capital Program consults with agencies on new performance-based pay systems that are designed to motivate employees to engage in high performance to accomplish agency missions by linking pay systems to performance. The seven long-term performance measures are also included as annual measures: annual changes on these measures will be used to assess progress toward the long-term goals. These include the Strategic Human Capital Alignment; Leadership Talent Pool; Senior Executive Service (SES), Senior-Level (SL), and Scientific/Professional (ST) Performance Appraisal Certification; Performance Assessment Accountability Tool (PAAT); Mission Critical Competency Gap Closure; Time to Hire Government Employees; and Agency Migration to Shared Service Centers measures.

Evidence: See measures tab. OPM plans to include all measures in the PART in their 2006 and future Performance Accountability Reports.

YES 11%

Does the program have baselines and ambitious targets for its annual measures?

Explanation: All of the HC programs' 9 annual outcome measures and 2 annual efficiency measures have baselines. All 11 have ambitious, specific targets for FY2006 and future years; and 5 had targets for years prior to FY2006. Because the migration to Shared Service Centers (SSCs) began in the past year, last year's baseline for Agency Migration to SSCs was zero. The program is also collecting new baselines on 3 of the measures because the measures have been modified since earlier baselines were collected: these include the Performance Assessment Appriasal Tool (PAAT), Time to Hire, and Mission Critical Competency Gap Closure measures Annual targets show that the program aims for steady upward progression on its outcomes. For some measures, the program is raising standards: Strategic Human Capital Alignment; SES, SL and ST Performance Appraisal System Certification; and Mission Critical Competency Gap Closure. For these, 2006 targets are based on the more stringent standards and show an expected decline or lack of change compared to 2005 because all agencies that met the older standards may not meet the new, more stringent standards this year.

Evidence: OPM plans to include all measures in the PART in its 2006 and future Performance Accountability Reports.

YES 11%

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The Human Capital Program has defined program partners to include governmentwide councils and boards, Federal agencies, and contractors. Internal OPM centers also act as program partners on crosscutting issues. Multiple program partners support the Human Capital Program's goals in varying degrees. One significant program partner is the Chief Human Capital Officers Council (CHCOC). Established by the CHCO act of 2002, the CHCOC provides input to OPM on the impact of the Human Capital Program's human capital standards, guidance and policies. In its annual report to Congress, CHCOC measures and reports on its performance related to the accomplishment of the HC Programs goals. However, in June 2006 Congressional testimony the GAO Comptroller General criticized OPM's ability to take advantage of this council to collaborate with agency partners and share information. OPM has taken a renewed interest in leveraging the experience and talent of the HR community across agencies to achieve breakthroughs in the human capital transformation effort. An example of this effort is the addition of "Deputy CHCOs" to the CHCOC; OPM's regular meetings with agency Human Resource Directors to assure responsiveness to their needs; and monthly briefings that bring agencies to OPM to share best practices and lessons learned. By actively fostering partnerships with and across agencies, OPM is creating communities of practice in federal human capital management. Another significant program partner is the HR Line of Business Multi-Agency Executive Strategy Committee (MAESC). The purpose of the MAESC is to provide advice and recommendations to the Director of OPM as well as additional government-wide executive leadership for the implementation of the HR LOB vision, goals, objectives, and common solution. MAESC 's performance relative to the Human Capital program is measured by meeting enumerated goals and objectives listed in the MAESC charter. OPM partners with agencies to design and implement human resource flexibilities authorized by Congress. Two examples of this type of partnering are the human resource system development at the Department of Defense and Department of Homeland Security. By statute, OPM serves a coordinating role in the development of both agencies' new human resource systems. OPM and these agencies have a mutual interest in developing effective alternative personnel systems. DOD's and DHS's performance in these endeavors is measured through the OMB/OPM human capital scoring. OPM also has a statutory responsibility to independently evaluate DOD's National Security System. A good example of internal partnering is the Hiring Flexibilities Symposium. Held in locations throughout the United States, this training highlights discretionary flexibilities intended to improve agency hiring. The HC program partners with technical experts from OPM's Human Resources Products and Services Division and the Federal Executive Boards to develop the training. All partners have a shared interest in providing an effective training for field offices located outside the Washington DC area. The HC Program is also supported by contractors. Contractors are generally procured through OPM Training and Management Assistance program (TMA) which provides effective pre-competed, pre-approved services through an uncomplicated contracting vehicle. Contractors are held to performance expectations and the contracts include remedy clauses if those expectations are not met. Some examples of contractors procured through TMA to work HC Program projects include Humantech and Watson Wyatt. The HC program's pay policy and administration activity contracted with Humantech to provide a leadership succession model and contracted with Watson Wyatt to provide a review of compensation literature to assure that Federal compensation practices match with best practices from the private sector.

Evidence: As evidence, the program provided the Chief Human Capital Officers' charter and the 2004 annual report to Congress. Both of the statutes which authorized the new HR systems in DHS (P.L. 107-296) and DOD (P.L. 108-136) include provisions that require any regulations for these systems to be jointly prescribed with the Director of OPM.

YES 11%

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The HC Program has launched an independent evaluation effort that will regularly provide objective information about the program's impact. Based on the draft statement of requirements submitted by the program, the current evaluation is independent and sufficient in scope and quality to meet OMB's criteria for effective impact evaluation. OPM has also instituted a governing structure that will guide use of evaluation results to improve program performance through adjustments to program design and management. To date, significant aspects of the program have been evaluated on a regular basis by independent organizations such as GAO, the Merit Systems Protection Board (MSPB), and OPM's Office of the Inspector General (OIG). These independent evaluations have tracked the development and impact of OPM's HC Program. While GAO and the MSPB have focused on the substance and impact of OPM's HC Program, MSPB has also routinely investigated whether significant programs initiated by OPM comply with merit system principles. In addition to those evaluations of program impact, OPM's OIG has monitored adherence to GPRA requirements and financial management and controls. OPM has also contracted for individual evaluations of discrete human capital systems and transactions from various Federal contractors. To complement these efforts, and to ensure that a consistent evaluation methodology is in place, OPM is designing an independent evaluation system for the HC Program. This system will allow OPM to obtain information and analysis of sufficient quality, scope, and independence to inform program decision making. To date, OPM has requested contractor assistance to design and execute an independent evaluation system that provides regular data and analysis on program impact. OPM has selected Human Resources Research Organization (HumRRo), a reputable vendor recognized as a leader in human capital program evaluation, to design the independent evaluation system and execute the first evaluation of the HC Program. Design of the independent evaluation system, including recommended evaluation methodology and administrative mechanisms for incorporating evaluation findings into program planning and management, is expected to be completed by November 2006. The contractor will provide to OPM staff any training and assistance needed to manage the ongoing process of evaluations and program planning. The first independent evaluation is expected to be completed by April 2007.

Evidence: GAO: GAO is an independent, nonpartisan agency that works directly with Congress. GAO gathers information to help Congress determine how well executive branch agencies are doing their jobs. GAO's work routinely answers such basic questions as whether government programs are meeting their objectives or providing good service to the public. Ultimately, GAO ensures that government is accountable to the American people. To that end, GAO provides Senators and Representatives with the best information available to help them arrive at informed policy decisions -- information that is accurate, timely, and balanced. Since 1993, GAO has conducted more than 20 studies on functions included in the Human Capital program. These studies have addressed a wide range of topics including hiring, performance management and student loan repayments. Although GAO is not required to perform regular evaluations, there has been sufficient Congressional interest in strategic human capital management to assure that GAO is investigating some aspect of the program at least yearly. In 2001, GAO designated strategic management of human capital as a government wide high risk area. However, since its inclusion on the high risk list, strategic human capital has shown improvement. In a 2003 report, GAO acknowledged that under OPM's leadership more progress had been made in the two years since 2001 than in the previous 20 years (GAO-03-637T). Currently, GAO is engaging OPM with a General Management Review that will assess progress on the Human Capital Program, including internal processes for program and financial planning and management. OIG: Since 2000, OPM's OIG has conducted ongoing evaluations of OPM's compliance with GPRA requirements. Semi-annual reports from 2000 on have demonstrated an "overall improvement" in OPM's strategic planning. Specific OIG findings from the October 2000 Semi-Annual Report include: ?? "Identifying and describing those resources necessary to accomplish specific goals" ?? Continuing the effective mid-year performance assessment that OPM launched in 2000 for management control of performance data quality ?? Improving the audit trail for specific goals and measures, including demonstrating results ?? Clarifying goals and results in response to specific management challenges identified by Congress and GAO. OIG consistently reports a high level of responsiveness by OPM management in correcting reported deficiencies in performance management. Merit System Protection Board The MSPB is an independent, quasi-judicial agency in the Executive Branch that serves as the guardian of Federal merit systems. Per 5 U.S.C. § 1204, the MSPB is empowered to conduct special studies relating to the civil service and the merit system. Historically, the MSPB has issued about three of these special studies each year on specific topics within the purview of the Human Capital Program like probationary periods and the Federal Career Intern Program. The MSPB is further required by 5 U.S.C. §1206 to report annually to Congress and the President on the significant actions taken by OPM and whether those actions comply with the merit system principles. These yearly reviews assure that Human Capital Programs standards, rules and regulations advance the Federal merit system.

YES 11%

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The Human Capital program's recent budget requests have been explicitly tied to accomplishing its annual and long term goals. The most recent request, the FY 2007 Congressional Budget Justification and Performance Budget, included sections detailing the program's priorities for the year, how these priorities will impact OPM's strategic objectives, targets for performance measures, and the changes in funding requested. The display clearly shows what additional impact would be accomplished with the requested funding and FTE levels. The FY 2007 budget also displayed the costs of rent and other centrally funded items (i.e., indirect costs) in the program so that the full costs of the program was identified. It is expected that for the FY 2008 budget request, the program's performance measures and targets will be updated to reflect the measures and targets presented in Questions 2.1 through 2.4 of this PART document as well as OPM's recently released "Strategic and Operational Plan 2006-2010." In addition, the HRLOB division completes a Capital Asset Plan (CAP) for its activities. The 2007 CAP clearly presents how budgeted funds support the program's mission and strategic goals and objectives as well as the strategic goals from the President's Management Agenda. The CAP also details how the funds will reduce costs and improve efficiencies.

Evidence: The FY 2007 budget request shows total funding requested and associated FTE with measures/indicators and targets. The request also breaks out costs by line item expenditures (e.g., personnel compensation and benefits, travel, equipment, etc.) and by funding type (e.g., directly appropriated salaries and expenditures, trust fund, etc.). The budget request shows that OPM is already in the practice of associating funding requests with specific goals and will be able to fully incorporate the newly established performance measures and targets in next year's budget request. In terms of budget development, OPM's HC program develops its budget request using a zero-based budgeting approach whereby the funding is based on the planned activities needed to achieve program outcomes rather than requesting an incremental increase from previous year's spending. Other evidence includes the HRLOB 2007 Capital Asset Plan.

YES 11%

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: In 2003, OPM reorganized its management structure to improve its strategic planning and execution by better tying specific activities of the Human Capital Program which impact mission accomplishment to resources and outcome performance metrics. It created the Division for Human Capital Leadership & Merit System Accountability (HCLMSA) (which includes both the compliance program and OPM's human capital program), the Strategic Human Resources Policy (SHRP) Division, and the Office of Human Resources Line of Business (HRLOB). These changes are detailed in successive budget submissions. OPM's new Strategic and Operational Plan 2006-2010 builds upon this reorganization by setting straightforward and identifiable goals tied to the HC Program with dates for clear accountability. Subsequent budget submissions will tie resource requests to these (and other) operating goals. Leadership from the HC Program were active partners in the generation of this new plan. OPM has created a new, comprehensive governance process. Senior HC program management meets monthly with OPM's Director to review progress in achieving the operational goals detailed in the new strategic plan. In addition, quarterly operations reviews conducted with the Office of the Chief Financial Officer assess progress based upon budget and performance data, targets, and operational plans. The HC Program is actively striving to improve its response to customer requirements in its strategic planning and operations. It created an OPM contact point for each agency, the Human Capital Officer (HCO), who serves as the "customer service representative" through which agencies and OPM can work to identify and solve agency issues. The HCO is the agencies' OPM representative for the PMA's Human Capital Initiative. The improved communication allows OPM to better identify its strategic priorities based upon agency need. The HR LOB Multi-Agency Executive Strategy Committee (MAESC) has been chartered by the Director of OPM to continue and implement the work of the HR LOB, including the common solutions defined by the HR LOB Task Force. The purpose of the HR LOB MAESC is to provide advice and recommendations to the Director of OPM as well as additional government-wide executive leadership for the implementation of the HR LOB vision, goals, objectives, and common solutions. The HR LOB MAESC attempts to reach consensus on advice and recommendations. These recommendations are incorporated into the HR LOB's strategic planning. Through the PART process, the HC program has reviewed its long-term and annual performance goals, particularly in light of the new strategic plan. It will be incorporating these in future budget submissions.

Evidence: Evidence includes progress in tying the accomplishment of annual and long-term performance goals to budget requests as seen in changes to the annual budget submissions to OMB and the Congress; OPM's Strategic and Operational Plan 2006-2010; Quarterly review binders; OPM's Strategic and Operating Plan 2006-2010 progress reports; MAESC Charter and meeting minutes and suggestions acted upon in reports.

YES 11%

Are all regulations issued by the program/agency necessary to meet the stated goals of the program, and do all regulations clearly indicate how the rules contribute to achievement of the goals?

Explanation: The HC Program promulgates only those regulations that are required or authorized by statute or Executive Order and are necessary to meet the stated goals of the program. These regulations are necessary to promote an efficient and effective, merit-based federal civil service. The regualtions clearly indicate how the rules contribute to the achievement of the goals. Generally, the program's regulations set clear implementation standards to meet statutory requirements. For instance, 5 U.S.C. 5379 authorizes agencies to establish their own student loan repayment programs to attract or retain highly qualified employees. For this regulation, OPM clarified employee coverage and loan eligibility; set standards for employee service agreements; and established agency reporting requirements. When promulgated in the Federal Register, each OPM regulation clearly articulates in the supplemental sections the HC management practice or process addressed and explains how the rule elements will affect agency HC management. OPM has also initiated a strategy to make their regulations more readable by including question and answer formats and updating regulations with plain language rewrites.

Evidence: Recent OPM regulations that demonstrate how HC management practices are emphasized include: - No Fear Act (PL 107-174, 5 USC 2301), Regulations at 5 CFR 724; - 5 U.S.C. § 5304 (Locality Pay), Regulations at 5 CFR 531 Subpart F; - 5 U.SC. § 5941 & EO 10000 (Nonforeign Cost of Living Adjustment, COLA), Regulations at 5 CFR 591; - 18 U.S.C. § 207(c) (SES Post Employment Restrictions), Regulations at 5 CFR 730; - 5 U.S.C. § 55 (Pay Administration), Regulations at 5 CFR Parts 294, 359, 362, 451, 530, 531, 532, 534, 536, 550, 591, 630, 831, and 842; - 5 U.S.C. § 5379 (Student Loan Repayment), Regulations at 5 CFR 537; - 5 U.S.C. § 5753 ( Recruitment Incentives) (Relocation Incentives) (Retention Incentives) [Workforce Flexibility Act], Regulations at 5 CFR 575 Subpart A, B and C (May, 2005); - 5 U.S.C. § 5541- 5550a ( Premium Pay), Regulations 5 CFR 550; - 5 U.S.C. chapter 63 (Leave Administration), Regulations at 5 CFR 630; - 5 U.S.C. § 61 Subchapter II (Flexible and Compressed Work Schedules), Regulations at 5 CFR part 610, subpart D; - 5 U.S.C. § 5305 (Special Rates), Regulations at 5 CFR 530 Subpart C; - 5 U.S.C. § 3301, 3302, EO 10577 (Schedule A, B, C appointing authorities), Publish biannual Federal Register Notice on Excepted Service Hiring; - 5 U.S.C. § 3304 (Direct hire authority), Regulations at 5 CFR 337 Subpart b; - 38 U.S.C. § 4214 (Veterans Readjustment Appointment), Regulations at 5 CFR 307; - 5 U.S.C. § 3112 (Disabled Veterans Appointment) Regulations at 5 CFR Parts 300, 307,315, 316, 330, 335, 550, 551, and 720; - EO 12364 (PMF program, amended by EO 13318), Regulations at 5 CFR, Parts 213.3102 (ii), and 315.708; - EO 13162 (Career Intern Program), Regulations at 5 CFR Parts 213 AND 315; - 5 U.S.C. § 7201 (Federal Equal Opportunity Recruitment Program), Regulations at 5 CFR 720; - 5 U.S.C. chapter 41 (Training), Regulations at 5 CFR §§ 410 and 412; and, - 5 U.S.C. §§ 3521-25 (VSIP's), Regulations at 5 CFR 576.

YES 11%
Section 2 - Strategic Planning Score 100%
Section 3 - Program Management
Number Question Answer Score

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The program regularly collects performance information, and in several areas has established baseline data, to help manage the program and improve performance. The program has also collected data on the performance of its partners, and uses the data to make informed resource and program decisions. The HC Program considers other agencies its partners in advancing the President's Management Agenda. Together with OMB, HCLMSA scores agencies quarterly on their progress in the Human Capital Initiative. Based upon the results, the program determines agency support needs and makes appropriate resource decisions. Quarterly scoring is based on annual goals , specific agency deliverables that the HC program sets for each major agency's human capital improvement. The program also reviews these results quarterly and makes program decisions based upon the results. The HC Program maintains a database to track the use of all flexibilities. It regularly generates reports on flexibility use, and uses this information to assist agencies in addressing their most pressing problems. For example, at the Department of the Interior, an analysis of hiring flexibilities use (above and below average) led to Proud to Be goals entailing the improved use of hiring flexibilities to meet that agency's human capital needs. The HC Program conducts the Federal Human Capital Survey once every two years, with a smaller organizational survey conducted in the between years. The results of these surveys are used to assess the state of the civilian workforce. The surveys provide quantifiable measures on numerous areas, and the HC Program assists agencies to use results to create action plans for improving agency HC management. A separate customer satisfaction survey, targeted to the HC Program's partners, has been piloted and is planned for implementation in FY2006. The results of these are used to identify trends, evaluate personnel initiatives and policies, measure HC Program performance, and make resource allocation decisions. For example, through the FHCS and scoring results, the HC Program identified needs in the Performance Culture system. As a result, it allocated resources to improve performance management mechanisms and appraisal tools. Another example is the Career Patterns initiative, which was based upon government wide FHCS and PMA scoring information. OPM has resourced this initiative to identify federal workforce Career Patterns for the future with accompanying requirements/impact. OPM's Strategic Plan contains specific objectives the Human Capital Program is responsible for achieving. Progress in achieving these objectives is monitored and reported monthly. Any issues affecting progress are discussed and appropriate decisions are made to improve performance. On a monthly basis, actual spending is compared to budgeted spending with the goal of ensuring efficient and effective use of resources. Budget reports are prepared and reviewed by the program monthly. The operating budgets are reviewed quarterly with the OCFO, and any variances are addressed. The Office of the HR LOB prepares monthly earned-value management reports. These detail the progress of the project versus schedule. Regular meetings are held to review variances and make program adjustments where necessary. The HC program regularly approves of and coordinates with demonstration projects for human capital initiatives. It collects the results of these projects and uses them to improve tools, guidelines, and standards before implementing them government wide. For example, an analysis of how agencies are closing competency gaps led to an improvement in the Performance Appraisal Assessment Tool's measurement of competency gaps, and the implementation of a Beta site focused on this issue.

Evidence: 1. Sample agency scorecard 2. Sample agency "Proud to Be" goals 3. Customer satisfaction survey 4. Federal Human Capital Survey results 5. Organizational Assessment survey 6. Sample monthly and quarterly CFO report 7. Sample HCL staffing/vacancy report 8. Sample work reporting chart 9. Sample contractor management plan 10. HRLOB Earned Value Management report 11. CHCO Council meeting minutes, sub-committee and workgroup products 12. MAESC Committee meeting minutes and suggestion tracking report 13. Example demo project - competency gap beta site 14. Agency request tracking report 15. OPM Strategic Plan 2006-2010, HC program objectives breakdown 16. DOI hiring flexibility analysis report

YES 11%

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: The program's executives and managers are held accountable for performance results through the performance appraisal process. OPM's Director holds Associate Directors accountable for achieving OPM's strategic and operational goals through monthly reviews. Individual managers' performance plans include expectations that are linked to operational goals and strategic objectives. All manager performance plans have been reviewed in light of OPM's new strategic plan, and OPM's operational goals are being incorporated into individual performance plans to contain quantifiable performance standards. For example, in HCLMSA, a committee meets monthly to review progress in implementing individual performance plans specifically linked to program objectives and outcomes. The HRLOB, which has a clear set of deliverables for the FY2006 and FY2007, holds its managers accountable for their delivery through a similar process. Program managers are held accountable for cost, schedule, and performance results through the annual performance review, mid-year performance review, and quarterly financial and performance metric reviews. Managers in turn hold their employees accountable through their performance plans for providing work products that meet standards for quantity, quality, and timeliness. OPM holds its program partners (agencies) accountable through Proud to Be goals. These are reviewed quarterly with agencies and progress reported to OMB. The Office of the HR LOB signs Memoranda of Understanding (MOU) with agencies clearly detailing OPM's and the agencies' responsibilities. Performance in implementing the MOUs is reviewed monthly and appropriate actions taken. The performance of contracted program partners is built into task orders, and the HC Program continuously monitors partner performance using project plans that outline deliverables, delivery dates and milestones, and associated costs. Where possible, OPM utilizes fixed price contracts. The HR LOB is held accountable for progress by OPM's Investment Review Board. HRLOB's progress in meeting milestones and targets for its CAP performance indicators is assessed quarterly, and the results are presented to OPM's Director. OMB also holds the HR LOB accountable through monthly Earned Value Management reports and reviews.

Evidence: 1. Sample presentation, AD review with Director 2. Sample SES and manager development plans, work plans 3. Sample annual goals 4. MOUs between agency and HR LOB 5. HRLOB deliverables 6. Investment Review Board 7. EVM reports 8. OCFO BPI reports

YES 11%

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: The Human Capital Program's funding is budgeted through OPM's S&E account (with the exception of a small amount of funding provided by agencies to HRLOB), and these funds are obligated in a timely manner. The program budgets expenditures by object class by month, and compares actual spending to budgeted spending monthly. In addition to obligations by object class, the program also reviews actual spending by major projects to ensure resources are targeted toward prioritized initiatives. The program is managed consistent with the goals and priorities outlined in OPM's strategic plan. No funds allocated to the program are redirected to other OPM programs. Together with the OCFO, formal quarterly assessments are conducted with the Director of actual and projected expenditures. This assessment covers costs associated with salaries and benefits, travel, and other objects such as training. This process facilitates resource planning and management, allowing for adjustments as needed to accomplish identified program needs. To ensure that funds are obligated and spent as intended, the program analyzes OPM's Government Financial Information System (GFIS) transactions to identify and resolve any problems pertaining to funds being obligated and expensed. OPM budget staffers establish budgetary resource levels in GFIS for each fiscal quarter against which the program charges appropriate business expenses, most of which are payroll costs. OPM budget and financial management staff post in GFIS, or record on the financial statement worksheets, any necessary corrective entries so that the financial information received by management is complete and accurate. Although there exists a long-standing fund imbalance with Treasury which affects OPM's entire Salaries and Expense (S&E) account, this imbalance is tracked separately by financial management staff in a suspense fund. OPM has never had an audit finding that funds were not spent as intended.

Evidence: 1. Monthly budget spending report from OCFO 2. Project spending report 3. SHRP and HCL monthly spending reports 4. Quarterly Director's spending and performance report 5. GFIS reports 6. FY 2005 OPM Performance and Accountability Report, including OPM's submission for risk assessments under the Improper Payments Information Act (pp 42 - 46)

YES 11%

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: Projected improvements in efficiency and effectiveness are an important part of making program decisions. The program has several established procedures for improving efficiency. There is an Investment Review Board which reviews all IT projects , including the HRLOB. For example, two of the IT investment decisions made by OPM in FY 2005 are a direct effort to improve efficiency and effectiveness. One was to invest in a new electronic document management system in response to delays in document processing under the current system. For OPM to be efficient and responsive, it needs to quickly turn around a variety of requests, opinions, positions and guidance clarifications. The new system will significantly reduce staff time spent on document processing, improve document tracking, provide important metrics and improve goodwill among OPM's stakeholders. The second was the decision to invest in upgrading its financial system to provide better controls and management reporting than the current system, allowing better program management. All major contracts are rigorously competed, including those through TMA. For example, a recent requirement received four proposals. Where feasible, the HC programs lets performance-based or firm-fixed price contracts achieve cost efficiencies. The HC Program has a system to take into account the additional HR IT costs caused by new or changed policies. For example, a single change in the proposed start date for a new way of calculating vacation time was estimated to have saved the government and OPM several million dollars. The goal of the HR LOB is to allow the Federal civilian workforce to focus on improved management, operational efficiencies, cost savings or avoidance, and improved customer service. Thus the initiative will allow agencies to transform their internal human resources focus from administrative processing to strategic planning support for agency leadership and increase customer service and counseling for managers and employees. The HC Program tracks two efficiency measures, both based on the HR LOB's effectiveness in keeping the HR LOB initiative on schedule and within budget. It utilizes OPM's Earned Value Management system, which became operational in FY2005, to track these measures monthly. The current measures are design- and implementation-stage efficiency measures for the HR LOB until it is fully operational. Once most agencies are using the Shared Service Centers (SSC), OPM will then use as its efficiency measure the cost of processing personnel transactions at the SSCs.

Evidence: 1. Investment Review Board Evidence 2. Document Management System Business Case 3. TMA competition guidelines 4. Estimates savings by start date change 5. HR LOB CAP 6. Efficiency measures (see measures tab)

YES 11%

Does the program collaborate and coordinate effectively with related programs?

Explanation: As noted in the response to question 1.3, there are no other programs with responsibilities similar to the HC program. It would be inappropriate for OPM to partner with agencies that independently audit or assess HC programs, such as MSPB or GAO, since most of the time those agencies are also assessing OPM's activities. Also, the agencies are more of the HC program's partners rather than related programs so collaboration leading to management and resource allocations would seem impractical between the two.

Evidence: Not applicable.

NA 0%

Does the program use strong financial management practices?

Explanation: OPM's annual consolidated financial statements are independently audited by a well-recognized international CPA firm. These auditors reported no material internal control weaknesses from their audit of OPM's financial statements for FY 2005. The HC Program is funded through appropriated General Funds through OPM Salaries and Expenses account and the auditors identified deficiencies in OPM's controls over the S&E account that are not considered a material weakness. OPM is correcting these deficiencies. In addition, the program has procedures in place to ensure that payments are made properly for the intended purpose, and OPM has identified no erroneous payments. OPM's financial management systems meet statutory requirements and financial information is recorded accurately and timely. The program uses weekly, monthly, and quarterly financial and performance data to support its day to day operations. For example, weekly timeliness reports track responses to agency requests, monthly financial reports track spending versus budget, quarterly agency HC scorecards track the progress of agency HC Initiative implementation and EVM project tracking tracks the progress of HR LOB implementation.

Evidence: 1. FY2005 PAR with independent auditor's opinion 2. Monthly status of funds reports 3. Weekly agency timeliness reports 4. Quarterly agency scorecards 5. HR LOB EVM reports

YES 11%

Has the program taken meaningful steps to address its management deficiencies?

Explanation: During FY 2006, OPM under the leadership of its new Director undertook an extensive review of its mission and strategic plan. As a result, it recently issued a new Strategic and Operating Plan 2006-2010. This new plan represents a clear effort to make OPM's goals and operations more transparent and accountable. As a result, HC program managers have clear deliverables with dates assigned to them. A system of review has been put into place whereby progress in operational goal attainment is discussed, as well as plans to correct any deficiencies in execution. This system is cascaded throughout management, with the Director discussing performance with the Associate Directors, who discusses performance with the Deputy Associate Directors, and so on. The Office of the HRLOB reviews and updates its Project Plan monthly and conducts project evaluations for in accordance with EVM standards. If and when there is a deficiency, the program works with appropriate program managers, contractors and/or partners to identify the best solution and develop action plan for corrective action if necessary. Deficiencies are also identified and corrected through regular status reporting at the MAESC. In a similar effort, HCLMSA has developed a system to track, report on and make managers accountable for the time to fill staffing vacancies. As a result, the average time to fill a position has been reduced. A committee meets once a week to review performance results, discuss process improvements, and ensure targets are met. OPM continues to focus its efforts to substantially improve the agency's financial management, internal controls, operations, and reporting. OPM's CFO has received the agency's sixth consecutive unqualified ("clean") opinion on the agency's FY 2005 annual consolidated financial statements. The OCFO identified that it was not meeting the requirements of the Prompt Payment Act. It reviewed its procedures and made changes to improve payment processing. It now generates monthly reports of prompt payment metrics, reviews the results, and continues to modify its processes and procedures as needed. As a result, payments made within guidelines have increased. OPM continues to substantially improve its financial management, internal controls, operations, and reporting. OPM received its 6th consecutive unqualified (i.e., "clean") opinion on the agency's FY 2005 annual consolidated financial statements. In addition, OPM developed and successfully executed a corrective action plan for the material internal control weakness identified and reported by the auditors during the FY 2004 financial audit. The material weakness related to internal control over financial reporting and its operations within the RF and S&E accounts. These conditions were improved during FY 2005 and the auditors lowered the material weakness to a "reportable condition" in FY 2005. The program has a system for identifying and correcting program management deficiencies and uses the system to make necessary corrections within agreed upon timeframes. Specifically, monthly financial reports are communicated to program managers and monthly meetings are held with program and financial management to review the reports and identify inaccuracies and other issues. In addition, the OPM Director conducts quarterly financial and performance reviews with all OPM executives. Finally, OPM's Center for Internal Control and Risk Management oversees OPM's internal certification process for the Federal Managers Financial Integrity Act, and tracks corrective actions regarding all recommendations from independent auditors and 3rd party reviews of OPM programs.

Evidence: 1. OPM Strategic Plan 2006-2010 2. HR LOB Earned Value Management reports 3. MAESC working group meeting minutes 4. Quarterly Director's review summary 5. Hiring committee reports and results 6. Prompt payment reports 7. Detailed remediation plan to overcome FY 2004 audit findings and current status update

YES 11%

Did the program seek and take into account the views of all affected parties (e.g., consumers; large and small businesses; State, local and tribal governments; beneficiaries; and the general public) when developing significant regulations?

Explanation: The Human Capital Program solicits public comments through the Administrative Procedure Act's informal rulemaking process. The Human Capital Program's regulatory agenda is published in the Federal Register, inviting the public to comment on proposed and interim rules. Final rules reflect the input of proponents and opponents, and describe the manner in which public comments were taken into consideration. Program websites also post significant rulemakings. All significant rulemakings were reviewed by OMB and included appropriate analyses and coordination. A prime example of the Human Capital Program outreach to stakeholders in the regulatory process was the development of the National Security Personnel System regulations (NSPS). Prior to publishing a proposed rule, OPM and the Department of Defense met with labor unions, veterans groups, and other stakeholders including NAPA to discuss concerns about the new system. After publishing a proposed rule, the Human Capital Program assisted in the analysis of approximately 10,000 comments on the proposed NSPS. The Human Capital Program also assisted with the statutorily established "meet and confer" process with affected DoD labor unions. All of this outreach and collaboration is reflected in the preamble to the final NSPS regulations. The HR LOB actively seeks the views of all affected parties, incorporating majority views into final design and standards. It does so through the MAESC and its various sub-committees.

Evidence: Final NSPS regulations MAESC suggestions acted upon, meeting notes

YES 11%

Did the program prepare adequate regulatory impact analyses if required by Executive Order 12866, regulatory flexibility analyses if required by the Regulatory Flexibility Act and SBREFA, and cost-benefit analyses if required under the Unfunded Mandates Reform Act; and did those analyses comply with OMB guidelines?

Explanation: Regulatory impact analysis is conducted when appropriate, but this is extremely rare since the great majority of OPM regulations do not meet the standard of significant regulation as defined by Executive Order 12866. Two recent examples of significant regulations issued in part by OPM are the new personnel system regulations for the Department of Defense and the Department of Homeland Security. Both regulations were categorized as significant regulatory actions because the significant public interest in revisions to the Federal employment system. Regulatory analysis consistent with EO 12866 was prepared in both instances. However, given that neither system would have an economic impact of more than 100 million dollars in any year, these regulations were not classified as economically significant and, thus, no regulatory impact analysis was conducted.

Evidence: NSPS regulations DHS regulations

YES 11%

Are the regulations designed to achieve program goals, to the extent practicable, by maximizing the net benefits of its regulatory activity?

Explanation: When promulgating regulations, the Human Capital Program maximizes the net benefits of its regulatory activity to the extent practicable. The program's non-discretionary regulations are required by statute, which generally prescribe compliance, recordkeeping, and reporting requirements. However, agencies that cannot reasonably implement a regulation because of economic or other realities can seek a variation from the program's regulatory agenda. Under Civil Service Rule 5 (5 C.F.R. part 5.1), the Director of OPM has limited authority to grant a variation from the strict letter of the regulation if the variation is within the spirit of the regulation and the agencies can show practical difficulties or hardships related to complying with the regulation. Given the recent momentum behind increased human capital management flexibilities, however, requests for these variances are increasingly rare. One area where the Human Capital Program regulations have provided agencies flexibility is hiring. Whereas agencies were previously limited with respect to hiring authorities, Congress has authorized OPM to approve hiring flexibilities to assist agencies in recruiting for difficult-to-fill positions. OPM has the authority to grant direct hire authority or excepted service hiring authority when there is a special need or when it is not feasible to use traditional competitive hiring procedures. Agencies also have the option to select candidates using category ranking as an alternative to the traditional numerical rating, ranking, and selection procedure. Category rating is an effective tool when meaningful differences in competency levels are important but may be difficult to assess using traditional selection procedures. Moreover, parts of the Human Capital Program's regulations are discretionary and can be used by agencies when appropriate. Two examples of these types of flexibilities are recruitment, retention, and relocation bonuses and student loan repayment programs. Agencies are not required to use either flexibility, but the Human Capital Program encourages and monitors their use. If the agency believes the flexibility would be advantageous for hiring or retention, the agency can use the flexibilities as prescribed by regulation.

Evidence: 5 C.F.R. part 5 Category Rating: 5 USC 3319 5 CFR 337, Subpart C (reference 69 FR 33271). Excepted Service Hiring: 5 U.S.C. 2103. 5 CFR part 6, Exceptions From the Competitive Service (Rule VI) provides extensive information about the authority to except positions from the competitive civil service, including definitions of the types of positions granted under Schedules A, B, and C. This rule also requires OPM to publish notice of all exceptions granted under Schedules A, B, and C. Excepted Service; Consolidated Listing of Schedules A, B, and C Exceptions. 70 FR 2284 (January 12, 2005). 5 CFR part 213 (January 1, 2004). Direct Hire: Chief Human Capital Officers Act of 2002. Federal Register Notice (Volume 69, Number 114). 69 FR 33271 (codified in 5 CFR part 337) 5 CFR 337.203(public notice requirements).

YES 11%
Section 3 - Program Management Score 100%
Section 4 - Program Results/Accountability
Number Question Answer Score

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: For FY2006, the program met or exceeded the targets for 4 of the 7 measures. The program failed to meet targets for the Leadership Talent Pool measure and the SES Certification measure. The Performance Appraisal Assessment Tool (PAAT) measure is a new measure establishing baselines in FY2006. On 3 of the 7 long-term measures, the program met past targets on earlier versions of its measures: in FY2004 and FY2005 on the earlier version of PAAT measure; in FY2004, though not in FY2005, on its Mission Critical Competency Gap Closure measure; and in FY2005 on its Time to Hire measure. The earlier PAAT measure has data from FY 2003 through FY 2005 that show agencies making progress in improving the quality and rigor of their performance appraisal systems. In FY 2003, 4 agencies demonstrated to OPM that their appraisal systems were rigorous according to comprehensive set of criteria (see explanation in measures tab). By FY 2005, the number of agencies with satisfactory appraisal systems increased to 20. Beginning with FY 2006, OPM is using the Performance Appraisal Assessment Tool, which incorporates the same criteria, to determine whether agencies' appraisal systems pass muster. OPM has also demonstrated progress in meeting its long-term goals for its Mission Critical Occupation Gap Closure measure. From FY 2003 to FY 2005, the number of agencies making significant progress toward closing mission critical occupation competency gaps increased from 2 to 20. The program met its FY 2006 targets for the Mission Critical Competency Gap Measure. The program has already met its FY2006 target for a fourth measure, Agency Migration to Shared Service Centers. During FY 2006, five agencies migrated to Shared Service Centers under the HR LOB initiative. This result already exceeds the baseline of zero in FY 2005 and the target of 3 for the year on Agency Migration to Shared Service Centers. On 3 other long-term measures, the program has historical data, although actual targets were not set until this year The Strategic Human Capital Alignment measure shows improvement in results from FY2003 through FY2005. The FY2006 target was met. For this measure, the program is applying more challenging standards in FY2006, so future targets have been set to take the new standards into account. The Senior Executive Service, Senior-Level, and Scientific/Professional Performance Appraisal Certification began in late 2004, so the baseline for this measure was established in FY 2005. The percent of applicant systems that were fully certified was basically stable from late 2004 to 2005; however, the number of systems applying for certification increased in 2005. Targets for this measure have been set for FY2006 and future years, but the program failed to achieve its 2006 targets. For the Leadership Talent Pool measure, results have been stable (not significantly different in statistical tests) for the last three years, and targets met for FY2006.

Evidence: See measures tab.


Does the program (including program partners) achieve its annual performance goals?

Explanation: The program has achieved its annual performance goals for 6 of its 9 annual outcome measures in FY2006. Only the Leadership Talent Pool measure and the SES Certification measure missed their assigned targets. The Performance Assessment Appraisal Tool measure is new and FY2006 is the baseline year. The program previously achieved its annual goals for 3 of its 9 annual outcome measures - Performance Appraisal Assessment in FY 2004 and FY2005, Time to Hire in FY2005, and Agency Migration to Shared Service Centers in FY2006??as well as for its 2 annual efficiency measures, Shared Service Centers Schedule Variance and Cost Variance. In addition, the program made notable progress toward achieving the annual targets for the Mission Critical Competency Gap Closure measure. The Strategic Human Capital Alignment data from FY2003 through FY2005 show progress on long-term performance goals and targets were met in FY2006. The program also collected new baseline data for Leadership Competency Gap Closure and Time to Hire Government Employees measures because these measures have been modified. Both measures achieved their targets in FY 2006. Future year targets have been refined using new baseline data. Finally the program met its targets for the Pay-for-Performance Coverage measure and the Leadership Competency gap Measure. Targets for the Leadership Competency Gap Closure measure will assume that agencies will eventually meet 100% of their gap closure objectives.

Evidence: See measures tab.


Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: As of August 1, 2005, the Human Capital Program's HR LOB implemented an ANSI 748-compliant earned value management system (EVMS) solution. The EVMS produces a uniform reporting and project control mechanism implemented across the e-Gov program at OPM. It includes both government and contractor costs. To achieve this capability, OPM acquired an industry best-practices tool (Primavera). Primavera is a suite of tools, interfaces, and supporting processes that tie together to produce EV management information. This EVMS structure consolidates the scheduling inputs with the necessary financial information and enables EVMS reporting capabilities both at the Initiative and Program levels. The Program is producing Contract Performance Reports (CPR) as of this date. The measures for HR LOB Schedule Variance and Cost Variance assess how well the program is meeting its performance plans. Results for FY2006 show that the program is on target on both efficiency measures. On both the HR LOB Cost and Schedule Variance measures, variances are well within the targeted allowed variance (i.e., within plus or minus 10 percent of planned costs and schedule). The measures being used are interim efficiency measures for the HR LOB until the initiative has fully come on line. Once the HR LOB is fully operational (when most agencies are using the Shared Service Centers (SSC)) OPM can then identify efficiency measures based on the cost or timeliness of processing personnel transactions. The unit costs of processing transactions in the SSCs can then be improved upon and also compared to the unit costs of processing the same transactions in agencies that are not using an SSC.

Evidence: HR LOB Earned Value Management System reports


Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: Aside from OPM's Human Capital Program, no other Federal or private sector entity provides oversight and sets standards for the Federal merit-based employment system. Therefore the best comparators for OPM's HC Program are the personnel management agencies of other national governments, such as Canada's Public Service Human Resource Management Agency, the Australian Public Service Commission, New Zealand's State Service Commission, and the British Public Service. Unfortunately no independent organization has tried to objectively compare various national governments' personnel management agencies. However, there are several ways one could try to gauge whether the HC Program compares favorably to analogous efforts in other countries. One approach is to compare the progress OPM has made in overhauling hiring practices with that of its counterpart in Canada. Looking at the time required to hire an employee, OPM's HC Program appears to compare favorably. In the Canadian government, an average of 17 weeks is needed to staff a permanent position via a competitive process (according to the 2004-2005 Annual Report of the Public Service Commission of Canada). By comparison, GAO reported in 2003 that the average time to complete all steps in the competitive hiring process in the U.S. government averaged 102 days. Furthermore, by 2005, hiring a General Schedule, non-Senior Executive Service employee required an average of 37 days for 26 agencies subject to the President's Management Agenda (PMA). Gauging the relative success of OPM's HC Program could also involve looking at employee performance appraisals. According to the results of a survey of Senior Civil Service (SCS) leadership in the United Kingdom (analogous to SES), less than half, or 44%, of SCS officers indicated that their department had put performance improvement plans in place for the 20% of SCS officers in the organization who needed development. Broadly speaking, the HC Program compares favorably, given that 40 out of 45 agencies who applied to OPM for SES performance appraisal system certification met the standards for provisional certification, and could use performance-based pay systems to encourage higher productivity and deprive low performers of pay increases. Another means of assessing whether the HC Program compares favorably to its peers involves analyzing the results of employee satisfaction surveys, to see if the results can be used to show that employees under OPM's watch are more satisfied with certain aspects of their jobs. It is not clear that this is the best way to gauge the impact of an initiative like the HC Program, but it does provide some insight into certain job attributes that the HC Program can influence. For example, compared to the 2005 Canadian Public Service Employee Survey (PSES), which showed that 52% of Canadian government employees believe their supervisor helps them determine their learning needs, the 2004 U.S. Federal Human Capital Survey (FHCS) ?? 2005 results are not yet available ?? indicated that 65% of Federal workers believe their supervisors support employee development. The PSES and FHCS surveys also showed that Federal employees were no worse off than their Canadian counterparts when it came to fear of reprisals. For both governments about half of the employees felt they could disclose violations without fear.

Evidence: Public Service Commission of Canada (2005). Public Service Commission 2004-2005 Annual Report. Ottawa, Canada: Public Service Commission of Canada. At www.psc-cfp.gc.ca. U.S. Government Accountability Office (2003, May). Human Capital: Opportunities to Improve Executive Agencies' Hiring Processes, GA-03-450, Washington, DC Public Service Human Resources Management Agency of Canada. At www.hrma-agrh.gc.ca/survey-sondage. Opinion Research Corporation. (2005). Senior Civil Service Leadership and Skills Survey. Available at www.civilservice.gov.uk/archive/delivery_and_reform/senior_civil_service/leadership_and_skills_survey/index.asp Cabinet Office (2006). Civil Service Statistics: Staff Surveys. Available at www.civilservice.gov.uk/management/statistics/news/staff_survey/index.asp Commonwealth of Australia (2005). State of the Service Employee Survey Results 2004-2005. Australian Government, Australian Public Service Commission. Available at www.apsc.gov.au/stateoftheservice/0405. Commonwealth of Australia (2004). State of the Service Employee Survey Results 2003-2004. Australian Government, Australian Public Service Commission. Available at www.apsc.gov.au/stateoftheservice/0304. Commonwealth of Australia (2003). State of the Service Employee Survey Results 2002-2003. Australian Government, Australian Public Service Commission. Available at www.apsc.gov.au/stateoftheservice/0203. New Zealand State Services Commission (2006). Career Progression and Development Survey, 2005: Results for the New Zealand Public Service. Available at www.ssc.govt.nz/display/document.asp?docid=5310.


Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: To date, no independent evaluation of sufficient scope and quality has been completed for the HC Program, although the program is currently implementing its first comprehensive independent evaluation of the HC Program. The evaluations conducted to date by independent entities (GAO, MSPB) indicate that the Human Capital Program is making progress in improving HC management in agencies. Elements of the Human Capital Program have been assessed by the Government Accountability Organization (GAO), the Merit Systems Protection Board (MSPB) and other entities. In 2001, GAO designated strategic management of human capital a government wide high risk area. However, since its inclusion on the high risk list, strategic human capital has shown improvement. In a 2003 report, GAO acknowledged that under OPM's leadership more progress had been made in the two years since 2001 than in the previous 20 years (GAO-03-637T). Subsequently, GAO commended OPM's white paper on pay and classification as "a good foundation for . . . results-oriented pay reform" (GAO-03-115 page 13). OPM is credited for its central role in the development of key personnel reforms, particularly on HR flexibilities for the Department of Homeland Security. Since 2000, OPM's OIG has conducted ongoing evaluations of OPM's compliance with GPRA requirements. Semi-annual reports since 2000 have begun demonstrating an "overall improvement" in OPM's strategic planning. MSPB is required by statute to periodically review OPM's activities. In December 2001, MSPB reported that OPM has made commendable progress in a number of areas, such as decentralizing the civil service and improving HR oversight.

Evidence: Human Capital: Building on the Current Momentum to Address High-Risk (GAO-03-637T). US Merit Systems Protection Board. The US Office of Personnel Management in Retrospective: Achievements and Challenges After Two Decades. Washington, DC: December 2001

NO 0%

Were programmatic goals (and benefits) achieved at the least incremental societal cost and did the program maximize net benefits?

Explanation: The HC Program provided no evidence that it regularly conduct analysis on the actual effects of all significant regulations. The program has plans to evaluate the new HR systems at DOD and DHS, for which the HC Program played a significant role in rule making, but no evaluation has been completed so far.

Evidence: No evidence of any systemic reviews for regulations was provided.

NO 0%
Section 4 - Program Results/Accountability Score 28%

Last updated: 09062008.2006SPR