OPM Performance and Accountability Report for FY 2000 -- Progressing Toward Our Strategic Goals

Progressing Toward Our Strategic Goals

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Key Accomplishments in FY 2000

During FY 2000, we pushed forward with our agenda to strategically align Federal human resources management with agencies’ missions and strategic goals. We ensured that agency human resource management systems operate within the principles of the merit system, delivered our services in a high quality and cost effective manner, and provided competent financial management of the employee benefit trust funds. The Management Discussion and Analysis in this report provides an overview of the Annual Performance Goals we met during FY 2000 and the status of the strategic outcomes we hope to achieve. That overview is supplemented by the detailed analysis of our performance with respect to all of our Annual Performance Goals and indicators in Appendix A. The following is a discussion of our most significant accomplishments and how they are important to achieving our strategic goals.

Our Annual Performance Plan for FY 2000 was developed around the five goals described in our first Strategic Plan, which was published in September 1997. Although we restated our goals in the updated Strategic Plan published in September 2000, we are reporting our accomplishments according to the original five, as follows:

Goal I--Provide policy direction and leadership to recruit and retain the Federal workforce required for the 21st Century.

Goal II--Protect and promote the merit-based Civil Service and the employee earned benefit programs through an effective oversight and evaluation program.

Goal III--Provide advice and assistance to help Federal agencies improve their human resources management programs to effectively operate within the economy, demographics and environment of the 21st Century.

Goal IV--Deliver high-quality, cost-effective human resources services to Federal agencies, employees, annuitants and the public.

Goal V--Establish OPM as a leader in creating and maintaining a sound, diverse, and cooperative work environment.

The outcome we seek under Strategic Goal I is that the Federal workforce enables agencies to meet their missions, while reflecting the diversity of the American people. We recognize that we do not and can not directly affect this outcome and that our role is to provide the Federal agencies with the leadership and tools they need to achieve this. In measuring progress toward this outcome, we assess whether we have provided the necessary leadership and delivered the needed tools, as well as whether the agencies are meeting their missions and the American people are being well served.

In FY 2000, we provided agencies with new tools and systems to strengthen their recruitment programs and enhanced the employee benefits package so that they can retain their most talented workers. We moved toward this outcome in many ways during the year, and our most significant accomplishments were as follows.

Workforce Planning. Workforce planning is a critical component of human capital management and planning as agencies confront the loss of talent and experience presented by the impending retirement of the baby boom generation. Agencies must implement succession planning programs to address the loss of skills needed in the modern workplace. Other observers have also highlighted this issue, including the General Accounting Office (see GAO’s publication High Risk Series, an Update, January 2001), the National Academy of Public Administration, the International Personnel Management Association, and others. We continued our actions to address these needs during FY 2000 by developing the Workforce Planning and Analysis System and making it available to agencies. We conducted the first annual Workforce Planning Conference and a workshop which introduced “A Guide to Strategically Planning Training and Measuring Results,” as part of our effort to lead agencies in aligning human resources with their strategic needs. Finally, we published The HR Workforce: Meeting the Challenge of Change in January 2000.

Recruitment and Retention. In separate efforts that complement the Workforce Planning and Analysis System, we strengthened the options that Federal agencies have to offer by debuting the Career Intern Program, publishing proposed regulations for the repayment of student loans (authorized by 5 U.S.C. 5379), and expanding the sick leave program. The Career Intern Program is based on a framework developed by an interagency Career Intern Task Force we convened during the year. The Career Intern Program will help agencies identify and recruit high quality and diverse candidates for mission critical occupations. With the authority to repay student loans for certain Federal employees and new hires, Federal agencies will have another tool to compete for highly qualified individuals and meet changing human resources and agency needs in the 21st century. Under our new expanded leave benefits policy, Federal employees may use up to 12 weeks of earned sick leave to provide care for a family member with a serious health condition. The new benefit is valuable in helping employees both at work and home and is another example of OPM’s efforts to make the Federal government a model employer and an employer of first choice. Work/life and wellness programs also hold promise for improving agency abilities to recruit and retain a skilled workforce. Like the private sector, these programs are considered part of the cost of doing business. We have provided agencies with information about the new child care and health initiatives. For employees, these programs are intended to improve their health status and help them better manage their work and personal responsibilities.

Long-Term Care Insurance. With the passage of the Long-Term Care Security Act on September 19, 2000, long-term care insurance became a reality for Federal workers, members of the military, retirees and their families. This program is the first new benefit offered to Federal employees since the inception of the Federal Employees Retirement System, with its Thrift Savings Plan component, in June 1986. We worked closely with staff from the Department of Health and Human Services and congressional staff to develop a benefit package that will reflect current and anticipated market conditions and give the Federal population the opportunity to purchase a quality product at a group discount rate. We have already begun the work to implement the Long-Term Care Insurance Program by October 2002. We have launched a Website for the Program, and are positioning the resources to develop implementing regulations, solicit and review contract proposals, and develop the educational materials for potential program enrollees.

These initiatives put in place tools, systems, and programs the agencies need to recruit and retain a high quality workforce. However, we must also examine whether these actions are effective in terms of our collaboration with the agencies in developing them and their usefulness. Also, we must determine whether these initiatives are achieving the outcomes we seek: that agencies are aligning human resources management with their missions, and that they are able to recruit and retain a Federal workforce that enables them to meet their missions.

To measure these outcomes, we began laying the foundation for the corporate measurement framework described in our new strategic plan and discussed later in this report. We used existing data collection tools to establish baseline performance levels for several of these measures. The HR Policy Leadership Results shown in the Management Discussion and Analysis section establish baselines against which we will gauge future progress. As shown in that table, the results were generally positive, except that only 45% of the HR Directors indicated that their agency’s workforce has the skills needed to meet the mission of their agencies.

This aligns with the belief held by many observers that the Federal government’s ability to recruit the kind of workforce it needs remains a great challenge. It also supports the General Accounting Office assessment that the Government’s approach to managing its people is “the critical missing link in reforming and modernizing the Federal government’s management practices.”

To ensure we are addressing this challenge, we established several new objectives in our September 2000 Strategic Plan. These objectives are:

By 2002, we will attempt to create a flexible, competitive and performance-oriented strategic rewards environment that allows the Government to recruit, manage, and retain a high quality and diverse Federal workforce.
By FY 2004, the Government’s executive resources systems will appropriately distinguish leadership and technical/professional attributes and help agencies develop, select, and manage an exceptional executive corps.
By FY 2005, Governmentwide selections will be based on assessment tools that are more comprehensive in assessing the full range of competencies needed to perform the jobs of the future.

The programs and tools we put into place during FY 2000, and the initiatives we have planned for the future will not affect the outcome measures immediately. However, we expect to see gradual improvement in the measures over a three to five year span. We have included a thorough discussion of our corporate measurement framework and the measures we will implement in the Performance Measurement section of this report.

Strategic Goal II envisions that we will maintain consistent adherence across agencies to the nine merit principles and be a model of financial management and integrity in our administration of the employee benefit trust funds. We moved closer to both of these outcomes as demonstrated by the following accomplishments.

Unqualified Audit Opinions. We continued to carry out our fiduciary responsibilities regarding our financial management of the Civil Service and Federal Employees Retirement programs, the Federal Employees Health Benefits Program, and the Federal Employees’ Group Life Insurance Program. The results we expect to achieve are that these programs will be in full compliance with all Federal financial management standards and protected from waste, fraud, and abuse. We made significant strides toward these outcomes during FY 2000, the most significant being the unqualified audit opinions received during FY 2000 on the FY 1999 financial statements for the trust fund programs and the unqualified opinions received for OPM’s consolidated statements for FY 2000.

In addition, our independent auditors identified no new material weaknesses in our financial systems during the audit of the FY 2000 financial statements. Finally, we made progress during FY 2000 toward the elimination of existing material weaknesses. Many of these material weaknesses are listed among our Management Challenges and resolving them represents an important step toward bringing the financial systems into full compliance with the Federal Financial Management Improvement Act.

Continued Vigilance Over the Merit System. In protecting the merit-based Civil Service, we ultimately seek the consistent honoring of and adherence to the nine merit principles in all Federal agencies. However, we are limited in the extent to which we can influence this outcome and measure our results. We believe that our best opportunity to influence this outcome lies in maintaining an active and effective oversight program and our FY 2000 performance goals reflect this concept.

The overall results of our merit system oversight activities, shown in the Management Discussion and Analysis, indicate a fairly positive employee perception about the practice of human resources management in accordance with the nine merit principles in 5 U.S.C. 2301(b).

To strengthen the effectiveness of our oversight program and improve employee perceptions regarding equity and merit in agency HRM programs, we established the following objectives in our revised Strategic Plan.

By FY 2005, all agencies will have implemented accountability systems that effectively hold responsible officials accountable for their human resources operations and results.
All agency units that conduct employment examinations under our delegated authority are fully trained, covered by effective internal examining accountability systems, and meet our criteria for recertification.
Decisions of Federal adjudicatory agencies and decisions of OPM in acting on appeals are consistent with civil service laws, regulations, and policies.

In pursuit of Strategic Goal III, we maintained and enhanced our long-standing tradition of providing topnotch advice and assistance to support Federal agencies as they sought to improve their human resources management systems and programs to meet changing mission and workforce needs and to anticipate further changes in the 21st century. Our various programs continued to expand the variety and forms of information and assistance that is available through the OPM Website, and to receive positive feedback from our various customers that this is one of the most effective ways we can provide information and assistance. We were also mindful of the benefits of more direct interaction and networking and continued our series of successful national conferences whereby we foster interagency communications, nurture a sense of community among specialists in particular HRM areas, and bring the best thinkers and doers from the public and private sectors together to share information and ideas. Such conferences included:

Solutions 2000, which focused on a wide vareity of recruitment, hiring, staffing, and workforce restructuring strategies, programs, and services;
Benefits Interchange 2000, where the benefits officers throughout the Government shared the latest approaches to linking personnel and payroll and assuring that customers get the best services and information available;
The Syposium on Employee and Labor Relations (SOLER) 2000, which continued to emphasize dispute resolution techniques as well as recent developments and emerging issues in the case law that so directly affects these programs in the agencies; and
The Strategic Compensation Conference 2000 which shared the latest flexibilities and developments in pay, leave, classification, performance management, and incentive awards, and continued to cultivate the growing community of specialists in the agencies who are responsible for administering an increasing set of compensation options.

Strategic Goal IV describes our intentions to deliver high quality services to our customers (agencies, employees, annuitants, and the public) in a way that is cost effective and meets their evolving needs. We will achieve this outcome by leveraging information technology that will deliver these services on demand, more accurately, more consistently, and at the lowest possible cost. In recent years, we developed the broad designs for these modern support systems. During FY 2000, we defined these designs in more specific terms.

Retirement Systems Modernization. The Retirement Systems Modernization is OPM’s central strategy to meet the long-term customer services and financial management objectives for the Civil Service and Federal Employees Retirement Systems. The need to modernize these systems was made more evident by the rising processing times we observed during FY 2000 on claims submitted by retiring Federal employees to collect their retirement annuity from OPM. Although financial hardship is avoided for these beneficiaries by our practice of paying an estimated interim annuity while we process their claims, the higher processing times indicate that the paper-bound business processes and older technology on which our current systems are based are inadequate for providing high quality and cost-effective benefits in the future

The Modernization project met the goals and objectives established for FY 2000. Having developed our vision for the modernized system, during FY 2000 we developed “blue prints” for the six core processes that will make this vision a reality. We completed four of the six core process blueprints -- member administration, claim to payment, annuity roll maintenance, and benefits counseling -- during the year. We also began a technology blueprint that describes the initial technology architecture for the modernized system. Together, the six core processes and the technology blueprints provide the design of the modernized retirement system. We also developed a performance measurement program this past year that will enable us to measure our progress as we modernize. We are now using these measures to support our corporate performance measures.

Retirement Systems Modernization will share technology with another large modernization effort, the Human Resources Data Network. We are developing plans for how these two large information technology projects will be coordinated, and how they will complement and supplement each other. These projects are part of an ever expanding array of technology implementations that include Employee Express, USAJOBS, and the OPM Website that enable us to deliver high quality and cost-effective human resource services to Federal agencies, employees, annuitants, and the public.

Y2K Roll Over. With respect to Strategic Goal V, as in most agencies, preparing for the Year 2000 (Y2K) roll over was one of the largest, most expensive and most complex technical and management tasks ever undertaken by OPM. This multi-year, agencywide effort to address the impact of the Y2K date change was highly successful due to extensive planning and coordination. We further ensured success by extensive end-to-end testing and compliance verification. As a result, all OPM systems operated properly on and after January 1, 2000.

Federal Human Resources Management--
The Challenges Ahead

In the debate over the future size of Government (particularly a smaller Government) some people make the assumption this translates into less need for attention to recruiting, managing, and retaining a cadre of good Government workers. However, the public still wants the services they have come to expect and demand from Government, which means we must continue to recruit, manage, and retain the people who deliver those services. We must continue to focus attention on strategic human resources management, across Government, and provide the policies, tools, and flexibilities that Federal agencies must have to do this well.

Strategically managing the 1.8 million members of the Federal workforce during the 21st century will have more impact on how well the Government performs than any other action taken by Federal leaders. From January 1993 to January 2000, the Federal government civilian workforce was reduced by 384,000 employees. Many of those who left were among the most experienced professionals in their agencies. Even as the workforce became smaller, new responsibilities and new ways of doing existing work combined to demand new skills. Additional skill losses will occur as the baby boom generation reaches retirement age over the next five years.

We must develop human resources management strategies that are up to the task of recruiting and retaining the high quality and diverse workforce the Government needs. More discretion will be an important element of these strategies, but we must also balance new flexibility with the fundamental fairness and equity issues that are embodied in the laws and principles that govern the Federal civil service, such as respect for the principles of merit-based personnel decisions, veterans’ preference and workforce diversity.

This is the framework for all that we are doing to lead strategic human resources management:

We will continue to redesign the basic Federal systems for recruitment, examining, pay, classification, training, and performance management to provide more flexibility.
We will continue to use automation to make these systems highly efficient and customer friendly.
We will increase awareness that initiatives such as strategically planning training, work/life and wellness policies, and cooperative relationships between labor and management will help agencies meet mission goals.
We have delegated broad authorities for hiring, training, rewards, and performance management to agencies, and will continue to encourage agencies to redelegate them to line managers, so they can introduce and use new approaches in ways that best meet their agency needs.
As we delegate authorities and increase flexibilities, we will continue our careful oversight to ensure that managers act within the fundamental values of our Federal public service.
We will continue to send a clear message that if we are to obtain the skills and talents we must have to be successful, we must tap into the rich diversity of American society, including minorities, women, and people with disabilities.
Where new authority is needed, we will continue to work with Congress to revise the laws that shape our civil service systems. We expect new ideas to emerge as we continue these discussions.

While these challenges are great, we are not alone in resolving them. We will work with senior leaders within the Administration, line managers, and human resources management staffs in individual agencies, and collaborate with other stakeholders, to develop and implement new ideas.

Top of Page

…we pushed forward with our agenda to strategically align Federal human resources management with agencies’ missions and strategic goals…

In FY 2000, we provided agencies with new tools and systems to strengthen their recruitment programs and enhanced the employee benefits package so that they can retain their most talented workers.

…the public still wants the services they have come to expect and demand from Government, which means we must continue to recruit, manage, and retain the people who deliver those services.