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FY 2001 Performance and Accountability Report Homepage A Message from the Director A Message from the Chief Financial Officer OPM at a Glance Highlights and Management Accomplishments

HIGHLIGHTS AND MANAGEMENT ACCOMPLISHMENTS

FY 2001 was a year of transition for the Office of Personnel Management. Sound stewardship of OPM during the first part of the fiscal year under Acting Director Steven R. Cohen helped to position the agency to take on important new responsibilities for the President's Management Agenda following confirmation of Director Kay Coles James in July 2001.

This report describes OPM's accomplishments under both leaders for FY 2001. These accomplishments reflect measurable progress in human capital leadership, merit systems oversight, direct service delivery, and sound financial management. The report also describes some of the significant changes in focus and structure introduced by Director James that will enable OPM to move into the future. These changes reflect an energized agency with innovative management, clearly focused on its strategic mission and on the President's agenda.

The most significant accomplishments and actions are described below. A full analysis of every goal outlined in OPM's FY 2001 Annual Performance Plan is found in the Annual Performance Goals and Results section of this report.

Strategic Management of Human Capital. As the human capital management advisor to the President, OPM has taken on the challenge of leading agencies to improve the strategic management of the Federal workforce. President Bush recognized the importance of strategic human capital management in his agenda for management reform, placing it first in a list of five key management improvement initiatives. (The others are Competitive Sourcing, Improved Financial Performance, Expanded Electronic Government, and Budget and Performance Integration.)

The human capital initiative focuses on ensuring that the right person is in the right job and prepared to provide top quality service to the American citizen. This unprecedented attention by the nation's Chief Executive provides a real opportunity to address strategically all of the elements necessary to support the workers who deliver products and services for the American people. These elements include such diverse aspects as how work and organizations are structured, how information technology is used to capture and build knowledge, how human capital strategies should be changed to allow more flexibility and accountability, and how performance can be managed and rewarded.

During FY 2001, OPM positioned the Federal government to address this opportunity in three important ways:

1. Workforce Planning and Restructuring. In the summer of FY 2001, the Office of Management and Budget (OMB) required all major Federal agencies to submit a workforce analysis and a restructuring plan to achieve the President's Management Agenda objectives. OPM assisted OMB in developing the original guidance for the workforce analysis, using its expertise in workforce planning and knowledge of available workforce data to help draft the requirements, and using its long-standing relationship with the human resources management community to ensure the guidance was clear and useful. Once the guidance was issued, OPM promoted effective workforce analysis actions through briefings delivered to all agencies and through a website devoted to workforce planning models, skills assessment tools, best practices, and questions and answers on steps to take. OPM also provided direct assistance to several agencies that requested specific help to conduct their statistical analyses, skills assessments, and restructuring plans. OPM was well-positioned to provide this advice because it had worked throughout FY 2000 with a joint committee of human resource directors to develop a Federal Workforce Planning Model which agencies could use if they did not have one of their own.



2. Direct Agency Assistance. As soon as Director James arrived at OPM, she began meeting with top leaders at each of the cabinet agencies to identify their more serious concerns about human resources management and OPM's role as an advisor. Armed with this information, she initiated several actions to better position OPM to provide the kind of assistance that agencies needed.

   Almost immediately, "Strike Force" teams were established as a way to focus expert OPM resources when an agency requested direct assistance on human capital issues. In FY 2001, OPM dispatched teams to the Departments of Energy, Housing and Urban Development, and Justice. These teams proved a key resource to other Federal agencies attempting to make significant change in the way they managed their human resources or delivered their human resource services.

   A second action by Director James led to one of OPM's key accomplishments for FY 2001. The Director requested a review of current laws and regulations to identify barriers to effective human resource management. From this review, OPM developed a set of legislative proposals for consideration by the Administration, and ultimately the Congress. These proposals were completed in FY 2001 and, in early FY 2002, were introduced in Congress as the Managerial Flexibilities Act. This Act was the first significant piece of human resource management legislation since the Civil Service Reform Act of 1978. It provides additional tools to agencies for recruitment, selection, and retention of a high-quality workforce.

3. Human Capital Measurement. As FY 2001 progressed, OPM recognized that measurement of progress towards the President's objectives for strategic human capital management would be essential, and took strong action to meet this need. OPM established a special committee of HR Directors, under the auspices of the Human Resources Management Council (HRMC), to identify appropriate measures to assess the actions taken to improve human capital management. The committee worked with a group of Fortune 500 private sector companies who had come together with the same objective and who welcomed the opportunity to assist the Federal government. As a result of this work, OPM identified five key dimensions of human capital that require critical monitoring and management: Strategic Alignment, Strategic Competencies, Leadership, Performance Culture, and Learning. A set of measures was proposed for each of these dimensions that could be used in all Federal agencies. OPM then took a further step and created a set of specific performance goals and measures, as well as operational guidance, that would assist agency heads to take action to meet the President's human capital management agenda. Although this "OPM Human Capital Scorecard" was not completed until early FY 2002, significant progress was made on this instrument, which will establish objective baselines for showing progress over time and provide comparisons against governmentwide averages and private sector benchmarks. This is another example of positioning OPM for its leadership responsibilities in FY 2002 and beyond.

   OPM also completed much of the work on a second measurement tool that will assist agencies in reaching the objectives of the President's Human Capital initiative. In January 2001, the new President issued an Executive Order on Accountability Systems, which required that agencies establish an internal system of control and self-assessment to gauge the overall viability of their human resources management program in all its facets, from human capital strategies to operational efficiency and integrity. This increases accountability for actions, and also builds a foundation for a strong system of measurement. OPM began working on a set of accountability system standards shortly after the executive order was issued, working through an interagency task force. Although these standards were not issued until FY 2002, the groundwork laid in FY 2001 again positioned OPM to provide the kind of specific guidance tools that agencies will need to achieve the President's agenda. The Standards cover the areas of strategic alignment, HR program effectiveness, HR operational efficiency, and legal compliance. The underlying notion is for agencies to track and evaluate the use of human capital as systematically and rigorously as they do their financial assets.

Through these actions to focus on human capital leadership and to enhance assistance to agencies, OPM is confident that the government will achieve the President's goal of strategic human capital management, and the accompanying improvement in services to the public.

Expanding Electronic Government. OPM emerged from FY 2001 as a leader in the President's initiative to expand e-Government. Under this initiative, OMB identified 24 major e-Government projects, and tapped OPM to lead five of these, more than any other Federal agency. This growth in responsibility was largely in recognition of the results OPM achieved in two information technology projects that were already underway. These two initiatives, which OPM is pursuing in partnership with other agencies, will greatly improve human capital management in the Federal government, and will form the core for the broader e-Government initiatives planned for FY 2002.

1. HR-DN. The Human Resources Data Network project (HR-DN) will streamline and automate the exchange of employees' HR information and improve workforce reporting across government. The HR-DN will fundamentally change paper-intensive personnel processes used across government to electronic means. In addition, the HR-DN will standardize human resource data, eliminate the need for paper employee records, and enable the electronic transfer of HR data throughout the Federal sector. This multi-year project began in FY 1999, and will be completed no later than FY 2005. During FY 2001, OPM completed eight major deliverables, on schedule, within budget, and of acceptable quality. The deliverables reflect significant progress on the design, development, and identification of the data the HR-DN will receive, exchange, and store.



2. Retirement Systems Modernization. The Retirement Systems Modernization Project proceeded on schedule, meeting all of the critical milestones established for FY 2001. Modernization is OPM's central strategy to meet long term customer service, business, and financial management goals for the Retirement Program. It is based on several key changes in business processes, the most important of which is the shift from the current paper-based processes to a totally electronic environment. This shift will enable OPM to develop web-based tools that will use the electronic data and allow current and former employees to use electronic self-service technology that has already been implemented for retirees. The design efforts have been virtually completed, and phased implementation of the modernized system will begin in FY 2002. Implementation will continue into FY 2008.

The five initiatives that OPM will lead in FY 2002 and beyond include projects related to consolidated and modernized human resource systems (building on the HR-DN project); consolidated and modernized Federal payroll systems; simplified one-stop recruitment; technology-based training; and speedier background clearances. Each of these initiatives will leverage Internet-based technologies to advance strategic business investment across government and promote organizational agility, cost efficiencies, and improvements in performance. For example, the Recruitment One-Stop initiative will improve the Federal hiring process by expanding the USAJOBS governmentwide automated employment information system to provide job seekers with streamlined resume submission, on-line feedback about their status in the employment process, and integration with automated assessment tools. Ultimately, Recruitment One-Stop will give agencies broader and faster access to resumes and the automated tools needed to select candidates.

Transition Assistance. The transfer of power from an outgoing Administration to an incoming Administration is critical to the continuing services and functions of the Federal government. A key responsibility for OPM is to assist a new Administration's Transition Team. OPM followed up the FY 2000 publication of "Transition to a New Presidential Administration: Employment Guidance for Agencies" with the "Guide to the Senior Executive Service" to educate new appointees on the features of the top executive positions in the Federal government. In addition, OPM drafted the "Presidential Transition Directory" and worked with the Office of Presidential Personnel and the Council for Excellence in Government to host President Bush's October 15, 2001, address to the SES and other members of his leadership team. OPM monitored transition actions across government and found no evidence of violation of merit principles and applicable laws and regulations in the transition actions that were reviewed or processed by OPM.

Agency SES program managers — many of whom had never been involved in the transition process — indicated that OPM guidance was invaluable to them as they worked with their new appointees. One executive remarked, " ...you certainly have made the transition process a lot smoother for those of us at the agencies — both the exit and certainly the new appointment process."

Long Term Care Insurance. With the signing 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.

At the conclusion of FY 2001, OPM was on track to have the Federal Long Term Care Insurance Program available to accept enrollments by October 2002. Between December 2000 and May 2001, OPM worked with insurer, community, consumer, agencies, and stakeholder groups to develop a "proposed product design" for the Federal Long Term Care Insurance Program, which was posted on the OPM web site on April 9, 2001. OPM published the contract solicitation on June 20, 2001, which enabled awarding of the contract in early FY 2002.

Response to September 11, 2001 Crisis. Like all Federal agencies, and the entire nation, the Office of Personnel Management was shaken by the events of September 11, 2001. OPM played a direct role in the Federal government's response to the terrorist attack on the United States. OPM's extensive communication network with agencies was used to determine, within hours, the numbers of employees directly affected through either personal loss or damage to their workplace. Within days, Director James was working with the President's staff (and later the Office of Homeland Security), the D. C. Mayor's office and the Metropolitan Washington Council of Governments to develop better plans for handling future security emergencies in the Washington, D. C. area and emergencies affecting Federal workers nationwide. Also within days, OPM took actions to enable agencies to staff positions critical to the War on Terrorism, such as implementing emergency hiring flexibilities, establishing a Patriot Readiness Center where retired Federal employees could register to re-enter the workforce in critical positions, and completing background.

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