[Federal Register Volume 73, Number 82 (Monday, April 28, 2008)]
[Rules and Regulations]
[Pages 23012-23049]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-8661]



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Part II





Office of Personnel Management





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5 CFR Part 250



Human Resources Management in Agencies; Final Rule

  Federal Register / Vol. 73, No. 82 / Monday, April 28, 2008 / Rules 
and Regulations  

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OFFICE OF PERSONNEL MANAGEMENT

5 CFR PART 250

RIN 3206-AJ92


Human Resources Management in Agencies

AGENCY: Office of Personnel Management.

ACTION: Final Rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations to implement certain provisions of the Chief Human Capital 
Officers Act of 2002, which set forth new OPM and agency 
responsibilities and requirements to enhance and improve the strategic 
management of the Federal Government's civilian workforce, as well as 
the planning and evaluation of agency efforts in that regard. Further, 
we are including a plain language rewrite of the subpart titled 
``Authority for Personnel Actions in Agencies.''

DATES: Effective Date: The regulations are effective on May 28, 2008.

FOR FURTHER INFORMATION CONTACT: Charles D. Grimes by phone at 202-418-
3163, by FAX at 202-606-2838, or by e-mail at pay-performance-policy. 
You may contact Mr. Grimes by TTY on 202-418-3134.

SUPPLEMENTARY INFORMATION: On May, 23, 2006, the Office of Personnel 
Management (OPM) issued proposed regulations (71 FR 29593) to change 5 
CFR part 250, to read ``Human Resources Management in Agencies'' to 
reflect current usage, to make a plain language revision in subpart A, 
and to add regulations on strategic human resources management as new 
subpart B.

Case for Action

    Section 1304 of the Chief Human Capital Officers Act (CHCO Act), 
which was enacted within the framework of the Homeland Security Act 
(Pub. L. 107-296), and codified at 5 U.S.C. 1103(c), authorizes OPM to 
develop an assessment system, including metrics, for agency human 
capital management. Rather than establish a new reporting requirement, 
OPM elected to incorporate the CHCO Act requirements within the newly 
established Human Capital Accountability System and Human Capital 
Management Report (Accountability System).
    To accommodate the accountability assessment, OPM has modified the 
existing 5 CFR part 250. Subpart A, which establishes requirements for 
delegations of personnel authority to agencies, has been rewritten in 
plain English. Agencies will continue to operate in an environment of 
delegated personnel authority and will be required to ensure merit 
system accountability.
    The new subpart B details both agency and OPM responsibilities 
under the CHCO Act as well as the fundamental requirements of the 
Accountability System.
    OPM is cognizant of the burden placed on agencies by reporting 
requirements, and the regulations mitigate against increasing that 
burden through the incorporation of existing reporting requirements 
(e.g., PMA scoring) into the annual report to the maximum extent 
practicable. The CHCO Act metrics and the Accountability System will 
provide OPM with the data necessary to meet statutory requirements of 5 
U.S.C. 1103(a) and (c) and 5 U.S.C. 2301.

Major Issues

    As a general matter, multiple commenters suggested OPM collaborate 
directly with each affected agency or with a team of agency 
representatives to develop metrics tailored to each agency's 
requirements. We disagree. The CHCO Act gives OPM responsibility for 
assessing strategic management of human capital across Government. The 
Governmentwide focus requires standard metrics. OPM consults with 
agencies on a regular basis through a variety of mechanisms including 
the CHCO Council, the Human Resources Directors' Forum, and OPM's Human 
Capital Officers. HCAAF requirements are designed to enable OPM to 
fulfill this responsibility through a set of human capital management 
systems, standards and metrics.
    There also was general concern expressed by commenters that the 
CHCO Act regulations add significantly to agency OPM reporting 
requirements. However, the intent of the CHCO regulations is to 
coordinate human capital management reporting requirements in a single 
reporting system.
    A commenter noted that the Chief Human Capital Officer should 
approve workforce plans. A commenter also contended that it was the 
agency's responsibility to determine the timing and format of the human 
capital plan. We agree, but note that OPM has the responsibility to 
assess and approve agency human capital accountability systems. OPM's 
role is to assure that agencies engage in workforce planning that meets 
approved standards.
    Commenters also raised concerns about the interplay between the 
CHCO Act reporting requirements and the Annual Employee Survey 
regulations. While data from the Annual Employee Survey could be used 
for HCAAF metrics, there is no substantive overlap in these two 
regulations.

HCAAF

    The Human Capital Assessment and Accountability Framework (HCAAF), 
annexed hereto as an Appendix to the regulation, details the concepts 
and systems for planning, implementing, and evaluating the results of 
human capital management policies and practices. Commenters contended 
that the framework is too transactional, broad and theoretical. 
Commenters further contended that agencies cannot be held accountable 
for ambiguous human capital management practices. We disagree. HCAAF 
tools are not designed to ensure strict compliance, but to assist 
agencies to meet HCAAF requirements. Measuring effective and efficient 
HCM is best accomplished through representative, flexible indicators, 
which OPM has established in the HCAAF metrics.
    Commenters also objected to sections of 5 CFR 250.203(a)(1)(ii) on 
workforce analysis. While we agree that other measurement methods could 
be effective, OPM has chosen the current Human Capital and Workforce 
Analysis Plan elements based on well-documented workforce plan models 
used in the public and private sectors.
    A commenter proposed that performance measures should support 
agency goals instead of agency measures. We agree. The wording in 5 CFR 
250.203(a)(1) (iii) has been changed accordingly.

Metrics

    By this regulation, OPM defines the metrics to be used pursuant to 
5 U.S.C. 1103(c) as the HCAAF and the HCAAF Systems, Standards, and 
Metrics (HCAAF-SSM). See 5 CFR 250.202(b). See the Appendix to this 
regulation. These metrics may be adapted, in the future, pursuant to 
notice and comment, to meet the future needs of both agencies and OPM. 
Commenters are providing feedback on the metrics to OPM through the 
public comment process and in other forums like the CHCO Council. OPM 
may incorporate this feedback, as appropriate, and pursuant to notice 
and comment, to further refine the measures in the future.
    Commenters generally contended that the metrics were inflexible, 
overly detailed and potentially inaccurate. We disagree. The HCAAF-SSM 
is a systematic method to examine strategic human capital practices 
across all

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Government agencies. Standardization is important because OPM cannot 
roll up metrics that are based on different calculations. Moreover, 
OPM, through the Accountability System, encourages all agencies to 
develop separate measures that address relevant agency issues. The 
HCAAF-SSM enables OPM to meet its statutory responsibility in the CHCO 
Act. That responsibility is to assess the strategic management of human 
capital across all of Government. OPM has determined that this can be 
accomplished only through using a common set of metrics.

Accountability

    Commenters expressed confusion surrounding the reporting 
requirements under the Human Capital Accountability System and annual 
Report. Commenters were concerned by the interplay of new and existing 
reporting requirements and whether there would be redundancy. However, 
the intent of the annual Human Capital Management Report is to provide 
a mechanism to consolidate human capital reporting into one annual 
report, and to incorporate this into agency performance and budget 
reporting. Commenters also contended that the reporting requirements 
are of no value to the agencies. We disagree. The Human Capital 
Management Report serves a number of purposes, including providing 
agencies a mechanism to document human capital results and actions 
planned to address areas needing improvement. Agencies will benefit 
from having effective, comparable human capital data.
    A commenter also proposed that the report be issued biennially to 
give agencies more time. We disagree. The annual report is appropriate 
as it provides timely feedback on agency human capital management 
systems. Moreover, the first complete accountability reporting with all 
required metrics is not required until 2008 to give agencies sufficient 
time to comply.
    A commenter proposed that the agencies' Chief Human Capital 
Officers have the authority to approve the agency accountability 
systems. We disagree. OPM has the authority to require agencies to 
establish accountability systems consistent with OPM standards. We made 
a clarifying change to 5 CFR 250.203(a)(1)(iii)(2) to ensure that any 
independent audit process is conducted with OPM participation.
    A commenter also suggested implementing a third-party appeals 
system prior to OPM withdrawing an agency's delegated examining unit or 
otherwise penalizing the agency. We disagree. OPM has longstanding 
authority under 5 U.S.C. 1104 to exercise oversight and control over 
agencies' use of delegated authorities without the intervention of a 
third party.
    Commenters proposed that OPM's role be more as advisor than 
auditor. While we will continue to provide guidance, advice and 
leadership to agencies, OPM has a statutory role as auditor of agency 
human capital management that must be fulfilled. Some commenters 
expressed confusion over whether a third party auditor would be 
required, but the proposed regulations have no such requirement. A 
commenter also suggested OPM change the language in 5 CFR 250.103 
regarding OPM discretion to require agency corrective action from may 
to must. We disagree. OPM retains discretion to determine the 
appropriate response to particular cases.
    A commenter contended that it was unnecessary to review each HC 
policy, program and operation every year. However, the regulations do 
not require such a review. Another commenter proposed that the annual 
Human Capital Management Report measure the number of employee 
complaints and resolution of such complaints. While we encourage 
agencies to include such measures in their accountability plans, and 
many agencies do track complaints, this is not a required metric.
    Commenters raised concerns about the sufficiency of pre-determined 
budgets when implementing the newly required Human Capital Management 
Report. Commenters contended that the timeline provided in the proposed 
regulation did not allow time to align the Accountability System and 
the budget development process. Concern was also raised about the 
availability of funding for accountability systems when agency human 
resources management does not control the budget. We disagree. The CHCO 
Act holds agencies responsible for maintaining accountability for 
results including merit system compliance. At the agency level, 
leadership is required to align budgets with strategic management of 
human capital. The first complete Human Capital Management Report with 
all required metrics is not required until 2008 to give agencies 
sufficient time to comply.
    Commenters also requested that OPM differentiate the requirements 
for agencies that have already implemented conforming accountability 
systems from the requirements for agencies that have not implemented 
such systems. We disagree. The regulations detailing the Accountability 
System have been drafted to provide individual agencies maximum 
flexibility while providing OPM comparable information across agencies.
    A commenter requested that OPM require agencies to post their Human 
Capital Management Reports on their Web sites. We disagree. While OPM 
believes that agencies should post their Human Capital Management 
Reports, an agency may have a number of valid reasons (e.g., national 
security) for not posting its report.

Executive Order 12866, Regulatory Review

    This proposed rule has been reviewed by the Office of Management 
and Budget in accordance with Executive Order 12866.

Regulatory Flexibility Act

    I certify that these regulations would not have a significant 
economic impact on a substantial number of small entities (including 
small businesses, small organizational units, and small governmental 
jurisdictions) because they would only apply to Federal agencies and 
employees.

List of Subjects in 5 CFR Part 250

    Authority delegations (Government agencies), Government employees.

Office of Personnel Management.
Linda M. Springer,
Director.

0
Accordingly, OPM is amending 5 CFR 250 to read as follows:
0
1. Revise part 250 to read as follows:

PART 250--HUMAN RESOURCES MANAGEMENT IN AGENCIES

Subpart A--Authority for Personnel Actions in Agencies
Sec.
250.101 Standards and requirements for agency personnel actions.
250.102 Delegated authorities.
250.103 Consequences of improper agency actions.
Subpart B--Strategic Human Capital Management
250.201 Coverage and purpose.
250.202 Office of Personnel Management responsibilities.
250.203 Agency responsibilities.

    Authority: 5 U.S.C. 1101 note, 1103(a)(5), 1103(c), 1104, 1302, 
3301, 3302; E.O. 10577, 12 FR 1259, 3 CFR, 1954-1958 Comp., p. 218; 
E.O. 13197, 66 FR 7853, 3 CFR 748 (2002).

    Subpart B also issued under 5 U.S.C. 1401, 1401 note, 1402.

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Subpart A--Authority for Personnel Actions in Agencies


Sec.  250.101  Standards and requirements for agency personnel actions.

    When taking a personnel action authorized by this chapter, an 
agency must comply with qualification standards and regulations issued 
by the Office of Personnel Management (OPM), the instructions OPM has 
published in the Guide to Processing Personnel Actions, and the 
provisions of any delegation agreement OPM has made with the agency. 
When taking a personnel action that results from a decision or order of 
OPM, the Merit Systems Protection Board, Equal Employment Opportunity 
Commission, or Federal Labor Relations Authority, as authorized by the 
rules and regulations of those agencies, or as the result of a court 
order, a judicial or administrative settlement agreement, or an 
arbitral award under a negotiated agreement, the agency must follow the 
instructions in the Guide to Processing Personnel Actions and comply 
with all other relevant substantive and documentary requirements, 
including those applicable to retirement, life insurance, health 
benefits, and other benefits provided under this chapter.


Sec.  250.102  Delegated authorities.

    OPM may delegate its authority, including authority for competitive 
examinations, to agencies, under 5 U.S.C. 1104(a)(2), through a 
delegation agreement. The delegation agreement developed with the 
agency must specify the conditions for applying the delegated 
authorities. The agreement must also set minimum standards of 
performance and describe the system of oversight by which the agency 
and OPM will monitor the use of each delegated authority.


Sec.  250.103  Consequences of improper agency actions.

    If OPM finds that an agency has taken an action contrary to a law, 
rule, regulation, or standard that OPM administers, OPM may require the 
agency to take corrective action. OPM may suspend or revoke a 
delegation agreement established under Sec.  250.102 at any time if it 
determines that the agency is not adhering to the provisions of the 
agreement. OPM may suspend or withdraw any authority granted under this 
chapter to an agency, including any authority granted by delegation 
agreement, when OPM finds that the agency has not complied with 
qualification standards OPM has issued, instructions OPM has published, 
or the regulations in this chapter. OPM also may suspend or withdraw 
these authorities when it determines that doing so is in the interest 
of the civil service for any other reason.

Subpart B--Strategic Human Capital Management


Sec.  250.201  Coverage and purpose.

    The Chief Human Capital Officers (CHCO) Act of 2002 acknowledges 
the critical importance of Federal employees to the effective and 
efficient operation of Government. As a part of OPM's overall 
leadership responsibilities in the strategic management of the Federal 
civil service, and pursuant to 5 U.S.C. 1103, OPM is responsible for 
designing a set of systems, including standards and metrics, for 
assessing the management of human capital by Federal agencies. In this 
subpart, OPM establishes a framework of those systems, including system 
components, OPM's role, and agency responsibilities.


Sec.  250.202  Office of Personnel Management responsibilities.

    (a) As the President's chief human capital officer, the Director of 
OPM provides Governmentwide leadership and direction in the strategic 
management of the Federal workforce.
    (b) To execute this critical leadership responsibility, OPM adopts 
the Human Capital Assessment and Accountability Framework (HCAAF) to 
describe the concepts and systems for planning, implementing, and 
evaluating the results of human capital management policies and 
practices. See Appendix. In addition, OPM adopts the related set of 
assessment systems required by the CHCO Act as the HCAAF Systems, 
Standards, and Metrics (HCAAF-SSM), also included in the Appendix. Each 
such assessment system associated with the HCAAF consists of:
    (1) A standard against which agencies can assess the results of 
their management of human capital; and
    (2) Prescribed metrics, as appropriate, for organizational 
outcomes, employee perspective, and compliance measures with respect to 
relevant laws, rules and regulations.
    (c) Together, the HCAAF and the HCAAF-SSM guide agencies in 
planning, evaluating and improving the efficiency and effectiveness of 
agency human capital management with respect to:
    (1) Alignment with executive branch policies and priorities, as 
well as with individual agency missions, goals, and program objectives, 
including the extent to which human capital management strategies are 
integrated into agency strategic plans and performance budgets prepared 
under OMB Circular A-11;
    (2) Identifying and closing competency/skill gaps in the agency's 
mission-critical occupations; ensuring leadership continuity through 
the implementation of recruiting, development, and succession plans; 
sustaining an agency culture that values, elicits, identifies, and 
rewards high performance; and developing and implementing a knowledge 
management strategy, supported by appropriate investment in training 
and technology; and
    (3) Holding the agency head, executives, managers and human 
resources officers accountable for efficient and effective human 
capital management, in accordance with merit system principles.


Sec.  250.203  Agency responsibilities.

    (a) To assist in the assessment of the management of human capital 
in the Federal Government, and to help meet the statutory requirements 
to prepare that portion of the performance budget for which agency 
Chief Human Capital Officers are accountable as well as relevant 
portions of performance and accountability reports, heads of agencies 
or their designees must maintain a current human capital plan and 
provide OPM an annual Human Capital Management Report, as outlined 
below, based on an approved human capital accountability system. The 
HCAAF and the HCAAF-SSM provide more specific information on coverage 
and content for the plan and report.
    (1) Human Capital Plan. Using a format established by agreement 
between the agency and OPM, at a minimum the plan must include:
    (i) Human Capital Goals and Objectives. These are a comprehensive, 
integrated set of human capital goals and objectives, with detailed 
policy and program priorities and initiatives as appropriate, 
consistent with agency strategic plans and annual performance goals. 
These human capital goals and objectives must address each of the human 
capital management systems included in the HCAAF.
    (ii) Workforce Analysis. This analysis of the agency's workforce 
describes its current state, projects the human resources needed to 
achieve the agency's program performance goals and objectives during 
the term of the agency's strategic plan, and identifies potential 
shortfalls or gaps. An ongoing analysis must, for relevant agency 
mission requirements, describe the occupation(s) most critical to 
agency performance (including associated managerial and executive 
positions) and

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describe mission-critical competencies and key demographics (e.g., 
talent analyses, turnover, and retirement eligibility); and for each 
such occupation, describe its current and projected staffing levels, 
attrition and hiring estimates, and proposed training and development 
investments.
    (iii) Performance Measures and Milestones. One or more human 
capital metrics, as well as appropriate program milestones, for each 
human capital goal or objective, provide a basis for assessing progress 
and results, including compliance measures with respect to relevant 
laws, rules and regulations. These metrics must include, but are not 
limited to, those described in the HCAAF-SSM issued under Sec.  
250.202(b). These metrics and milestones must be specifically linked to 
broader agency program performance goals, to evaluate the impact of the 
agency's human capital management on its overall mission performance.
    (2) Human Capital Accountability System. This system provides for 
an annual assessment of agency human capital management progress and 
results including compliance with relevant laws, rules, and 
regulations. That assessment is conveyed in an annual Human Capital 
Management Report to OPM. The human capital accountability system must:
    (i) Be formal and documented;
    (ii) Be approved by OPM;
    (iii) Be supported and resourced by agency leadership;
    (iv) Measure and assess human capital management systems for 
mission alignment, effectiveness, efficiency, and compliance with merit 
system principles, laws, and regulations;
    (v) Provide for an independent audit process, with OPM 
participation, for periodic review of human resources transactions to 
insure legal and regulatory compliance;
    (vi) Ensure that action is taken to improve human capital 
management programs and processes and to correct deficiencies; and
    (vii) Ensure results are analyzed and reported to agency management 
and OPM.
    (3) Human Capital Management Report. At a minimum, the agency's 
annual Human Capital Management Report must:
    (i) Provide an evaluation of and report on the agency's existing 
human capital management policies, programs, and operations, as they 
relate to the agency's overall mission/program performance. The report 
must address the performance measures and milestones contained in the 
agency human capital plan including compliance measures with respect to 
relevant laws, rules and regulations. The report must also document 
actions taken to correct any violations or deficiencies that are 
identified.
    (ii) Inform the development of human capital goals and objectives 
during the agency's strategic planning and annual performance budget 
formulation process, as well as the treatment of human capital results 
during the annual performance and accountability reporting process.
    (b) [Reserved]

    Note: The following appendix will not appear in the Code of 
Federal Regulations.


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SECTION I--Introduction to the HCAAF                  Human Capital Assessment and Accountability Framework
                                                       (HCAAF)
                                                     -----------------------------------------------------------
                                                      Metrics
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Human Capital Assessment and Accountability           The HCAAF establishes and defines five human capital
 Framework (HCAAF).                                    systems that together provide a single, consistent
                                                       definition of human capital management for the Federal
                                                       Government. The HCAAF fuses human capital management to
                                                       the merit system principles--a cornerstone of the
                                                       American Civil Service--and other civil service laws,
                                                       rules, and regulations. Establishment of the HCAAF
                                                       fulfills OPM's mandate under the Chief Human Capital
                                                       Officers Act of 2002 (CHCO Act) to design systems and set
                                                       standards, including appropriate metrics, for assessing
                                                       the management of human capital by Federal agencies.
                                                      The regulation at 5 CFR 205.203 establishes requirements
                                                       for an agency to submit to OPM annually a Strategic Human
                                                       Capital Plan and an Agency Human Capital Accountability
                                                       Report. The requirements in the regulation are by design
                                                       congruent with the planning and reporting requirements
                                                       contained in OMB Circular A-11 and title 31 U.S.C.
Five Systems of HCAAF                                 The HCAAF outlines an ongoing process of human capital
                                                       management in every Federal agency--planning and goal
                                                       setting, implementation, and evaluating results--in five
                                                       systems:
                                                       Strategic Alignment (Planning and Goal Setting).
                                                       A system led by senior management--typically the Chief
                                                       Human Capital Officer (CHCO)--that promotes the alignment
                                                       of human capital management strategies with agency
                                                       mission, goals, and objectives through analysis,
                                                       planning, investment, measurement, and management of
                                                       human capital programs.
                                                       Leadership and Knowledge Management
                                                       (Implementation). A system that ensures continuity of
                                                       leadership by identifying and addressing potential gaps
                                                       in effective leadership and implements and maintains
                                                       programs that capture organizational knowledge and
                                                       promote learning.
                                                       Results-Oriented Performance Culture
                                                       (Implementation). A system that promotes a diverse, high-
                                                       performing workforce by implementing and maintaining
                                                       effective performance management systems and awards
                                                       programs.
                                                       Talent Management (Implementation). A system that
                                                       addresses competency gaps, particularly in mission-
                                                       critical occupations, by implementing and maintaining
                                                       programs to attract, acquire, promote, and retain quality
                                                       talent.
                                                       Accountability (Evaluating Results). A system
                                                       that contributes to agency performance by monitoring and
                                                       evaluating the results of its human capital management
                                                       policies, programs, and activities; by analyzing
                                                       compliance with merit system principles; and by
                                                       identifying and monitoring necessary improvements.
                                                      Each system consists of components that allow human
                                                       capital practitioners to assess how well the system is
                                                       strategically managing its human cpaital in compliance
                                                       with merit system principles.
Relationships Among the HCAAF Systems...............  Figure 1 below shows the relationships among the human
                                                       capital systems.


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[GRAPHIC] [TIFF OMITTED] TR28AP08.000


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                                                      Implementation of the HCAAF will enable agencies to
                                                       transform the Federal workplace into high-performing
                                                       arenas where every employee is enabled to understand and
                                                       maximize his or her contribution to agency mission.
                                                       Through implementation of the HCAAF, Federal agencies
                                                       will be able to focus on:
                                                       Human capital management systems and practices
                                                       that most impact attainment of their mission.
                                                       Measurable, observable agency and individual
                                                       performance results.
                                                      This will help to assure the American people's continuing
                                                       trust in their Government's ability to serve them and
                                                       protect our national security.
HCAAF Taxonomy......................................  The following components reflect the overall taxonomy of
                                                       the HCAAF.
    Standard........................................  A standard describes the critical human capital management
                                                       outcomes for agencies to strive toward in each of the
                                                       five HCAAF systems.
    Metrics.........................................  These are measurements that provide a basis for
                                                       comparison. Strategic human capital management requires a
                                                       reliable and valid set of metrics that provides an
                                                       accurate baseline against which individual agency
                                                       progress can be assessed. Required outcome metrics are
                                                       provided for the three systems that implement strategic
                                                       human capital plans and programs: Leadership and
                                                       Knowledge Management, Results-Oriented Performance
                                                       Culture, and Talent Management. These required metrics
                                                       are summarized on the following pages. Additional
                                                       suggested metrics are also included.
    Critical Success Factors........................  Each system is based on critical success factors that make
                                                       up the overall system. Critical success factors are the
                                                       areas on which agencies and human capital practitioners
                                                       should focus to achieve a system's standard and operate
                                                       efficiently, effectively, and in compliance with merit
                                                       system principles. For example, Change Management and
                                                       Diversity Management are two critical success factors
                                                       associated with the Leadership and Knowledge Management
                                                       system.
    Results.........................................  The results describe the desired effects when key elements
                                                       of a critical success factor are effectively implemented.
                                                       Results are presented in two categories: Effectiveness
                                                       results and compliance results. Compliance results refer
                                                       to specific statutory or regulatory requirements.
    Key Elements....................................  Each critical success factor contains several key elements
                                                       that are similar to the Elements of Yes that were
                                                       initially developed as part of the HCAAF. Key elements
                                                       describe what you would expect to see in an effective
                                                       critical success factor.
    Suggested Performance Indicators................  The suggested indicators--both effectiveness indicators
                                                       and compliance indicators--describe examples of visible
                                                       evidence of the existence of key elements and compliance
                                                       with merit system principles. Cumulatively, the
                                                       indicators identify how well the agency is doing relative
                                                       to key elements. The suggested performance indicators are
                                                       linked to the key elements and are not meant to be an all-
                                                       inclusive list. Human capital practitioners may need to
                                                       search for other indicators if agency approaches differ
                                                       from the list of suggested performance indicators
                                                       provided. Agencies may decide which suggested performance
                                                       indicators provide the best evidence that they have
                                                       implemented practices that lead toward achieving the
                                                       standard.
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[[Page 23017]]


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SECTION I--Introduction to the HCAAF                  Human Capital Assessment and Accountability Framework
                                                       (HCAAF)
                                                     -----------------------------------------------------------
                                                      Metrics
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Metrics.............................................  Metrics have been established to help agencies accomplish
                                                       the standard for the three systems that implement
                                                       strategic human capital plans and programs--i.e.,
                                                       Leadership and Knowledge Management, Results-Oriented
                                                       Performance Culture, and Talent Management. These three
                                                       systems have both required and suggested metrics.
                                                       Required metrics focus on human capital
                                                       management outcomes and are required for Governmentwide
                                                       reporting. They focus on human capital management
                                                       outcomes from three perspectives: organization, employee,
                                                       and merit system compliance.
                                                       Suggested metrics focus on human capital
                                                       management activities that support outcome metrics and
                                                       show the health of a specific HCAAF critical success
                                                       factor.
                                                      The metrics were developed based on extensive research
                                                       from a variety of expert sources. To be incorporated in
                                                       the HCAAF, a metric needed to meet the following
                                                       criteria:
                                                       Align with the HCAAF.
                                                       Drive organizational effectiveness directly or
                                                       indirectly.
                                                       Be applicable Governmentwide.
                                                       Be actionable (under the control of the agency).
                                                       Be practical (cost effective and acceptable).
                                                       Be reliable (stable).
                                                       Be valid (accurate and appropriate for its
                                                       purpose).
                                                      The metrics described in this Guide were carefully chosen
                                                       to maintain their usefulness over time. However, many
                                                       additional human capital metrics exist that agencies may
                                                       find they want to implement. Agencies are encouraged to
                                                       augment these Governmentwide metrics with other activity
                                                       and outcome metrics that are relevant to the agencies'
                                                       human capital objectives.
                                                      The following pages provide the system standard and the
                                                       required outcome metrics for the Leadership and Knowledge
                                                       Management, Results-Oriented Performance Culture, and
                                                       Talent Management systems. Refer to each specific
                                                       system's section for the suggested metrics.
Leadership and Knowledge Management System Standard.  Agency leaders and managers effectively manage people,
                                                       ensure continuity of leadership, and sustain a learning
                                                       environment that drives continuous improvement in
                                                       performance, and provide a means to share critical
                                                       knowledge across the organization. Knowledge management
                                                       must be supported by an appropriate investment in
                                                       training and technology.
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
   Required Outcome Metric         Description             Purpose
------------------------------------------------------------------------
Organization Metric:          Difference between    To determine how the
 Competency Gaps Closed for    competencies needed   agency should
 Management and Leadership.    and competencies      target its
                               possessed by          recruitment and
                               managers and          retention, and
                               leaders.              development efforts
                                                     to bring the
                                                     competencies of its
                                                     managers and
                                                     leaders into
                                                     alignment with the
                                                     agency's current
                                                     and future needs.
Employee Perspective Metric:  Items from Annual     To determine the
 Questions from Annual         Employee Survey.      extent to which
 Employee Survey about                               employees hold
 Satisfaction with                                   their leadership in
 Leadership.                                         high regard, both
                                                     overall and on
                                                     specific facets of
                                                     leadership.
Merit System Compliance       An assessment of      To determine that
 Metric: Merit-Based           compliance with       decisions,
 Execution of the Leadership   merit system          policies,
 and Knowledge Management      principles and        processes, and
 System.                       related laws,         practices executed
                               rules, and            under the
                               regulations           Leadership and
                               governing the         Knowledge
                               Leadership and        Management system
                               Knowledge             comply with the
                               Management system.    merit system
                                                     principles and
                                                     related laws,
                                                     rules, and
                                                     regulations.
------------------------------------------------------------------------


------------------------------------------------------------------------
 
------------------------------------------------------------------------
Results-Oriented Performance   The agency has a diverse, results-
 Culture System Standard.       oriented, high-performing workforce and
                                a performance management system that
                                differentiates between high and low
                                levels of performance and links
                                individual/team/unit performance to
                                organizational goals and desired results
                                effectively.
------------------------------------------------------------------------


------------------------------------------------------------------------
   Required Outcome Metric         Description             Purpose
------------------------------------------------------------------------
Organization Metric: SES      Relationship between  To determine the
 Performance/Organizational    SES performance       extent to which SES
 Performance Relationship as   ratings and           appraisals and
 Linked to Mission.            accomplishment of     awards are
                               the agency's          appropriately based
                               strategic goals.      on achievement of
                                                     organizational
                                                     results.
Organization Metric:          Degree of linkage     To determine whether
 Workforce Performance         between employees'    all employees have
 Appraisals Aligned to         performance           performance
 Mission, Goals, and           appraisal plans and   appraisal plans
 Outcomes.                     agency mission,       that effectively
                               goals, and outcomes.  link to the
                                                     agency's mission,
                                                     goals, and
                                                     outcomes.
Employee Perspective Metric:  Items from Annual     To determine the
 Questions from Annual         Employee Survey.      extent to which
 Employee Survey about                               employees believe
 Performance Culture.                                their
                                                     organizational
                                                     culture promotes an
                                                     improvement in
                                                     processes, products
                                                     and services, and
                                                     organizational
                                                     outcomes.

[[Page 23018]]

 
Merit System Compliance       An assessment of      To determine that
 Metric: Merit-Based           compliance with       decisions,
 Execution of the              merit system          policies,
 Performance Culture System.   principles and        processes, and
                               related laws,         practices executed
                               rules, and            under the
                               regulations           Performance Culture
                               governing the         system comply with
                               Performance Culture   the merit system
                               system.               principles and
                                                     related laws,
                                                     rules, and
                                                     regulations.
------------------------------------------------------------------------


------------------------------------------------------------------------
 
------------------------------------------------------------------------
Talent Management System       The agency has closed skills, knowledge,
 Standard.                      and competency gaps/deficiencies in
                                mission-critical occupations, and has
                                made meaningful progress toward closing
                                skills, knowledge, and competency gaps/
                                deficiencies in all occupations used in
                                the agency.
------------------------------------------------------------------------


------------------------------------------------------------------------
   Required Outcome Metric         Description             Purpose
------------------------------------------------------------------------
Organization Metric:          Difference between    To determine how the
 Competency Gaps Closed for    competencies needed   agency should
 Mission-Critical              and competencies      target its
 Occupations.                  possessed by          recruitment,
                               employees in          retention, and
                               mission-critical      development efforts
                               occupations.          to bring the
                                                     competencies of its
                                                     workforce into
                                                     alignment with the
                                                     agency's current
                                                     and future needs.
Employee Perspective Metric:  Items from Annual     To determine the
 Questions from Annual         Employee Survey.      extent to which
 Employee Survey about                               employees think the
 Organizational Capacity.                            organization has
                                                     talent necessary to
                                                     achieve
                                                     organizational
                                                     goals.
Employee Perspective Metric:  Items from Annual     To determine the
 Questions from Annual         Employee Survey.      extent to which
 Employee Survey about                               employees are
 Employee Satisfaction.                              satisfied with
                                                     their jobs and
                                                     various aspects
                                                     thereof.
Merit System Compliance       An assessment of      To determine that
 Metric: Merit-Based           compliance with       decisions,
 Execution of the Talent       merit system          policies,
 Management System.            principles and        processes, and
                               related laws,         practices executed
                               rules, and            under the Talent
                               regulations           Management system
                               governing the         comply with the
                               Talent Management     merit system
                               system.               principles and
                                                     related laws,
                                                     rules, and
                                                     regulations.
------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION II--Strategic Alignment System                The Strategic Alignment System
                                                     -----------------------------------------------------------
                                                      Human Capital Planning
                                                     -----------------------------------------------------------
                                                      Workforce Planning
                                                     -----------------------------------------------------------
                                                      Human Capital Best Practices and Knowledge Sharing
                                                     -----------------------------------------------------------
                                                      Human Resources as Strategic Partner
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
The Strategic Alignment System......................  This section contains information specific to the
                                                       Strategic Alignment system, which focuses on having a
                                                       human capital management strategy that is aligned with
                                                       mission, goals, and organizational objectives.
Definition..........................................  A system led by senior management--typically the Chief
                                                       Human Capital Officer (CHCO)--that promotes alignment of
                                                       human capital management strategies with agency mission,
                                                       goals, and objectives through analysis, planning,
                                                       investment, measurement, and management of human capital
                                                       programs.
Standard............................................  Agency human capital management strategies are aligned
                                                       with mission, goals, and organizational objectives and
                                                       integrated into its strategic plans, performance plans,
                                                       and budgets.
Critical Success Factors............................  The Strategic Alignment system is comprised of the
                                                       following critical success factors:
                                                       Human Capital Planning: The agency designs a
                                                       coherent framework of human capital policies, programs,
                                                       and practices to achieve human capital requirements to
                                                       directly support the agency's strategic plan.
                                                       Workforce Planning: The organization identifies
                                                       the human capital required to meet organizational goals,
                                                       conducts analyses to identify competency gaps, develops
                                                       strategies to address human capital needs and close
                                                       competency gaps, and ensures the organization is
                                                       appropriately structured.
                                                       Human Capital Best Practices and Knowledge
                                                       Sharing: To leverage its efforts, the agency works with
                                                       others to share best practices and learn about new
                                                       developments.
                                                       Human Resources as Strategic Partner: Human
                                                       resources (HR) professionals act as consultants with
                                                       managers to develop, implement, and assess human capital
                                                       policies and practices to achieve the organization's
                                                       shared vision. Senior leaders, managers, HR
                                                       professionals, and key stakeholders contribute to the
                                                       human capital vision and the agency's broader strategic
                                                       planning process.
Applicable Merit System Principles..................  The following merit system principle is especially
                                                       relevant to the Strategic Alignment system:
                                                       The Federal work force should be used efficiently
                                                       and effectively. (5 U.S.C. 2301(b)(5)).
Metrics.............................................  Activities and outcomes of this system are assessed
                                                       through documented evidence of a Strategic Human Capital
                                                       Plan that includes human capital goals, objectives, and
                                                       strategies; a workforce plan; and performance measures
                                                       and milestones.
----------------------------------------------------------------------------------------------------------------
Agencies are required under OPM regulations implementing the CHCO Act to submit the Strategic Human Capital Plan
 described by this system to OPM on an annual basis.
----------------------------------------------------------------------------------------------------------------


[[Page 23019]]


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION II--Strategic Alignment System                The Strategic Alignment System
                                                     -----------------------------------------------------------
                                                      Human Capital Planning
                                                     -----------------------------------------------------------
                                                      Workforce Planning
                                                     -----------------------------------------------------------
                                                      Human Capital Best Practices and Knowledge Sharing
                                                     -----------------------------------------------------------
                                                      Human Resources as Strategic Partner
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Human Capital Planning.....................  When the key elements of the critical success factor Human
                                                       Capital Planning are effectively implemented, agencies
                                                       will realize the following results:
                                                      Effectiveness Results
                                                       The agency's strategic plan establishes an agency-
                                                       wide vision that guides human capital planning and
                                                       investment activities.
                                                       The agency has a system in place to continually
                                                       assess and improve human capital planning and investment
                                                       and their impact on mission accomplishments.
                                                       Managers are held accountable for effective
                                                       implementation of human capital plans and overall human
                                                       capital management.
                                                      Compliance Result
                                                       In accordance with the Chief Human Capital
                                                       Officers Act of 2002 (CHCO Act), the agency CHCO carries
                                                       out the functions authorized in 5 U.S.C. 1402, including
                                                       aligning the agency's human resources policies and
                                                       programs with organizational mission, strategic goals,
                                                       and performance outcomes.
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                             HUMAN CAPITAL PLANNING
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has a human capital planning system that:
     Promotes alignment of human capital         Effectiveness Indicators
     strategies with agency mission, goals, and           Key stakeholders, including HR, participate in
     objectives through analysis, planning, investment,   the development and revision of the agency's strategic
     and management of human capital programs             plan and facilitate workforce planning and analysis
                                                          efforts.
                                                          Documents substantiate involvement of key
                                                          human capital leaders and key stakeholders in the
                                                          planning process (e.g., team members of review boards,
                                                          working groups, or executive off-sites).
                                                          Human capital planning is managed by a human
                                                          capital review team or similar collaborative body
                                                          comprised of the CHCO and senior leaders and managers
                                                          from human resources, information technology, finance,
                                                          and mission-specific program areas.
                                                         Compliance Indicator
                                                          As provided by 5 U.S.C. 1303(c), the agency
                                                          holds managers and human resources officers
                                                          accountable for efficient and effective human
                                                          resources management in support of the agency's
                                                          mission, in accordance with merit system principles.
     Establishes a process for including human   Effectiveness Indicators
     capital activities and investments in the agency     The agency's annual performance plan and
     annual performance plan and budget                   budget request include human capital activities and
                                                          investments.
                                                          The annual plan identifies resources required
                                                          to implement human capital strategies (e.g., retention
                                                          bonuses, ``buyouts,'' awards, training, student loan
                                                          repayments, tuition assistance, Voluntary Early
                                                          Retirement Authority (VERA)). Funding requirements are
                                                          prioritized in case not all human capital strategies
                                                          can be funded.
                                                         Compliance Indicators
                                                          The agency has a standard for integrating its
                                                          human resources strategies into the budget as stated
                                                          in 5 U.S.C. 1303, as added by the CHCO Act of 2002.
                                                          As prescribed in the CHCO Act (31 U.S.C.
                                                          1115), the agency's performance plan provides a
                                                          description of how the performance goals and
                                                          objectives are to be achieved, including:
                                                         --The operational processes, training, skills and
                                                          technology, and the human capital information and
                                                          other resources
                                                         --The strategies required to meet the performance goals
                                                          and objectives.
                                                         [Note: In addition to amending and adding to title V,
                                                          the CHCO Act amends provisions of the Government
                                                          Performance and Results Act of 1993 (GPRA), which
                                                          requires agencies to prepare annual performance
                                                          plans.]

[[Page 23020]]

 
     Results in the development of an annual     Effectiveness Indicators
     human capital plan establishing human capital        The agency's planning process links the human
     goals, objectives, and investments that link to      capital framework to the mission, function, and
     the agency strategic plan and support mission        strategic management of the agency, as well as to
     accomplishment                                       other management initiatives such as e-Government and
                                                          competitive sourcing.
                                                          The agency has designed human capital
                                                          performance improvement strategies that support
                                                          mission accomplishment.
                                                          The agency has approved and communicated human
                                                          capital planning documents that describe human capital
                                                          goals, objectives, investments, and strategies that
                                                          are linked to the agency strategic plan.
                                                         Compliance Indicators
                                                          The agency includes human capital strategic
                                                          planning in agency performance plans and performance
                                                          reports as stated in 31 U.S.C. 1115, as amended by the
                                                          CHCO Act.
                                                          As prescribed in the CHCO Act (31 U.S.C.
                                                          1115), the agency's program performance report
                                                          includes a review of the performance goals and
                                                          evaluation of the agency's performance plan relative
                                                          to the agency's strategic human capital plan.
     Provides for a formal agency-wide           Effectiveness Indicators
     evaluation of the strategies in the human capital    The strategic human capital plan sets human
     plan and its implementation                          capital progress milestones and identifies those
                                                          responsible for meeting them.
                                                          The agency's annual performance review tracks
                                                          and measures human capital activities and investments.
                                                          The agency defines successful achievement of
                                                          the mission in terms of quantified long- and short-
                                                          term human capital performance goals.
                                                          The agency has a documented change management/
                                                          implementation process that identifies necessary human
                                                          capital practices that facilitate change.
The agency has a human capital planning system that:      Where appropriate, individual performance
                                                          plans and evaluations address accountability for
                                                          successful implementation of human capital strategies.
                                                          Human capital partnering is considered in
                                                          senior leaders' and managers' annual performance
                                                          reviews.
                                                         Compliance Indicators
                                                          In accordance with the Executive Performance
                                                          and Accountability Interim Rule (5 CFR 430 and 1330),
                                                          senior employee performance ratings appropriately and
                                                          clearly link to organizational mission, GPRA strategic
                                                          goals, or other program objectives.
                                                          Agency managers plan and communicate
                                                          performance elements and standards that are linked
                                                          with strategic planning initiatives in accordance with
                                                          the Executive Performance and Accountability Interim
                                                          Rule (5 CFR 430 and 1330).
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION II--Strategic Alignment System                The Strategic Alignment System
                                                     -----------------------------------------------------------
                                                      Human Capital Planning
                                                     -----------------------------------------------------------
                                                      Workforce Planning
                                                     -----------------------------------------------------------
                                                      Human Capital Best Practices and Knowledge Sharing
                                                     -----------------------------------------------------------
                                                      Human Resources as Strategic Partner
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Workforce Planning.........................  When the key elements of the critical success factor
                                                       Workforce Planning are effectively implemented, agencies
                                                       will realize the following results:
                                                      Effectiveness Results
                                                       The agency approaches workforce planning
                                                       strategically and in an explicit, documented manner. The
                                                       workforce plan links directly to the agency's strategic
                                                       and annual performance plans and is used to make
                                                       decisions about structuring and deploying the workforce.
                                                       Mission-critical occupations and competencies are
                                                       identified and documented, providing a baseline of
                                                       information for the agency to develop strategies to
                                                       recruit, develop, and retain talent needed for program
                                                       performance.
                                                       The agency's documented workforce plan identifies
                                                       current and future workforce competencies and the agency
                                                       is closing identified competency gaps through
                                                       implementation of gap reduction strategies such as:
                                                      --Restructuring.
                                                      --Recruitment.
                                                      --Competitive sourcing.
                                                      --Redeployment.
                                                      --Retraining.

[[Page 23021]]

 
                                                      --Retention (e.g., compensation, quality of work life).
                                                      --Technology solutions.
                                                       A business forecasting process is implemented
                                                       that identifies probable workforce changes, enabling
                                                       agency leadership to anticipate changes to human capital
                                                       that require action to ensure program performance.
                                                       Based on functional analyses, the agency is
                                                       appropriately structured to allow the right mix and
                                                       distribution of the workforce to best support the agency
                                                       mission.
                                                       Based on analysis of customer needs and workload
                                                       distribution, the agency has the right balance of
                                                       supervisory and non-supervisory positions to support the
                                                       agency mission.
                                                      Compliance Result
                                                       The CHCO assesses workforce characteristics and
                                                       future needs based on the agency's mission and strategic
                                                       plan in accordance with the CHCO Act of 2002 (5 U.S.C.
                                                       1402).
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                               WORKFORCE PLANNING
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency's workforce planning system includes a
 workforce analysis process that:
     Identifies mission-critical occupations     Effectiveness Indicators
     and competencies that are essential to achieving     Studies indicate which occupations and
     strategic goals.                                     competencies are essential to achieving the agency's
     Analyzes current strengths and weaknesses    strategic goals.
     regarding mission-critical occupations and           Mission-critical occupations and competencies
     competencies..                                       are identified in the agency's strategic plan and/or
     Identifies competency gaps and               performance plan, and its strategic human capital
     deficiencies, including current and future           plan.
     competency needs and losses due to voluntary         A methodology exists for determining mission-
     attrition..                                          critical occupations and competencies based in part on
     Systematically defines the size of the       professional qualifications (e.g., certifications,
     workforce needed to meet organizational goals..      licenses).
     Uses workforce planning reports and          Trends in mission-critical occupations are
     studies in conjunction with the best practice        analyzed in terms of the following suggested factors
     benchmarks to determine the most effective work      in order to continually adjust the agency's
     levels, workloads, and resources for efficient       recruitment and retention strategy to its current
     functioning..                                        state of need:
     Bases decisions related to restructuring,   --Number and distribution of positions by pay plan/
     redeployment, and reorganization on current          grade or pay band/series and geographic location.
     empirical and workforce analysis..                  --Average age.
     Conducts risk assessments to minimize       --Average length of service.
     adverse impacts on workforce due to restructuring.. --Diversity trends.
     Documents and assesses key supporting       --Average grade/band.
     functions of all business areas..                   --Retirement eligibility (current and expected).
     Regularly evaluates customer/citizen needs  --Turnover (e.g., separations, resignations, transfers,
     and incorporates these needs into workforce plans,   retirements).
     organizational goals, and functions..               --Surpluses in occupations and competencies.
                                                          Competency and/or staffing models have been
                                                          developed and there is analysis of gaps between the
                                                          current and desired competencies for mission-critical
                                                          occupations.
                                                          Documentation indicates workforce analysis
                                                          occurs on a periodic basis and is used to drive human
                                                          capital policy and decisions.
                                                          The agency uses a documented, systematic
                                                          strategic workforce planning process that addresses
                                                          the following issues:
                                                         --The link to the agency's strategic plan and the
                                                          strategic human capital plan.
                                                         --The link to the agency's annual performance/business
                                                          plan.
                                                         --Work activities required to carry out the goals and
                                                          objectives of the strategic plan (long term) and
                                                          performance plan (short term).
                                                         --How to structure the organization (e.g., determine
                                                          what must be done for continuance of Government
                                                          operations, determine necessary layers, streamline
                                                          functions, consolidate organizational elements) and
                                                          its work processes/workflow to carry out work
                                                          activities
                                                         --How to continually update the process to reflect
                                                          mission changes, technology advances (e.g., e-
                                                          Government), funding levels, competitive sourcing, and
                                                          other change drivers.
                                                         --Analysis and assessment of the current workforce
                                                          (e.g., skills, demographics, attrition) to meet long-
                                                          term and short-term goals and objectives.
                                                         --Workforce analysis including indicators such as size
                                                          and distribution of workforce (including Senior
                                                          Executive Service (SES)) by grade, series, geographic
                                                          locations, types of positions occupied, pay plan,
                                                          veteran representation, etc.
                                                         --How to develop current employees, recruit to fill
                                                          long-term and short-term goals, and provide for
                                                          continuity of leadership through succession to key
                                                          positions.
                                                         --How to minimize the adverse impact on the workforce
                                                          in restructuring the organization and its work
                                                          processes.
                                                          The agency uses multi-faceted techniques to
                                                          close competency gaps within the organization (e.g.,
                                                          strategic recruitment, mid-career hiring, training).

[[Page 23022]]

 
                                                          The agency conducts regular assessment of its
                                                          need for, and deployment of, executive resources.
     Forecasts future business changes in the    Effectiveness Indicators
     work of the agency and how the changes will affect   Line managers and key staff, including HR,
     the workforce.                                       consider and prepare for possible workforce changes in
     Regularly tracks established performance     areas such as mission/goals, technology, program
     measures, workforce trends, and technological        additions or deletions, functions, and outsourcing
     advances to ensure updated models for meeting        initiatives.
     citizen and organization needs.                      The agency's strategic plan and/or performance
                                                          plan and its strategic human capital plan reflect
                                                          forecasts of the human capital implications of future
                                                          business plans, including expectations and trends
                                                          concerning:
                                                         --Future workload and staffing needs.
                                                         --Workforce demographics in mission-critical
                                                          occupations.
                                                         --Changing competency requirements
                                                         --Industry benchmarking for similar occupations.
                                                         --Availability of competencies within applicable labor
                                                          markets.
                                                          The forecast is shared widely and used within
                                                          the agency by those who are responsible and
                                                          accountable to meet human capital needs.
The agency's workforce analysis process is based on
 sources of information such as:
     Current workforce demographic and           Effectiveness Indicators
     competitive sourcing studies.                        Information systems are in operation which
     Descriptive and documented plans and         provide human capital data to all appropriate
     processes for hiring, recruiting, employment, and    management levels to guide planning, analysis, and
     retention efforts..                                  decision making. Data integrity is maintained through
     Past agency assessments and workforce        quality control checks.
     data..                                               The agency conducts and uses management
     Information about anticipated changes        studies to:
     related to e-Government and competitive sourcing,   --Eliminate work and interfaces that add no value.
     goals, and objectives..
                                                         --Assess the organization's deployment strategies,
                                                          including identification of situations where
                                                          competitive sourcing is the most appropriate means to
                                                          meet their strategic objectives.
                                                          Staffing data showing trends in appointments,
                                                          promotions, conversions, separations, and retirements
                                                          are analyzed regularly, and management decisions
                                                          regarding workforce deployment are based on documented
                                                          data.
                                                          Turnover indicators (e.g., transfers,
                                                          retirements, and separations in each of the last
                                                          several years, overall, and by professional,
                                                          administrative, technical, clerical, and other
                                                          occupations) are monitored regularly.
The agency's workforce planning system includes an
 organizational structuring process that:
     Utilizes functional analysis to determine   Effectiveness Indicators
     appropriate organizational and physical structure.   Documentation of analyses of organizational
     Clearly organizes the agency staffing plan   functions shows review, planning, design, and, if
     by workflow, organizational initiative, and          applicable, implementation and outcome of efforts to
     functional area..                                    realign the workforce.
     Anticipates change in citizen needs by       Functional analyses and data analyses result
     continuously monitoring the evolution of needs,      in specific targets for workforce redeployment, which
     trends, and events affecting workforce planning..    are reflected in the strategic human capital plan and
     Avoids excess organizational layers.......   the workforce plan.
     Reduces redundant operations..............   The benefits of proposed changes to the
     Analyzes internal workforce statistics       structure and/or the workforce mix are quantified and
     (e.g., ratio of managers to workforce,               incorporated into the budget submissions.
     distribution of workforce), data, and trends to      Duplications in support areas such as
     make the most efficient choices for workforce        communications, legislative affairs, budget, and
     deployment..                                         personnel and/or duplications in program areas are
                                                          reduced and programs are streamlined and consolidated
                                                          wherever possible.
                                                          Analysis of data includes statistics such as
                                                          ratio of administrative jobs (e.g., administrative
                                                          officer, budget analyst, budget clerk, management
                                                          analyst, personnel clerk, personnel professional,
                                                          support services specialist) to the workforce,
                                                          distribution of administrative jobs by organizational
                                                          component and geographic location, and trends in
                                                          numbers and proportions of administrative jobs.
                                                          A model organization has been developed that:
                                                         --Reflects the numbers of employees needed and their
                                                          appropriate skill and grade or pay band/level mix.
                                                         --Identifies key leadership positions.
                                                         --Includes specific recruiting and training/development
                                                          activities.
                                                         Compliance Indicator
                                                          The agency appropriately applies pertinent
                                                          regulations and statutes to group or individual
                                                          deployment-related actions as specified in the Talent
                                                          Management system (Voluntary Early Retirement
                                                          Authority (VERA), Voluntary Separation Incentive
                                                          Payments (VSIP), Transfer of Function (TOF), etc.).
The agency's organizational structuring process
 demonstrates that it:

[[Page 23023]]

 
     Includes statistics regarding number of     Effectiveness Indicators
     supervisors, their series and grade/pay band,        Analysis of data includes statistics related
     geographic location, and ratio of supervisors to     to the number of supervisors, their geographic and
     employees.                                           organizational location, their series and grades/pay
     Obtains the mix of supervisory and non-      bands, the ratio of supervisors to employees, percent
     supervisory positions to best meet customer needs..  of supervisors in grades GS-12-15 or equivalent, etc.
     Documents the need for redirecting           Supervisory needs are clearly tied to the
     supervisory positions and the planned program        workflow process and the organizational structure
     design and assessment for the implemented changes..  resulting in a staffing plan that indicates the
     Addresses impediments to restructuring by    necessary number of supervisors by functional area.
     analyzing solutions found within the current         The agency has documented the need to redirect
     environment..                                        supervisory positions, designed and implemented a
     Uses a documented change management          program to support their redeployment, and developed
     strategy..                                           an evaluation process to determine if the anticipated
                                                          outcomes are being achieved.
                                                          Impediments are identified and solutions to
                                                          overcome impediments within the current environment
                                                          (e.g., Title V and/or other appropriate systems) are
                                                          identified and documented.
                                                          Through consultation with the Office of
                                                          Personnel Management (OPM), the agency makes a sound
                                                          business case for any waivers, exemptions, or
                                                          regulatory or legislative relief needed to overcome
                                                          barriers.
                                                          The agency has a documented change management
                                                          strategy, where appropriate, to overcome barriers and
                                                          facilitate restructuring/culture change efforts.
                                                          The agency's restructuring, redeployment, and
                                                          reorganization decisions are substantiated with
                                                          empirical evidence.
                                                          Agency records indicate that, during
                                                          restructuring, redeployment, and reorganizing,
                                                          operational disruption is minimized through the use
                                                          of:
                                                         --Effective internal and external communication plans
                                                         --Retraining
                                                         --Reassignment
                                                         --Placement assistance
                                                         --Relocation allowances
                                                         --VERA and VSIP where appropriate
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION II--Strategic Alignment System                The Strategic Alignment System
                                                     -----------------------------------------------------------
                                                      Human Capital Planning
                                                     -----------------------------------------------------------
                                                      Workforce Planning
                                                     -----------------------------------------------------------
                                                      Human Capital Best Practices and Knowledge Sharing
                                                     -----------------------------------------------------------
                                                      Human Resources as Strategic Partner
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Human Capital Best Practices and Knowledge   When the key elements of the critical success factor Human
 Sharing                                               Capital Best Practices and Knowledge Sharing are
                                                       Effectively implemented, agencies will realize the
                                                       following results:
                                                      Effectiveness Result
                                                       The agency looks beyond its own experience and
                                                       resources when developing human capital strategies and
                                                       works with others to share best practices.
                                                      Compliance Result
                                                       As provided in 5 U.S.C. 1303(c), the agency holds
                                                       managers and human resources officers accountable for
                                                       efficient and effective human resources management in
                                                       support of the agency's mission, in accordance with merit
                                                       system principles.
                                                      The following page provides key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
           HUMAN CAPITAL BEST PRACTICES AND KNOWLEDGE SHARING
-------------------------------------------------------------------------
                                              Suggested Performance
              Key Elements                          Indicators
------------------------------------------------------------------------
The agency has a human capital best
 practices and knowledge sharing system
 that:
     Benchmarks best practices   Effectiveness Indicator
     and lessons learned by other         The agency uses
     Government agencies and private      resources (e.g., Web sites,
     sector organizations.                research findings, special
                                          studies, program guidance)
                                          from sources such as:
                                         --OPM.
                                         --Office of Management and
                                          Budget (OMB).
                                         --Government Accountability
                                          Office (GAO.)
                                         --Society for Human Resource
                                          Management (SHRM).
                                         --International Public
                                          Management Association for
                                          Human Resources (IPMA-HR).

[[Page 23024]]

 
                                         Compliance Indicator
                                          The agency's CHCO
                                          identifies best practices and
                                          benchmarking studies in
                                          accordance with the CHCO Act
                                          (5 U.S.C. 1402).
     Establishes a method or     Effectiveness Indicators
     process for collaborating with       The agency uses
     other agencies regarding effective   Governmentwide benchmarks
     human capital strategies.            (e.g., staffing timeliness,
                                          Central Personnel Data Files/
                                          FedScope, Federal Human
                                          Capital Survey (FHCS)
                                          responses) in setting human
                                          capital strategic goals.
                                          The agency
                                          participates in human capital
                                          managerial/professional
                                          employee groups (e.g., the
                                          Chief Human Capital Officers
                                          Council, the Small Agency
                                          Council, Federal Executive
                                          Boards, and National Academy
                                          of Public Administration).
     Provides valuable           Effectiveness Indicators
     information to human capital         Agency representatives
     planners on effective human          participate in Governmentwide
     capital strategies that is used to   collaborative efforts and/or
     improve human capital planning.      managerial/professional/
                                          employee organizations to
                                          share best practices and
                                          leverage lessons learned.
------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION II--Strategic Alignment System                The Strategic Alignment System
                                                     -----------------------------------------------------------
                                                      Human Capital Planning
                                                     -----------------------------------------------------------
                                                      Workforce Planning
                                                     -----------------------------------------------------------
                                                      Human Capital Best Practices and Knowledge Sharing
                                                     -----------------------------------------------------------
                                                      Human Resources as Strategic Partner
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Human Resources as Strategic Partner.......  When the key elements of the critical success factor Human
                                                       Resources as Strategic Partner are effectively
                                                       implemented, agencies will realize the following results:
                                                      Effectiveness Results
                                                       HR professionals and key stakeholders are
                                                       involved in the agency strategic and workforce planning
                                                       efforts.
                                                       The HR function is adequately staffed and
                                                       prepared, in competencies and resources, to proactively
                                                       partner and consult with line managers.
                                                       The HR staff reaches out to other organizational
                                                       functions and components through facilitation,
                                                       coordination, and counseling to provide integrated
                                                       mission support.
                                                      Compliance Result
                                                       As provided by 5 U.S.C. 1303(c), the agency holds
                                                       managers and human resources officers accountable for
                                                       efficient and effective human resources management in
                                                       support of the agency's mission, in accordance with merit
                                                       system principles.
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                      HUMAN RESOURCES AS STRATEGIC PARTNER
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency's human resources system:
     Is proactively involved in the agency       Effectiveness Indicators
     strategic and workforce planning efforts.            The HR staff consults with managers and
                                                          supervisors across the agency on various management
                                                          issues.
                                                          The HR staff provides advice and guidance to
                                                          managers on human capital strategies tailored to meet
                                                          organizational needs.
                                                          The HR staff assesses and anticipates needs of
                                                          customers (i.e., managers, supervisors, employees, and
                                                          applicants), develops functions and services to
                                                          support and fulfill those needs, ensures quality of
                                                          services, and communicates program requirements to
                                                          customers.
                                                          The HR staff involves line functions in
                                                          program review and/or development and likewise is
                                                          invited by line functions to organizational meetings
                                                          and retreats to identify and advise on HR issues.
                                                          FHCS and/or other surveys or interviews
                                                          indicate that HR staff members are viewed as internal
                                                          consultants and that human capital strategies support
                                                          the broader agency mission.
                                                          Policies describe the process and procedures
                                                          for communicating customer issues, resolving customer
                                                          dissatisfaction, and handling customer comments.
                                                          The HR staff measures and communicates the
                                                          value of products and services it provides through
                                                          feedback mechanisms.

[[Page 23025]]

 
                                                         Compliance Indicator
                                                          As provided by 5 U.S.C. 1303(c), the agency
                                                          holds managers and human resources officers
                                                          accountable for efficient and effective human
                                                          resources management in support of the agency's
                                                          mission, in accordance with merit system principles.
     Includes a staff that has the skills and    Effectiveness Indicators
     competencies required for partnering with            The agency conducts HR staff development needs-
     executives and managers in strategic planning.       assessment studies to identify competency gaps.
                                                          The agency has strategies (e.g., automation,
                                                          competitive sourcing, recruitment, mentoring,
                                                          training) in place to close competency gaps in HR
                                                          staff and to provide managers the advice and tools
                                                          they need to operate.
                                                          HR staff conducts program reviews, customer
                                                          surveys, and regular assessments of information
                                                          systems and other support functions to identify areas
                                                          for continuing improvement.
                                                          Analysis of staffing levels includes
                                                          considerations such as HR servicing ratio, HR staff
                                                          distribution by series/grade/pay band, HR staff
                                                          average grade/pay band, age, length of service,
                                                          training completed, retirement eligibility, HR
                                                          supervisory ratio, and ratio of personnel actions to
                                                          personnel staff.
     Has a human resource information system     Effectiveness Indicator
     with the capacity to provide relevant and reliable   HR staff partners with managers to:
     data necessary for making fact-based human capital  --Conduct workforce studies and analyze results in
     decisions.                                           collaboration with managers; the data is used for
                                                          decision making
                                                         --Use all available functions and features of the
                                                          agency's current system to facilitate effective agency
                                                          workforce management (e.g., process and report on
                                                          personnel transactions, query data) and provide
                                                          routine reports to managers.
                                                         --Participate, as appropriate (i.e., depending on level
                                                          in organization), in agency and/or OPM initiatives to
                                                          support the OPM Enterprise Human Resources Integration
                                                          initiative, which will support HR management across
                                                          Government.
                                                         --Participate, as appropriate, in other e-government
                                                          initiatives such as e-payroll and RSM.
                                                         --The agency uses an HR information system that
                                                          promotes employee self-service and manager access to a
                                                          broad range of human capital information and
                                                          indicators.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION III--Leadership and Knowledge Management      The Leadership and Knowledge Management System
 System
                                                     -----------------------------------------------------------
                                                      Leadership Succession Management
                                                     -----------------------------------------------------------
                                                      Change Management
                                                     -----------------------------------------------------------
                                                      Integrity and Inspiring Employee Commitment
                                                     -----------------------------------------------------------
                                                      Continuous Learning
                                                     -----------------------------------------------------------
                                                      Knowledge Management
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
The Leadership and Knowledge Management System......  This section contains information specific to the
                                                       Leadership and Knowledge Management system, which focuses
                                                       on identifying and addressing agency leadership
                                                       competencies so that continuity of leadership is ensured,
                                                       knowledge is shared across the organization, and an
                                                       environment of continuous learning is present.
Definition..........................................  A system that ensures continuity of leadership by
                                                       identifying and addressing potential gaps in effective
                                                       leadership and implements and maintains programs that
                                                       capture organizational knowledge and promote learning.
Standard............................................  Agency leaders and managers effectively manage people,
                                                       ensure continuity of leadership, and sustain a learning
                                                       environment that drives continuous improvement in
                                                       performance, and provide a means to share critical
                                                       knowledge across the organization. Knowledge management
                                                       must be supported by an appropriate investment in
                                                       training and technology.
Critical Success Factors............................  The Leadership and Knowledge Management system is
                                                       comprised of five critical success factors:
                                                       Leadership Succession Management. The
                                                       organization identifies leadership competencies and
                                                       establishes objectives and strategies to ensure there is
                                                       a continuous pipeline of available leadership within the
                                                       organization.
                                                       Change Management: The agency has in place
                                                       leaders who understand what it takes to effectively bring
                                                       about changes that achieve significant and sustained
                                                       improvements in performance.
                                                       Integrity and Inspiring Employee Commitment:
                                                       Leaders maintain high standards of honesty and ethics
                                                       that serve as a model for the whole workforce. Leaders
                                                       promote teamwork and communicate the organization's
                                                       shared vision to all levels of the organization and seek
                                                       feedback from employees. Employees respond by maintaining
                                                       high standards of honesty and ethics.

[[Page 23026]]

 
                                                       Continuous Learning: Leaders foster a learning
                                                       culture that provides opportunities for continuous
                                                       development and encourages employees to participate.
                                                       Leaders invest in education, training, and other
                                                       developmental opportunities to help themselves and their
                                                       employees build mission-critical competencies.
                                                       Knowledge Management: The organization
                                                       systematically provides resources, programs, and tools
                                                       for knowledge sharing across the organization in support
                                                       of its mission accomplishment.
                                                      Together, these critical success factors ensure:
                                                       A constant flow of leaders who can properly
                                                       direct an agency's efforts to achieve results.
                                                       A workforce with the competencies required to
                                                       achieve the agency's mission.
                                                       That the workforce is motivated to use its
                                                       competencies in service of the agency's mission.
Applicable Merit System Principles..................  The following merit system principle is especially
                                                       relevant to the Leadership and Knowledge Management
                                                       system:
                                                       Employees should be provided effective education
                                                       and training in cases in which such education and
                                                       training would result in better organizational and
                                                       individual performance. (5 U.S.C. 2301(b)(7)).
Required Outcome Metrics............................  The following are required outcome metrics for the
                                                       Leadership and Knowledge Management system.
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
       Required Metric             Description             Purpose
------------------------------------------------------------------------
Organization Metric:          Difference between    To determine how the
 Competency Gaps Closed for    competencies needed   agency should
 Management and Leadership.    and competencies      target its
                               possessed by          recruitment,
                               managers and          retention, and
                               leaders.              development efforts
                                                     to bring the
                                                     competencies of its
                                                     managers and
                                                     leaders into
                                                     alignment with the
                                                     agency's current
                                                     and future needs.
Employee Perspective Metric:  Items from Annual     To determine the
 Questions from Annual         Employee Survey.      extent to which
 Employee Survey about                               employees hold
 Satisfaction with                                   their leadership in
 Leadership.                                         high regard, both
                                                     overall and on
                                                     specific facets of
                                                     leadership.
Merit System Compliance       An assessment of      To determine that
 Metric: Merit-Based           compliance with       decisions,
 Execution of the Leadership   merit system          policies,
 and Knowledge Management      principles and        processes, and
 System.                       related laws,         practices executed
                               rules, and            under the
                               regulations           Leadership and
                               governing the         Knowledge
                               Leadership and        Management system
                               Knowledge             comply with the
                               Management system.    merit system
                                                     principles and
                                                     related laws,
                                                     rules, and
                                                     regulations.
------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Suggested Metrics                                     In addition to the required outcome metrics, the following
                                                       metrics associated with the Leadership and Knowledge
                                                       Management system are suggested.
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
      Suggested Metric             Description             Purpose
------------------------------------------------------------------------
Bench Strength..............  The relationship      To ensure that
                               between the number    enough internal
                               of employees in the   organizational
                               leadership pipeline   capacity exists to
                               who demonstrate the   mitigate leadership
                               required level of     attrition and
                               performance on        maintain progress
                               leadership            toward mission
                               competencies and      attainment.
                               the number of
                               critical leadership
                               positions.
Time To Hire Critical         Average time from     To determine the
 Leadership Positions.         date vacancy closes   efficiency of a
                               to date offer is      critical phase of
                               extended (expressed   the Federal hiring
                               in working days).     process.
Succession Sources..........  Percentage of         To determine the
                               critical leadership   extent to which
                               positions filled      various succession
                               from internal         planning efforts
                               sources, other        (including internal
                               Government sources    career development
                               (including            programs) result in
                               military), and non-   the selection of
                               Government sources.   critical leaders.
Culture of Workforce          Items from Annual     To determine the
 Improvement.                  Employee Survey.      extent to which
                                                     employees believe
                                                     their leaders have
                                                     developed a culture
                                                     that values
                                                     personal growth.
------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION III--Leadership and Knowledge Management      The Leadership and Knowledge Management System
 System
                                                     -----------------------------------------------------------
                                                      Leadership Succession Management
                                                     -----------------------------------------------------------
                                                      Change Management
                                                     -----------------------------------------------------------
                                                      Integrity and Inspiring Employee Commitment
                                                     -----------------------------------------------------------
                                                      Continuous Learning
                                                     -----------------------------------------------------------
                                                      Knowledge Management
----------------------------------------------------------------------------------------------------------------


[[Page 23027]]


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Leadership Succession Management...........  When the key elements of the critical success factor
                                                       Leadership Succession Management are effectively
                                                       implemented, agencies will realize the following results:
                                                      Effectiveness Result
                                                       The agency has taken action to ensure continuity
                                                       of leadership through succession planning and executive
                                                       development programs that results in a diverse pool of
                                                       qualified internal, other Government, and non-Government
                                                       sources for all mission-critical leadership positions.
                                                      Compliance Result
                                                       The agency has established a comprehensive
                                                       management succession program that provides training to
                                                       employees to develop them as managers for the agency as
                                                       prescribed by the Federal Workforce Flexibility Act of
                                                       2004.
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                        LEADERSHIP SUCCESSION MANAGEMENT
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has a leadership succession management
 system that:
     Is based on accurate data on the current    Effectiveness Indicators
     workforce.                                           The agency's leadership development strategy
     Is based on accurate projections of          and policy, which reflect its mission and culture, are
     attrition at all leadership levels..                 developed, documented, and implemented, based on the
     Identifies a diverse pool of high-           agency's workforce analysis and succession planning
     potentialleaders through a fair and accurate         process.
     process..                                            The agency performs an ongoing workforce
     Includes a formal process to address         analysis to identify current and future workforce and
     management potential..                               related leadership needs. The analysis includes
                                                          information concerning:
                                                         --Workforce size
                                                         --Workforce deployment by location, function, and
                                                          occupation
                                                         --Leadership competencies needed for mission
                                                          accomplishment
                                                         --Trends in hiring, promotion, reassignment, and
                                                          attrition in leadership positions
                                                         --Trends in competency needs (e.g., surpluses and gaps
                                                          in specific skills).
                                                         --A forecast of future leadership requirements and
                                                          changes due to retirement and other losses
                                                         --Inclusion of all demographic groups.
                                                          A succession planning process based on
                                                          workforce analysis is in place that considers current
                                                          and future leadership needs to meet strategic and
                                                          performance plans. The plan includes:
                                                         --Specific goals and identification of leadership
                                                          positions needed
                                                         --Target positions and key leadership competencies
                                                          (i.e., a leadership competency model based on the
                                                          Office of Personnel Management (OPM) executive core
                                                          qualifications (ECQs) plus appropriate agency-specific
                                                          competencies)
                                                         --Potential sources of talent (e.g., internal, other
                                                          Government, non-Government) that best support the
                                                          agency's mission and culture
                                                         --Recruitment or development strategies needed to
                                                          ensure availability of well qualified staff to fill
                                                          leadership positions at all levels including
                                                          identification of high-potential employees and
                                                          establishment of a formal Senior Executive Service
                                                          (SES) candidate development program, other merit-based
                                                          methods of developing future executives, and/or other
                                                          appropriate development programs.
                                                          The agency conducts regular assessments of
                                                          leadership policies and performance of its leaders to
                                                          ensure that succession planning goals (e.g.,
                                                          recruitment and retention of high-performing leaders)
                                                          are being met.
     Invests in an SES candidate development     Effectiveness Indicators
     program linked to the ECQs.                          The agency leadership has demonstrated its
     Provides mentoring to new and prospective    commitment to leadership development through
     leaders..                                            dedication of resources (e.g., appropriate percentage
     Invests in first-line supervisors to         of salaries set aside specifically for leadership
     ensure they have the competencies to direct the      development) to develop current and future leaders.
     day-to-day work of the agency..                      Trained mentors are available to employees
     Includes an ``employee development''         participating in development programs.
     performance indicator for managers and senior
     leaders..
                                                         Compliance Indicator
                                                          As prescribed by 5 CFR 412, the agency has
                                                          established a system to provide:
                                                         --The competencies needed by supervisors, managers, and
                                                          executives to perform their current functions at the
                                                          mastery level of proficiency
                                                         --Learning through development and training in the
                                                          context of succession planning and corporate
                                                          perspective to prepare individuals for advancement.

[[Page 23028]]

 
     Invests in the continuous development of    Effectiveness Indicators
     senior leadership                                    Leadership skill training and development
                                                          programs address the needs of each level of management
                                                          (e.g., supervisors, managers, executives, and
                                                          potential leaders). These programs have been
                                                          communicated to all levels of management and potential
                                                          leaders and are reflected in Individual Development
                                                          Plans (IDPs) for this group.
                                                          Training and development needs are identified
                                                          in IDPs by obtaining input from multiple sources
                                                          (e.g., customers, peers, subordinates, supervisors).
                                                          IDPs are monitored and include training and
                                                          experiential development. Identified needs are
                                                          generally being met.
                                                          The agency's annual training needs assessment
                                                          reflects needs identified in IDPs. Training is
                                                          targeted to meet the most commonly identified needs.
                                                          Employee survey results, including the Federal
                                                          Human Capital Survey, indicate that employees believe
                                                          that leadership development receives appropriate
                                                          emphasis and dedicated resources and results in
                                                          effective leaders who are a source of motivation.
                                                          Agency leadership development programs are
                                                          analyzed against agency measures of success to
                                                          determine usage and impact including statistical data
                                                          on average grade or pay band/age/length of service,
                                                          diversity, attrition, and retirement eligibility. The
                                                          analysis is documented and used by senior management
                                                          to make decisions about leadership development issues
                                                          and resource allocation.
                                                         Compliance Indicator
                                                          The agency has a program to provide training
                                                          to managers on actions, options, and strategies to use
                                                          in (1) communicating with employees whose performance
                                                          is unacceptable, and (2) mentoring employees and
                                                          improving employee performance and productivity as
                                                          prescribed by the Federal Workforce Flexibility Act.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION III--Leadership and Knowledge Management      The Leadership and Knowledge Management System
 System
                                                     -----------------------------------------------------------
                                                      Leadership Succession Management
                                                     -----------------------------------------------------------
                                                      Change Management
                                                     -----------------------------------------------------------
                                                      Integrity and Inspiring Employee Commitment
                                                     -----------------------------------------------------------
                                                      Continuous Learning
                                                     -----------------------------------------------------------
                                                      Knowledge Management
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Change Management..........................  When the key elements of the critical success factor
                                                       Change Management are effectively implemented, agencies
                                                       will realize the following result:
                                                      Effectiveness Result
                                                       The agency has in place leaders who understand
                                                       what it takes to effectively bring about changes that
                                                       achieve significant and sustained improvements in
                                                       performance.
                                                      The following page provides key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                CHANGE MANAGEMENT
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has a change management system in which
 leaders:
     Provide adequate resources to support the   Effectiveness Indicators
     change.                                              Annual performance plans, budgets, and
     Take visible actions to support new ways     performance reports document plans for and progress
     of working..                                         toward change goals.
     Understand there is a need for a change      Individual performance plans rate leaders and
     process and facilitate the change management         managers on their implementation of change
     process by monitoring and addressing problems in     initiatives.
     the transition process..                             Newsletters, intranet, and other agency media
     Hold people accountable for performance      show efforts to share a vision for change.
     results and meeting their commitments to the         The agency has a strategy and plan for
     change process..                                     communication of change.
     Focus on performance and progress against    The Federal Human Capital Survey (FHCS) and/or
     change milestones..                                  other climate surveys are conducted and analyzed and
                                                          relevant results lead to change in strategy.
----------------------------------------------------------------------------------------------------------------


[[Page 23029]]


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION III--Leadership and Knowledge Management      The Leadership and Knowledge Management System
 System
                                                     -----------------------------------------------------------
                                                      Leadership Succession Management
                                                     -----------------------------------------------------------
                                                      Change Management
                                                     -----------------------------------------------------------
                                                      Integrity and Inspiring Employee Commitment
                                                     -----------------------------------------------------------
                                                      Continuous Learning
                                                     -----------------------------------------------------------
                                                      Knowledge Management
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Integrity and Inspiring Employee Commitment  When the key elements of the critical success factor
                                                       Integrity and Inspiring Employee Commitment are
                                                       effectively implemented, agencies will realize the
                                                       following results:
                                                      Effectiveness Results
                                                       Leaders maintain high standards of honesty and
                                                       ethics that serve as a model for the whole workforce;
                                                       employees respond by maintaining high standards of
                                                       honesty and ethics.
                                                       Leaders promote teamwork and communicate the
                                                       organization's shared vision to all levels of the
                                                       organization, and seek feedback from employees.
                                                      Compliance Result
                                                       The agency complies with the Ethics in Government
                                                       Act of 1978 and other statutory and governing guidance
                                                       compiled by the Office of Government Ethics to cover
                                                       conflict of interest and ethics. The agency also complies
                                                       with its own supplemental standards of conduct.
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                   INTEGRITY AND INSPIRING EMPLOYEE COMMITMENT
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
Employee integrity and commitment is in evidence when:
     Senior leaders foster an environment of     Effectiveness Indicators
     open communication (top-down and bottom-up           The FHCS and/or other employee climate sureys
     communication) throughout the agency.                reflect a positive, committed work environment.
     Employees view the agency as a desirable     Human resources staff, in partnership with
     place to work..                                      management, seeks anhd considers continuous feedback
     Teamwork is valued and rewarded in the       from employees (e.g., focus groups) regarding
     agency..                                             workplace environment and responds to feedback with
     Agency policies reinforce the Office of      appropriate action.
     Government Ethics Standards of Ethical Conduct for   Agency has been cited in applicant feedback
     Executive Branch Employees and, at a minimum, meet   and media stories as an employer of choice.
     the Office's requirements for ethics training.       Agency awards policy promotes teamwork through
     Ethical behavior and standards are included in       the use of group awards and communication of group
     competencies for all employees. Programs for         successes.
     identifying violations exist and leaders take        Agency analyzes trends across management
     appropriate disciplinary actions..                   indicators such as per capita overtime, worker's
                                                          compensation charges, sick leave usage, forfeiture of
                                                          annual leave, turnover, removal of probationers,
                                                          disciplinary actions, adverse actions (5 CFR part
                                                          752), and exit interviews.
                                                          Senior leaders sign statements of conduct or
                                                          agency-wide declarations.
                                                          The FHCS and/or other employee surveys report
                                                          that an ethical climate exists, that employees are
                                                          aware of their whistleblower rights and other
                                                          personnel protections, and they are likely to report
                                                          wrongdoing.
                                                          Agency has a whistleblower support and
                                                          Inspector General hotline program; activities are
                                                          recorded and analyzed.
                                                          Communication strategies include a variety of
                                                          media to convey senior leadership's message to the
                                                          workforce.
                                                          Agency has a positive record in program
                                                          reviews and congressional reviews.
Employee integrity and commitment is in evidence when:   Compliance Indicators
                                                          Agency is certified by the Office of Special
                                                          Counsel to be in compliance with the 5 U.S.C 2302(c)
                                                          requirement that the workforce be informed of
                                                          whistleblower rights and other personnel protections.
                                                          Provides current and future leaders with an
                                                          annual course on Government ethics.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION III--Leadership and Knowledge Management      The Leadership and Knowledge Management System
 System
                                                     -----------------------------------------------------------
                                                      Leadership Succession Management
                                                     ===========================================================
                                                      Change Management
                                                     ===========================================================

[[Page 23030]]

 
                                                      Integrity and Inspiring Employee Commitment
                                                     ===========================================================
                                                      Continuous Learning
                                                     ===========================================================
                                                      Knowledge Management
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Continuous Learning........................  When the key elements of the critical success factor
                                                       Continuous Learning are effectively implemented, agencies
                                                       will realize the following results:
                                                      Effectiveness Results
                                                       The agency has achieved a culture of continuous
                                                       learning through investments in education, training, and
                                                       other developmental opportunities that help employees
                                                       build mission-critical competencies.
                                                       Training and development initiatives and
                                                       strategies support mission-critical competencies, are
                                                       linked to the agency mission, and have demonstrated a
                                                       positive impact on agency mission performance.
                                                       The agency uses appropriate learning technology
                                                       and innovative learning strategies to meet the training
                                                       and development needs of the workforce.
                                                       The agency has developed and implemented a
                                                       process to evaluate its training and development program
                                                       impact in terms of learning, performance, work
                                                       environment, and contribution to mission accomplishment.
                                                       The results of the evaluation reflect a positive
                                                       contribution to mission accomplishment.
                                                      Compliance Results
                                                       As prescribed by the CHCO Act of 2002 (5 U.S.C.
                                                       1402), the agency CHCO has developed and advocates a
                                                       culture of continuous learning to attract and retain
                                                       employees with superior abilities and sets the workforce
                                                       development strategy.
                                                       The agency's training programs comply with the
                                                       provisions of 5 U.S.C. 4101 and 5 CFR 410 and 412.
                                                       As provided in the CHCO Act of 2002 (5 U.S.C.
                                                       1304), the agency:
                                                      --Sustains a culture that cultivates and develops a high-
                                                       performing workforce.
                                                      --Develops and implements a knowledge management strategy
                                                       supported by appropriate investment in training and
                                                       technology.
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                               CONTINUOUS LEARNING
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has a continuous learning system that:
     Is based on accurate information from IDPs  Effectiveness Indicators
     and an annual organizational needs analysis.         A training needs assessment is conducted that
     Focuses on mission-critical occupations...   is linked to strategic and mission-critical
                                                          competencies. Based on assessment results, employees
                                                          are trained in specific, job-related skills and
                                                          knowledge.
                                                          Training programs are designed and implemented
                                                          which build competencies that are important to
                                                          strategic goals and objectives and the agency's
                                                          performance plan execution.
                                                         --Competency-based career development programs,
                                                          including various development activities and learning
                                                          opportunities, have been implemented and documented
                                                          and are being used by employees.
                                                         --Competency models have been established which
                                                          document standards for competency levels (e.g., entry,
                                                          journey, expert).
                                                          IDPs, or a similar process, are established
                                                          for employees in mission-critical occupations. IDP
                                                          completion is tracked and review indicates that IDPs
                                                          are being completed in most cases.
                                                          Performance evaluations reflect consideration
                                                          of employee developmental training and developmental
                                                          needs. Review indicates that action is usually taken
                                                          to follow through on meeting these needs.
                                                          Agency policy and practice reflect that
                                                          responsibility for employee development is shared
                                                          between employees and managers.
                                                         Compliance Indicators
                                                          In accordance with 5 CFR 410, the agency
                                                          assesses training needs annually.
                                                          The agency closes skill gaps in mission-
                                                          critical occupations in accordance with the CHCO Act
                                                          (5 U.S.C. 1304).
     Uses a wide variety of methods including    Effectiveness Indicators
     classroom training, distance learning, mentoring,    The agency conducts an analysis to select and
     and experiential learning.                           implement the best array of learning strategies (e.g.,
     Encourages attendance at conferences,        rotational assignment, shadowing, mentoring) for the
     workshops, and seminars..                            targeted audience(s) to provide them with mission-
                                                          critical competencies.
                                                          Learning technology and other alternative
                                                          learning strategies are reflected in the agency's
                                                          strategic human capital planning documents and
                                                          training plans.
                                                          Where appropriate, the agency has implemented
                                                          e-learning activities such as eGov Online Learning
                                                          Center.
                                                          The agency has invested in the infrastructure
                                                          necessary to leverage learning opportunities that
                                                          include the application of reasonable accommodation,
                                                          where justified by return-on-investment analysis.

[[Page 23031]]

 
                                                          Leaders are responsible for leadership
                                                          development and emphasize the value of learning,
                                                          foster learning opportunities for employees, and
                                                          demonstrate their support through personal involvement
                                                          and resource allocation decisions. For example, they:
                                                         --Set aside a percentage of salary dollars for employee
                                                          training and development.
                                                         --Provide tuition assistance for formal education.
                                                         --Establish long-term technical development programs.
                                                         --Fund employee certification requirements as
                                                          authorized.
                                                          Policies, practices, and resource allocation
                                                          decisions demonstrate agency support for continuous
                                                          learning.
     Is properly funded, monitored, and          Effectiveness Indicators
     evaluated.
     Is administered fairly.                      Employee survey results, including the Federal
                                                          Human Capital Survey, indicate that employees believe
                                                          they have appropriate opportunities to develop skills
                                                          through training and experience.
                                                          Analysis of education, training, and
                                                          development opportunities shows no disparate treatment
                                                          of segments of the workforce (i.e., training is
                                                          appropriately aligned with workforce planning goals,
                                                          priorities are based on available funding, and
                                                          opportunities are provided equitably across the
                                                          employee population).
                                                          A training evaluation system has been
                                                          implemented which measures the impact of training at
                                                          the following levels:
                                                         --Did learning occur?
                                                         --Was learning applicable to job performance or other
                                                          behavior that is important to the organization and to
                                                          results?
                                                         --Did the employee apply the learning or behavior to
                                                          his/her job or work environment?
                                                         --If the employee applied the learning, did it have the
                                                          expected impact on performance or other job-related
                                                          behavior?
                                                          An analysis has been conducted of the
                                                          evaluation results and this information is used to
                                                          make decisions about investments in employee training
                                                          and development. Generally, the evaluation indicates
                                                          that training and development investments are making a
                                                          positive impact on the organization's performance and/
                                                          or work environment and meet the training goals and
                                                          expectations established between supervisors and
                                                          employees prior to participation in training.
                                                         Compliance Indicators
                                                          As prescribed by the Federal Workforce
                                                          Flexibility Act, the agency has evaluated each
                                                          training program or plan established, operated, or
                                                          maintained with respect to accomplishing specific
                                                          performance plans and strategic goals in performing
                                                          the agency mission; and the agency has modified such
                                                          programs or plans to accomplish goals.
                                                          As established by 5 CFR 410.601, the agency
                                                          evaluates training to determine how well it meets
                                                          short- and long-range program needs by occupations,
                                                          organizations, or other appropriate groups.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION III--Leadership and Knowledge Management      The Leadership and Knowledge Management System
 System
                                                     -----------------------------------------------------------
                                                      Leadership Succession Management
                                                     ===========================================================
                                                      Change Management
                                                     -----------------------------------------------------------
                                                      Integrity and Inspiring Employee Commitment
                                                     -----------------------------------------------------------
                                                      Continuous Learning
                                                     -----------------------------------------------------------
                                                      Knowledge Management
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Knowledge Management.......................  When the key elements of the critical success factor
                                                       Knowledge Management are effectively implemented,
                                                       agencies will realize the following results:
                                                      Effectiveness Results
                                                       The agency has developed and implemented a
                                                       knowledge management process that provides a means to
                                                       share critical knowledge across the organization.
                                                       Leadership also encourages and rewards knowledge sharing.
                                                       Information technology tools that facilitate
                                                       gathering and sharing knowledge within and outside the
                                                       agency are available to employees to improve individual
                                                       and organizational performance.
                                                      Compliance Result

[[Page 23032]]

 
                                                       As prescribed in the Chief Human Capital Officers
                                                       (CHCO) Act of 2002 (5 U.S.C. 1304), the agency has
                                                       developed and implemented a knowledge management strategy
                                                       supported by appropriate investments in training and
                                                       technology.
                                                      The following page provides key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                              KNOWLEDGE MANAGEMENT
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has a knowledge management system that:
     Captures, indexes, processes, and easily    Effectiveness Indicators
     retrieves data that may be composed of text,         A knowledge management process has been
     audio, video, and Web-based elements                 developed, documented, and systematically shared with
     Facilitates the sharing of knowledge and     employees. Training and/or orientation is provided to
     best practices throughout the agency.                the workforce. An infrastructure which facilitates
     Maintains active participation in            knowledge capture, indexing, processing, and retrieval
     communities of practice outside the agency.          is established to support knowledge sharing through
     Establishes communities of practice for      the use of the intranet, shared networks, and
     sharing key knowledge at all managerial and          communities of practice and/or best practices.
     leadership levels..                                  The agency has analyzed the use of the
                                                          knowledge-sharing process and established the utility
                                                          and usage of the process and tools.
                                                         --Knowledge sharing has been established as an
                                                          organizational value through management communications
                                                          and recognition of employees who exemplify the
                                                          practice of knowledge sharing.
                                                         --Requirements and specifications for tools support
                                                          work performed by employees.
                                                          The agency has begun codifying knowledge
                                                          through the use of the intranet, shared networks, and
                                                          communities of practice and/or best practices.
                                                         Compliance Indicator
                                                          As prescribed in the CHCO Act (5 U.S.C. 1304),
                                                          the agency has developed and implemented a knowledge
                                                          management strategy supported by appropriate
                                                          investments in training and technology.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION IV--Results-Oriented Performance Culture      The Results-Oriented Performance Culture System
 System
                                                     -----------------------------------------------------------
                                                      Communication
                                                     -----------------------------------------------------------
                                                      Performance Appraisal
                                                     -----------------------------------------------------------
                                                      Awards
                                                     -----------------------------------------------------------
                                                      Pay for Performance
                                                     -----------------------------------------------------------
                                                      Diversity Management
                                                     -----------------------------------------------------------
                                                      Labor/Management Relations
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
The Results-Oriented Performance Culture System.....  This section contains information specific to the Results-
                                                       Oriented Performance Culture system, which focuses on
                                                       having a diverse, results-oriented, high-performing
                                                       workforce, as well as a performance management system
                                                       that effectively plans, monitors, develops, rates, and
                                                       rewards employee performance.
Definition..........................................  A system that promotes a diverse, high-performing
                                                       workforce by implementing and maintaining effective
                                                       performance management systems and awards programs.
Standard............................................  The agency has a diverse, results-oriented, high-
                                                       performing workforce and a performance management system
                                                       that differentiates between high and low levels of
                                                       performance and links individual/team/unit performance to
                                                       organizational goals and desired results effectively.
Critical Success Factors............................  The Results-Oriented Performance Culture system is
                                                       comprised of the following critical success factors that
                                                       work together to create a diverse, results-oriented, high
                                                       performance workforce:
                                                       Communication: The agency has a process for
                                                       sharing information and ideas about the organization with
                                                       all employees. This vital process includes eliciting
                                                       employee feedback and involvement so that all employees
                                                       play an appropriate role in planning and executing the
                                                       mission.
                                                       Performance Appraisal: The agency has a process
                                                       under which performance is reviewed and evaluated.
                                                       Awards: The organization takes actions to
                                                       recognize and reward individual or team achievement that
                                                       contributes to meeting organizational goals or improving
                                                       the efficiency, effectiveness, and economy of the
                                                       Government. Such awards include, but are not limited to:
                                                       employee incentives which are based on predetermined
                                                       criteria, rating-based awards, or awards based on a
                                                       special act or service.
                                                       Pay for Performance: The agency uses pay-for-
                                                       performance systems, where authorized by law and
                                                       regulation, to link salary levels and adjustments to an
                                                       individual's overall performance and contribution to the
                                                       agency's mission. Employees receive base salary
                                                       adjustments within their assigned bands.
                                                       Diversity Management: The agency maintains an
                                                       environment characterized by inclusiveness of individual
                                                       differences and responsiveness to the needs of diverse
                                                       groups of employees.
                                                       Labor/Management Relations: The organization
                                                       promotes cooperation among employees, unions, and
                                                       managers. This cooperation enhances effectiveness and
                                                       efficiency, cuts down the number of employee-related
                                                       disputes, and improves working conditions, all of which
                                                       contribute to improved performance and results.

[[Page 23033]]

 
Applicable Merit System Principles..................  The following merit system principles are especially
                                                       relevant to the Results-Oriented Performance Culture
                                                       system (5 U.S.C. 2301):
                                                       All employees and applicants for employment
                                                       should receive fair and equitable treatment in all
                                                       aspects of personnel management without regard to
                                                       political affiliation, race, color, religion, national
                                                       origin, sex, marital status, age, or handicapping
                                                       condition, and with proper regard for their privacy and
                                                       constitutional rights. (5 U.S.C. 2301(b)(2))
                                                       Equal pay should be provided for work of equal
                                                       value, with appropriate consideration of both national
                                                       and local rates paid by employers in the private sector,
                                                       and appropriate incentives and recognition should be
                                                       provided for excellence in performance. (5 U.S.C.
                                                       2301(b)(3))
                                                       Employees should be retained on the basis of
                                                       adequacy of their performance, inadequate performance
                                                       should be corrected, and employees should be separated
                                                       who cannot or will not improve their performance to meet
                                                       required standards. (5 U.S.C. 2301(b)(6))
Required Outcome Metrics............................  The following are required outcome metrics for the Results-
                                                       Oriented Performance Culture system.
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
       Required Metric             Description             Purpose
------------------------------------------------------------------------
Organization Metric: SES      Relationship between  To determine the
 Performance/Organizational    SES performance       extent to which SES
 Performance Relationship as   ratings and           appraisals and
 Linked to Mission.            accomplishment of     awards are
                               the agency's          appropriately based
                               strategic goals.      on achievement of
                                                     organizational
                                                     results.
Organization Metric:          Degree of linkage     To determine whether
 Workforce Performance         between employees'    all employees have
 Appraisals Aligned to         performance           performance
 Mission, Goals, and           appraisal plans and   appraisal plans
 Outcomes.                     agency mission,       that effectively
                               goals, and outcomes.  link to the
                                                     agency's mission,
                                                     goals, and
                                                     outcomes.
Employee Perspective Metric:  Items from the        To determine the
 Questions from Annual         Annual Employee       extent to which
 Employee Survey about         Survey.               employees believe
 Performance Culture.                                their
                                                     organizational
                                                     culture promotes
                                                     improvement in
                                                     processes, products
                                                     and services, and
                                                     organizational
                                                     outcomes.
Merit System Compliance       An assessment of      To determine that
 Metric: Merit-Based           compliance with       decisions,
 Execution of the              merit system          policies,
 Performance Culture System.   principles and        processes, and
                               related laws,         practices executed
                               rules, and            under the
                               regulations           Performance Culture
                               governing the         system comply with
                               Performance Culture   the merit system
                               system.               principles and
                                                     related laws,
                                                     rules, and
                                                     regulations.
------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Suggested Metrics...................................  In addition to the required outcome metrics, the following
                                                       metrics associated with the Results-Oriented Performance
                                                       Culture system are suggested.
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
      Suggested Metric             Description             Purpose
------------------------------------------------------------------------
Performance Ratings.........  Percent of employees  To track the extent
                               achieving each        to which agencies
                               rating level used     make meaningful
                               in an agency's        distinctions among
                               performance           employees'
                               appraisal system in   performance.
                               relation to
                               organizational and
                               individual
                               performance.
Awards......................  Relationship of the   To track the extent
                               distribution of       to which agency
                               performance ratings   monetary awards
                               to awards.            reflect employee
                                                     performance.
Respect for Diversity.......  Items from Annual     To determine the
                               Employee Survey.      extent to which
                                                     employees believe
                                                     that their
                                                     organization is
                                                     respectful of and
                                                     welcoming to the
                                                     great diversity
                                                     that makes up the
                                                     Federal workforce.
Employee Grievances and       Review of formal      To determine whether
 Complaints.                   grievances and        the underlying
                               complaints.           facts of complaints
                                                     and grievances
                                                     indicate agency
                                                     mistake or wrong
                                                     doing.
------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION IV--Results-Oriented Performance Culture      The Results-Oriented Performance Culture System
 System
                                                     -----------------------------------------------------------
                                                      Communication
                                                     -----------------------------------------------------------
                                                      Performance Appraisal
                                                     -----------------------------------------------------------
                                                      Awards
                                                     -----------------------------------------------------------
                                                      Pay for Performance
                                                     -----------------------------------------------------------
                                                      Diversity Management
                                                     -----------------------------------------------------------
                                                      Labor/Management Relations
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Communication..............................  When the key elements of the critical success factor
                                                       Communication are effectively implemented, agencies will
                                                       realize the following results:

[[Page 23034]]

 
                                                      Effectiveness Results
                                                       The agency's strategic plan has been shared with
                                                       and/or is accessible to all agency employees. Employees
                                                       are knowledgeable about the agency's strategic plan and
                                                       their role in supporting the agency's mission.
                                                       Employees have a direct line of sight between
                                                       performance elements (performance expectations) and award
                                                       systems and the agency mission. These links have been
                                                       communicated to and are understood by employees, enabling
                                                       them to focus their work effort on those activities that
                                                       are most important to mission accomplishment. All
                                                       employees are held accountable for achieving results that
                                                       support the agency's strategic plan goals and objectives.
                                                      The following page provides key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                  COMMUNICATION
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has a continuous learning system that:
     Ensures that employees understand the       Effectiveness Indicators
     agency's mission, goals, and objectives and what     The agency has developed and implemented a
     employees' roles are in achieving the mission,       communication strategy to share the vision, strategic
     goals, and objectives.                               plan, and related documents (e.g., Strategic Human
                                                          Capital Plan) with all employees.
                                                          A variety of media are used to communicate the
                                                          strategic plan and related documents to all levels of
                                                          the workforce.
                                                          Surveys and/or interview data/summaries
                                                          indicate that employees are aware of the strategic
                                                          plan goals and understand how they relate to the
                                                          agency's mission and their duties.
     Elicits employee feedback and involvement   Effectiveness Indicators
     in decision-making and planning processes.           Communication up and down the organization is
                                                          effective. Documentation shows innovation and problem
                                                          solving between employees and management.
                                                          Employees are involved in the decision-making
                                                          process, fostering their support for organizational
                                                          decisions. Surveys and/or interviews indicate that
                                                          employees are satisfied with their level of
                                                          participation in the organizational decision-making
                                                          process and feel empowered to share their ideas and/or
                                                          concerns with supervisors and other management
                                                          officials.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION IV--Results-Oriented Performance Culture      The Results-Oriented Performance Culture System
 System
                                                     -----------------------------------------------------------
                                                      Communication
                                                     -----------------------------------------------------------
                                                      Performance Appraisal
                                                     -----------------------------------------------------------
                                                      Awards
                                                     -----------------------------------------------------------
                                                      Pay for Performance
                                                     -----------------------------------------------------------
                                                      Diversity Management
                                                     -----------------------------------------------------------
                                                      Labor/Management Relations
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Performance Appraisal......................  When the key elements of the critical success factor
                                                       Performance Appraisal are effectively implemented,
                                                       agencies will realize the following results:
                                                      Effectiveness Results
                                                       Employees have a direct line of sight between
                                                       performance elements (performance expectations) and
                                                       recognition systems and the agency mission. These links
                                                       have been communicated to and are understood by
                                                       employees, enabling them to focus their work effort on
                                                       those activities that are most important to mission
                                                       accomplishment. All employees are held accountable for
                                                       achieving results that support the agency's strategic
                                                       plan goals and objectives.
                                                       The agency's performance management system
                                                       differentiates between high and low levels of
                                                       performance. Agencies with a high percentage of
                                                       outstanding ratings also demonstrate a high level of
                                                       achievement of their strategic goals and objectives and/
                                                       or program accomplishments as reflected in the agency
                                                       annual performance plan.
                                                       Supervisors and managers use performance results
                                                       to offer feedback, identify developmental needs to help
                                                       improve employee performance and address instances of
                                                       poor performance.
                                                      Compliance Results
                                                       The agency has an OPM-approved performance
                                                       appraisal system(s) in place and administers the
                                                       system(s) in accordance with 5 U.S.C. 43; or other
                                                       congressionally-mandated enabling legislation.
                                                       The agency CHCO carries out workforce development
                                                       provisions of the CHCO Act of 2002 (5 U.S.C. 1402).
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


[[Page 23035]]


----------------------------------------------------------------------------------------------------------------
                                              PERFORMANCE APPRAISAL
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has a continuous learning system that:
     Aligns employee performance plans with      Effectiveness Indicators
     organizational goals.                                Work units have documented performance goals
     Focuses employees on achieving results....   and objectives that are linked to the agency strategic
     Requires employee performance plans to       plan and performance plan.
     include clear performance elements (expectations)    Performance elements (expectations) for
     with measurable standards of performance..           employees are:
                                                         --Aligned with organizational goals.
                                                         --Clear, specific, and understandable.
                                                         --Reasonable and attainable.
                                                         --Measurable, observable, or verifiable, and results
                                                          oriented.
                                                         --Communicated in a timely fashion.
                                                         --Key in fostering continual improvement in
                                                          productivity.
                                                         Compliance Indicators
                                                          Agency managers plan and communicate
                                                          performance elements (expectations) and standards that
                                                          are linked with strategic planning initiatives in
                                                          accordance with the Executive Performance and
                                                          Accountability Interim Rule (5 CFR 430 and 1330) or
                                                          applicable agency directives.
                                                          In accordance with 5 CFR 430 subparts b and c,
                                                          performance plans must:
                                                         --Be issued at the beginning of the appraisal period.
                                                         --Include at least one critical element.
                                                         --For SES, must include balanced measures of business
                                                          results, employee, and customer perspectives.
The agency has a performance appraisal system that:       Senior employee ratings (as well as
                                                          subordinate employees' expectations and ratings for
                                                          those with supervisory responsibilities) appropriately
                                                          reflect the employee's performance elements
                                                          (performance expectations), relevant program
                                                          performance measures, and any other relevant factors
                                                          in accordance with the Executive Performance and
                                                          Accountability Interim Rule (5 CFR 430 or applicable
                                                          agency directives and 1330).
                                                          As stated in 5 CFR 430 or applicable agency
                                                          directives.204, the agency has established employee
                                                          performance plans, including, but not limited to,
                                                          critical elements and performance standards.
     Makes meaningful distinctions in levels of  Effectiveness Indicators
     performance.                                         The agency performance appraisal systems for
                                                          other than senior executive and senior professional
                                                          employees provides for meaningful distinctions based
                                                          on relative performance. These systems include
                                                          multiple levels against which to appraise employees.
                                                          The rating levels identified are appropriate to the
                                                          employees covered by the system (e.g., four or five
                                                          levels for systems certified by the Office of
                                                          Personnel Management (OPM) covering Senior Executive
                                                          Service (SES) employees).
                                                          Agency performance appraisal systems for other
                                                          than senior executive and senior professional
                                                          employees provide for adequately distinguishing
                                                          between levels of performance (i.e., include multiple
                                                          performance levels against which to appraise
                                                          employees, with at least one summary rating level
                                                          above ``Fully Successful''). A review of performance
                                                          plans indicates that performance standards are clear
                                                          and understandable and are an effective tool for
                                                          distinguishing between levels of performance.
                                                          A high number of outstanding performance
                                                          ratings or large cash awards is supported by
                                                          achievement of strategic goals and objectives and/or
                                                          program goals as reflected in the agency's annual
                                                          performance report.
                                                         Compliance Indicators
                                                          Performance information is used to adjust pay
                                                          or reward, reassign, develop, and remove senior
                                                          executives or make other personnel decisions in
                                                          accordance with 5 CFR 430.304; and for all other
                                                          employees in accordance with 5 CFR 430 or applicable
                                                          agency directives.
                                                          To satisfy the requirements of the Executive
                                                          Performance and Accountability Interim Rule (5 CFR 430
                                                          and 1330 or applicable agency directives), the
                                                          agency's certified performance appraisal system for
                                                          senior employees provides for performance
                                                          differentiation so that its annual ratings, pay
                                                          adjustments, and awards result in meaningful
                                                          distinctions based on relative performance.

[[Page 23036]]

 
     Provides a process for dealing with poor    Effectiveness Indicators
     performance.                                         Policies and procedures, including delegation
                                                          of authority, for addressing poor performance have
                                                          been developed and communicated to supervisors.
                                                          Analysis is performed to identify the cause of
                                                          any organizational or individual performance
                                                          shortfalls, and appropriate performance improvement
                                                          strategies are identified and implemented.
                                                         Compliance Indicators
     Involves employees in the development of    Effectiveness Indicator
     their performance plans.                             The agency performance appraisal system
     Requires that employees receive feedback     encourages employee participation in establishing
     on their performance..                               performance plans.
                                                         Compliance Indicators
                                                          Employees are covered by recorded performance
                                                          plans, which are communicated to employees at the
                                                          beginning of each appraisal period. Plans include
                                                          critical elements and performance standards, in
                                                          accordance with 5 CFR 430 or applicable agency
                                                          directives.
                                                          Employee performance is monitored by the
                                                          supervisor and discussed with the employee on an
                                                          ongoing basis during the designated appraisal period,
                                                          with one or more progress reviews conducted and
                                                          documented, in accordance with 5 CFR 430 or applicable
                                                          agency directives.
                                                          Employees are given ratings of record at the
                                                          end of each appraisal period and/or at other
                                                          appropriate times during the appraisal period in
                                                          accordance with 5 CFR 430 or applicable agency
                                                          directives.
                                                          The agency encourages employee participation
                                                          in establishing performance plans as stated in 5 CFR
                                                          430.206 or applicable agency directives.
     Provides for training to executives,        Effectiveness Indicators
     managers, and supervisors to ensure they have the    Performance elements (performance
     knowledge, skills, and abilities to effectively      expectations) for senior executives, managers, and
     manage performance.                                  supervisors are:
     Holds executives, managers, and             --Aligned with organizational goals.
     supervisors accountable in their performance plans  --Clear, specific, and understandable.
     for the rigorous appraisal of their subordinates..  --Reasonable and attainable.
                                                         --Measurable, observable, or verifiable, and results
                                                          oriented.
                                                         --Balanced between expected results and other
                                                          indicators such as leadership behaviors and employee
                                                          and stakeholder feedback.
                                                         --Communicated in a timely fashion.
                                                         --Key in fostering continual improvement in
                                                          productivity.
                                                          All supervisors, managers, and executives
                                                          receive training on performance management and
                                                          coaching/feedback techniques.
                                                          Sources of data (e.g., Federal Human Capital
                                                          Survey, upward feedback, multi-rater assessment)
                                                          indicate that supervisors, managers, and executives
                                                          demonstrate effective performance management and
                                                          coaching/feedback skills.
                                                          Reviews of performance plans for all levels of
                                                          the agency indicate that supervisors, managers, and
                                                          executives are held accountable for the performance
                                                          management of their subordinates.
                                                         Compliance Indicators
                                                          The agency has established and implemented a
                                                          specific training program for managers in accordance
                                                          with the Federal Workforce Flexibility Act that
                                                          provides training on actions, options, and strategies
                                                          a manager may use in:
                                                         --Communicating with employees whose performance is
                                                          unacceptable.
                                                         --Mentoring employees and improving employee
                                                          performance and productivity.

[[Page 23037]]

 
     Establishes a process for periodically      Effectiveness Indicator
     evaluating the effectiveness of the appraisal        The agency regularly tracks performance and
     system so that the agency can use the evaluation     reports results.
     data to improve the system.                          Survey results and/or interviews indicate that
                                                          employees understand their performance elements
                                                          (performance expectations), consider them to be fair,
                                                          and understand how their efforts contribute to mission
                                                          accomplishment.
                                                          Workforce survey results indicate that
                                                          employees perceive a linkage between high performance
                                                          and recognition and awards. Employees also believe
                                                          that creativity and innovation are rewarded and that
                                                          their own performance evaluations properly reflect
                                                          their level of performance.
                                                          Statistical data for performance ratings and
                                                          awards, in the context of an empirical review of the
                                                          performance decision-making process, show appropriate
                                                          distribution and meaningful distinctions.
                                                          Statistical data for performance ratings and
                                                          awards show appropriate distribution and meaningful
                                                          distinctions (e.g., top performers are rewarded).
                                                         Compliance Indicator
                                                          The agency's performance appraisal system(s)
                                                          and program(s) are evaluated in accordance with 5 CFR
                                                          430 or applicable agency directives.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION IV--Results-Oriented Performance Culture      The Results-Oriented Performance Culture System
 System
                                                     -----------------------------------------------------------
                                                      Communication
                                                     -----------------------------------------------------------
                                                      Performance Appraisal
                                                     -----------------------------------------------------------
                                                      Awards
                                                     -----------------------------------------------------------
                                                      Pay for Performance
                                                     -----------------------------------------------------------
                                                      Diversity Management
                                                     -----------------------------------------------------------
                                                      Labor/Management Relations
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Awards.....................................  When the key elements of the critical success factor
                                                       Awards are effectively implemented, agencies will realize
                                                       the following results:
                                                      Effectiveness Results
                                                       Employees have a direct line of sight between
                                                       performance elements (performance expectations) and
                                                       recognition systems and the agency mission. These links
                                                       have been communicated to and are understood by
                                                       employees, enabling them to focus their work effort on
                                                       those activities that are most important to mission
                                                       accomplishment. All employees are held accountable for
                                                       achieving results that support the agency's strategic
                                                       plan goals and objectives.
                                                       The agency has created a ``reward environment,''
                                                       beyond compensation and benefits, that contributes to
                                                       attracting, retaining, and motivating employees.
                                                      Compliance Result
                                                       The agency has developed one or more awards
                                                       programs for its employees that obligates funds, and
                                                       documents awards justifications in accordance with 5 CFR
                                                       451.
                                                      The following page provides key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                     AWARDS
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has an awards system that:

[[Page 23038]]

 
     Is aligned with organizational goals and    Effectiveness Indicators
     values.                                              The agency has designed, communicated, and
     Has clear criteria for awards that are       implemented an awards program that is aligned with
     communicated effectively so that employees           organizational goals, based on clear criteria, and
     understand the purpose of the awards.                tailored to the interests and priorities of the
     Includes a variety of types of awards        agency's workforce.
     (e.g., formal, monetary, nonmonetary, time-off) so   The agency uses a variety of monetary and
     that supervisors have a wide range of tools          nonmonetary awards (e.g., certificates, recognition in
     available to recognize performance.                  agency publications, award ceremonies).
     Provides incentives for performing at an     Executives, managers, and supervisors receive
     exemplary level..                                    training on awards that are available and how to use
     Recognizes top performers appropriately...   them to attract, retain, and motivate employees.
     Establishes a process for periodically       Surveys and/or interviews indicate that
     evaluating the effectiveness of the awards system    employees feel valued and appropriately recognized for
     so that the agency can use the evaluation data to    performance.
     improve the system..                                Compliance Indicator
                                                          The agency communicates with employees and
                                                          supervisors about awards programs, evaluates its
                                                          programs, documents awards appropriately, and gives
                                                          due weight to awards in qualifying and selecting
                                                          employees for promotion promoting employees in
                                                          accordance with 5 U.S.C. 3362.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION IV--Results-Oriented Performance Culture      The Results-Oriented Performance Culture System
 System
                                                     -----------------------------------------------------------
                                                      Communication
                                                     -----------------------------------------------------------
                                                      Performance Appraisal
                                                     -----------------------------------------------------------
                                                      Awards
                                                     -----------------------------------------------------------
                                                      Pay for Performance
                                                     -----------------------------------------------------------
                                                      Diversity Management
                                                     -----------------------------------------------------------
                                                      Labor/Management Relations
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Pay-for-Performance........................  When the key elements of the critical success factor Pay-
                                                       for-Performance are effectively implemented, agencies
                                                       will realize the following results:
                                                      Effectiveness Results
                                                       The pay-for-performance system, where authorized
                                                       by law and regulation, is results-driven, producing a
                                                       distribution of pay adjustments and bonuses based on
                                                       individual contribution, organizational performance, and/
                                                       or team performance.
                                                       The pay-for-performance system, where authorized
                                                       by law and regulation, ensures employee and supervisory
                                                       accountability with respect to individual performance and
                                                       organizational results.
                                                       Employees' pay is linked to their performance
                                                       ratings.
                                                       Supervisors and managers make meaningful
                                                       distinctions in performance ratings.
                                                      Compliance Result
                                                       Pay adjustments, cash awards, and levels of pay
                                                       based on the results of the appraisal process accurately
                                                       reflect and recognize individual performance and/or
                                                       contribution to the agency's performance in accordance
                                                       with applicable agency directives.
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                               PAY FOR PERFORMANCE
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
When authorized, the agency has a pay-for-performance
 system that:

[[Page 23039]]

 
     Makes pay distinctions based on             Effectiveness Indicators
     performance.                                         An understandable pay pool structure (e.g.,
     Includes a transparent process for making    roles and responsibilities) and process for making
     pay adjustments..                                    timely pay determinations have been communicated
     Requires clear and frequent communications   across the agency using a variety of methods (e.g.,
     about the pay system and how it operates..           Web sites, handbooks, policies, announcements).
                                                          Managers, supervisors, and employees are
                                                          oriented and/or trained at the beginning of the
                                                          performance cycle on the relationship between their
                                                          performance and salary adjustments and awards at the
                                                          end of the cycle.
                                                          Data on pay pool determinations/discussions
                                                          indicate:
                                                         --The budget is effectively managed.
                                                         --Top performers are getting the highest pay increases
                                                          and/or awards.
                                                         --Employees perceive the process to be fair and
                                                          credible.
                                                         --Pay adjustments correlate with performance ratings.
                                                         Compliance Indicators
                                                          For senior employees, individual pay rates and
                                                          pay adjustments reflect meaningful distinctions based
                                                          on relative contribution to agency performance in
                                                          accordance with the Executive Performance and
                                                          Accountability Interim Rule (5 CFR 430 or applicable
                                                          agency directives and 1330).
When authorized, the agency has a pay-for-performance     Pay-for-performance systems, authorized by OPM
 system that:                                             as part of Demonstration Projects, are evaluated
                                                          periodically to determine compliance with the Project
                                                          Plan in accordance with 5 CFR 470.317.
                                                          Pay-for-performance systems authorized by
                                                          Congress are in compliance with their enabling
                                                          legislation, regulations, and operating guidance
                                                          (e.g., DHS HRM system in chapter 97 of title 5, U.S.
                                                          Code, part 9701 of 5 CFR and the provisions of the
                                                          National Security Personnel System, chapter 99 of
                                                          title 5, U.S. Code and part 9901 of 5 CFR).
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION IV--Results-Oriented Performance Culture      The Results-Oriented Performance Culture System
 System
                                                     -----------------------------------------------------------
                                                      Communication
                                                     -----------------------------------------------------------
                                                      Performance Appraisal
                                                     -----------------------------------------------------------
                                                      Awards
                                                     -----------------------------------------------------------
                                                      Pay for Performance
                                                     -----------------------------------------------------------
                                                      Diversity Management
                                                     -----------------------------------------------------------
                                                      Labor/Management Relations
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Diversity Management.......................  When the key elements of the critical success factor
                                                       Diversity Management are effectively implemented,
                                                       agencies will realize the following results:
                                                      Effectiveness Results
                                                       The agency has implemented a diversity management
                                                       program and has shown positive results in creating a
                                                       diverse workforce.
                                                       The agency is responsive to the needs of diverse
                                                       groups, resulting in a positive work environment that is
                                                       conducive to all employees achieving their potential
                                                       without fear or abuse.
                                                      Compliance Result
                                                       The agency ensures equal opportunities for
                                                       employees without discrimination as prescribed in 5
                                                       U.S.C. 7201.
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                              DIVERSITY MANAGEMENT
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has a diversity management system that:
     Tracks and analyzes workforce diversity     Effectiveness Indicators
     trends                                               The agency's diversity program intent and
     Develops and implements diversity outreach   processes are communicated to all employees.
     plans as part of the agency's overall outreach
     efforts.
                                                          Surveys and/or interviews show that the
                                                          workforce is aware of, and generally supports,
                                                          diversity program efforts.

[[Page 23040]]

 
                                                          The agency develops and implements diversity
                                                          programs to improve diversity within the agency
                                                          including:
                                                         --A recruitment strategy to reach diverse populations
                                                          at colleges/universities, minority-focused
                                                          professional organizations, and other organizations
                                                          representing women, veterans, people with
                                                          disabilities, and other groups, as part of the
                                                          agency's overall outreach strategy.
                                                         --Encouragement of the participation of diverse groups
                                                          in occupation-focused and leadership training and
                                                          development programs.
                                                         --Family-friendly policies relating to work schedules,
                                                          telework, and other workplace flexibilities.
                                                          The agency's diversity program is inclusive of
                                                          all groups and is based on analysis of representation
                                                          of various groups including people with disabilities,
                                                          various minority groups, and women.
                                                          The diversity program is actively endorsed and
                                                          supported by agency senior leadership through policy,
                                                          budget allocation, and personal endorsements.
                                                          The agency supports forums and activities for
                                                          recognized interest groups to provide ways to
                                                          communicate with the workforce about the importance of
                                                          diversity.
                                                          Managers, supervisors, and employees receive
                                                          training from an agency-developed, diversity-related
                                                          training curriculum.
                                                          The respect for diversity index score from
                                                          OPM's Federal Human Capital Survey indicates employees
                                                          perceive that their organization respects and welcomes
                                                          the diversity that makes up the Federal workforce.
                                                          Data on human resources program and system
                                                          decisions/actions (e.g., complaints, personnel actions
                                                          such as selections, promotions, and disciplinary
                                                          actions) are analyzed in the context of empirical
                                                          information about the agency's employment practices,
                                                          to verify that discrimination is not occurring.
                                                          The agency provides resources in accessible
                                                          formats.
                                                         Compliance Indicators
                                                          The Federal Equal Opportunity Recruitment
                                                          Program (FEORP) [5 CFR 720.205], the Disabled Veterans
                                                          Affirmative Action Program (DVAAP) [5 CFR 720.304],
                                                          and other outreach programs are implemented in
                                                          accordance with 5 U.S.C. 7201 and the following
                                                          Federal Equal Employment Opportunity (EEO) laws:
                                                         --Title VII of the Civil Rights Act of 1964 (Title VII)
                                                         --Equal Pay Act of 1963 (EPA)
                                                         --Age Discrimination in Employment Act of 1967 (ADEA)
                                                         --Title I and Title V of the Americans with
                                                          Disabilities Act of 1990 (ADA)
                                                         --Sections 501 and 505 of the Rehabilitation Act of
                                                          1973
                                                         --Civil Rights Act of 1991.
                                                         [Note: The Equal Employment Opportunity Commission is
                                                          the jurisdictional authority for the EEO laws listed
                                                          immediately above, not OPM. These legal citations are
                                                          listed for human capital practitioners' reference
                                                          because agencies are subject to them.]
                                                          The agency has published up-to-date policies
                                                          indicating zero tolerance for sexual harassment and
                                                          discrimination in the workplace in accordance with
                                                          EEOC guidelines, including 29 CFR 1604. [Note: This
                                                          indicator is also under the jurisdiction of the EEOC.]
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION IV--Results-Oriented Performance Culture      The Results-Oriented Performance Culture System
 System
                                                     -----------------------------------------------------------
                                                      Communication
                                                     -----------------------------------------------------------
                                                      Performance Appraisal
                                                     -----------------------------------------------------------
                                                      Awards
                                                     -----------------------------------------------------------
                                                      Pay for Performance
                                                     -----------------------------------------------------------
                                                      Diversity Management
                                                     -----------------------------------------------------------
                                                      Labor/Management Relations
----------------------------------------------------------------------------------------------------------------


[[Page 23041]]


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Labor/Management Relations.................  When the key elements of the critical success factor Labor/
                                                       Management Relations are effectively implemented,
                                                       agencies will realize the following results:
                                                      Effectiveness Result
                                                       Managers effectively administer contractual and
                                                       statutory provisions to accomplish agency goals;
                                                       workplace conflicts are resolved fairly, promptly, and
                                                       effectively; and managers, union officials, and employees
                                                       work together to accomplish the agency's mission through
                                                       effective communication and problem solving.
                                                      Compliance Result
                                                       The agency recognizes the right of employees to
                                                       organize, bargain collectively, and participate through
                                                       labor organizations in accordance with chapter 71 of
                                                       title 5, U.S. Code.
                                                      The following page provides key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                           LABOR/MANAGEMENT RELATIONS
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has a labor/management relations system
 that:
     Provides a process that encourages labor    Effectiveness Indicators
     and management to jointly develop successful plans   Data on complaints, grievances, and unfair
     to accomplish organizational goals and to develop    labor practices are gathered, analyzed, and acted upon
     effective solutions to workplace challenges.         as appropriate. Data indicate that problems are
     Sets the stage for effectively working       usually resolved at the lowest practicable level and
     through human capital issues.                        that management is complying with contractual and
     Ensures management is aware of and           statutory requirements.
     properly applies collective bargaining agreements    Management works to resolve conflicts promptly
     and satisfies statutory labor-management relations   and in a manner that enhances agency performance.
     obligations.                                         The agency implements an alternative dispute
                                                          resolution program to resolve employee/labor relations
                                                          issues. The program achieves documented results in
                                                          resolving problem situations.
                                                         Compliance Indicator
                                                          Recognized labor organizations are afforded
                                                          the rights established in 5 U.S.C. 7101 or other
                                                          congressionally-mandated enabling legislation.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION V--Talent Management System                   The Talent Management System
                                                     -----------------------------------------------------------
                                                      Recruitment
                                                     -----------------------------------------------------------
                                                      Retention
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
The Talent Management System........................  This section contains information specific to the Talent
                                                       Management system, which focuses on agencies having
                                                       quality people with the appropriate competencies in
                                                       mission-critical activities.
Definition..........................................  A system that addresses competency gaps, particularly in
                                                       mission-critical occupations, by implementing and
                                                       maintaining programs to attract, acquire, develop,
                                                       promote, and retain quality talent.
Standard............................................  The agency has closed skills, knowledge, and competency
                                                       gaps/deficiencies in mission-critical occupations, and
                                                       has made meaningful progress toward closing skills,
                                                       knowledge, and competency gaps/deficiencies in all
                                                       occupations used in the agency.
Critical Success Factors............................  The Talent Management system is comprised of two critical
                                                       success factors that work together to ensure that
                                                       agencies have people with the right skills, in the right
                                                       places, at the right times. Addressing the critical
                                                       success factors helps eliminate gaps and deficiencies in
                                                       the skills, knowledge, and competencies of employees of
                                                       mission-critical occupations in the current and future
                                                       workforce. The two success factors usually work together.
                                                       Recruitment: The workforce plan drives the
                                                       aggressive and strategic recruitment of diverse and
                                                       qualified candidates for the agency's workforce.
                                                       Retention: Leaders, managers, and supervisors
                                                       create and sustain effective working relationships with
                                                       employees. The workplace is characterized by:
                                                      --A motivated and skilled workforce.
                                                      --Attractive and flexible working arrangements.
                                                      --Compensation packages and other programs used to hire
                                                       and retain employees who possess mission-critical skills,
                                                       knowledge, and competencies.
Applicable Merit System Principles..................  The following merit system principles are especially
                                                       relevant to the Talent Management system (5 U.S.C. 2301):
                                                       Recruitment should be from qualified individuals
                                                       from appropriate sources in an endeavor to achieve a work
                                                       force from all segments of society, and selection and
                                                       advancement should be determined solely on the basis of
                                                       relative ability, knowledge and skills, after fair and
                                                       open competition which assures that all receive equal
                                                       opportunity. (5 U.S.C. 2301(b)(1))
                                                       All employees and applicants for employment
                                                       should receive fair and equitable treatment in all
                                                       aspects of personnel management without regard to
                                                       political affiliation, race, color, religion, national
                                                       origin, sex, marital status, age, or handicapping
                                                       condition, and with proper regard for their privacy and
                                                       constitutional rights. (5 U.S.C. 2301(b)(2))
Required Outcome Metrics............................  The following are required outcome metrics for the Talent
                                                       Management system.
----------------------------------------------------------------------------------------------------------------


[[Page 23042]]


------------------------------------------------------------------------
       Required Metric             Description             Purpose
------------------------------------------------------------------------
Organization Metric:          Difference between    To determine how the
 Competency Gaps Closed for    competencies needed   agency should
 Mission-Critical              and competencies      target its
 Occupations.                  possessed by          recruitment,
                               employees in          retention, and
                               mission-critical      development efforts
                               occupations.          to bring the
                                                     competencies of its
                                                     workforce into
                                                     alignment with the
                                                     agency's current
                                                     and future needs.
Employee Perspective Metric:  Items from Annual     To determine the
 Questions from Annual         Employee Survey.      extent to which
 Employee Survey about                               employees think the
 Organizational Capacity.                            organization has
                                                     talent necessary to
                                                     achieve
                                                     organizational
                                                     goals.
Employee Perspective Metric:  Items from Annual     To determine the
 Questions from Annual         Employee Survey.      extent to which
 Employee Survey about                               employees are
 Employee Satisfaction.                              satisfied with
                                                     their jobs and
                                                     various aspects
                                                     thereof.
Merit System Compliance       An assessment of      To determine that
 Metric: Merit-Based           compliance with       decisions,
 Execution of the Talent       merit system          policies,
 Management System.            principles and        processes, and
                               related laws,         practices executed
                               rules, and            under the Talent
                               regulations           Management system
                               governing the         comply with the
                               Talent Management     merit system
                               system.               principles and
                                                     related laws,
                                                     rules, and
                                                     regulations.
------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Suggested Metrics...................................  In addition to the required outcome metrics, the following
                                                       metrics associated with the Talent Management system are
                                                       suggested.
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
      Suggested Metric             Description             Purpose
------------------------------------------------------------------------
Turnover of Employees in      Percent of turnover.  To track turnover of
 Mission-Critical                                    Federal employees
 Occupations.                                        in mission-critical
                                                     occupations by
                                                     reason for leaving.
Turnover of Employees in      Percent of turnover   To determine how
 Mission-Critical              among those serving   many new Federal
 Occupations during            in their              employees in
 Probationary Period.          probationary period.  mission-critical
                                                     occupations leave
                                                     Federal service
                                                     during their
                                                     probationary period
                                                     of employment and
                                                     to determine
                                                     whether their exit
                                                     was voluntary or
                                                     involuntary.
Time To Hire................  Average time from     To determine the
                               date vacancy closes   efficiency of a
                               to date offer is      critical phase of
                               extended (expressed   the Federal hiring
                               in working days).     process.
Management Satisfaction with  Management responses  To determine if
 the Hiring Process.           to items from         hiring managers
                               Annual Employee       believe the
                               Survey.               recruitment and
                                                     selection process
                                                     achieves
                                                     recruitment and
                                                     retention goals.
Applicant Satisfaction with   A questionnaire that  To determine if
 the Hiring Process.           is published on       applicants have a
                               OPM's USAJobs Web     favorable
                               site.                 impression of the
                                                     recruitment and
                                                     selection process.
------------------------------------------------------------------------


 
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
SECTION V--Talent Management System                   The Talent Management System
                                                     -----------------------------------------------------------
                                                      Recruitment
                                                     -----------------------------------------------------------
                                                      Retention
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Results: Recruitment................................  When the key elements of the critical success factor
                                                       Recruitment are effectively implemented, agencies will
                                                       realize the following results:
                                                      Effectiveness Results
                                                       Workforce competency gaps are closed through the
                                                       use of effective recruitment and retention strategies,
                                                       creating a workforce that is capable of excellent
                                                       performance in the service of the American people.
                                                       Senior leaders and managers are involved in
                                                       strategic recruitment and retention initiatives, which
                                                       ensures that the necessary organizational focus and
                                                       resources are allocated to achieve recruitment and
                                                       retention goals.
                                                       Recruitment strategies are appropriately
                                                       aggressive and multi-faceted to ensure a sufficient flow
                                                       of quality applicants to meet staffing needs identified
                                                       in the workforce plan, positioning the agency for
                                                       successful program accomplishment.
                                                       Flexible compensation strategies are used as
                                                       needed to attract and retain quality employees who
                                                       possess mission-critical competencies.
                                                       Quality of work/life programs are provided and
                                                       obstacles to recruitment and retention of a quality
                                                       workforce have been addressed, positioning the agency to
                                                       be successful in acquiring and retaining the talent
                                                       needed for program goals and objectives.
                                                      Compliance Result
                                                       Recruitment, hiring, and merit promotion
                                                       processes adhere to the merit system principles in 5
                                                       U.S.C. 2301 and follow other pertinent legal and
                                                       regulatory guidance (including but not limited to 5
                                                       U.S.C. 3101, 3102, 3301, 3302, 3308-3318, 3319, 3502,
                                                       3503; as well as 5 CFR 315, 316, 317, 330, 332, 335, 337,
                                                       338, 550; and other congressionally-mandated enabling
                                                       legislation).
                                                      The Recruitment and Retention systems work together to
                                                       produce many of these results.

[[Page 23043]]

 
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                   RECRUITMENT
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
 The agency has a recruitment system that:
     Identifies the challenges involved in       Effectiveness Indicators
     attracting a high-quality workforce.                 The goals of recruiting for mission-critical
     Establishes competency gap reduction goals   occupations and competency gap reduction are
     and develops action plans to address current and     established and documented in the agency's strategic
     future competency gaps..                             planning (or strategic human capital planning) process
     Uses appropriate hiring flexibilities and    and tracked through the agency's accountability
     tools..                                              system.
     Attracts and hires applicants who possess    Recruitment strategies are created to maintain
     needed mission-critical competencies..               mission-critical competencies at the desired level
                                                          using business forecasting and workforce analysis
                                                          results.
                                                          Statistical data are analyzed related to the
                                                          relative success of various types of appointments and
                                                          recruitment flexibilities.
                                                          The agency conducts ``lessons learned'' or
                                                          other evaluation activities and uses the findings to
                                                          make improvements.
                                                          New hire follow-up (e.g., supervisory
                                                          assessment of the employee's productivity, adjustment
                                                          to the job, and adjustment to the work environment) is
                                                          conducted.
                                                         Compliance Indicators
                                                          The agency closes skill gaps in mission-
                                                          critical occupations in accordance with the Chief
                                                          Human Capital Officers Act (CHCO Act) (5 U.S.C. 1304).
                                                          When OPM delegates examining or other
                                                          personnel management authorities to the agency under
                                                          the auspices of 5 U.S.C. 1104, the agency complies
                                                          with the standards established by OPM and with merit
                                                          system principles.
The agency has a recruitment system that:
     Involves senior leaders and managers in     Effectiveness Indicators
     recruitment planning and the implementation of       Adequate staff with the requisite competencies
     strategic recruitment initiatives to attract         are allocated to the recruitment and hiring process
     talent.                                              commensurate with workload.
                                                          Senior leaders and managers manage resources
                                                          and participate in job analysis and in the planning,
                                                          communication, and evaluation of recruitment
                                                          strategies. Information is provided to senior managers
                                                          on a regular basis including:
                                                         --Actual versus budgeted staffing levels.
                                                         --Recruitment effectiveness based on an assessment of
                                                          the quality of hires, timeliness in filling positions
                                                          (e.g., use of 45-day model, 30-day model for Senior
                                                          Executive Service (SES), or similar hiring model), and
                                                          diversity statistics.
                                                         --Turnover rate for mission-critical occupations by
                                                          grade/pay band and location.
                                                          Senior leaders and managers assist human
                                                          resources (HR) staff in implementing strategic
                                                          recruitment initiatives, including participation in
                                                          such activities as recruitment fairs and outreach
                                                          programs and visits to schools.
                                                          Training classes, intranet, and other forms of
                                                          guidance provide information to senior leaders and
                                                          managers on available staffing options.
                                                         Compliance Indicator
                                                          As prescribed by the CHCO Act (5 U.S.C. 1304),
                                                          the agency holds managers accountable for effective
                                                          and efficient human resources management that supports
                                                          the mission in accordance with merit system
                                                          principles.

[[Page 23044]]

 
     Utilizes strategies that are both           Effectiveness Indicators
     aggressive and multi-faceted when competing for      The agency's recruitment strategies include
     desired talent.                                      assessment of sources, such as professional
                                                          organizations, colleges/universities, veterans'
                                                          organizations, state and private disability and
                                                          rehabilitation offices, and community groups that are
                                                          likely to yield high quality and diverse candidates.
                                                          Recruitment strategies have been developed
                                                          based on an analysis of the primary sources for
                                                          qualified applicants.
                                                          Ongoing relationships are established and
                                                          maintained with recruitment sources such as:
                                                         --Colleges and universities, outplacement
                                                          organizations, professional associations.
                                                         --Veterans' organizations and special programs for
                                                          veterans (e.g., Veterans Invitational Program (VIP)).
                                                         --Recuritment fairs (e.g., fairs sponsored by the
                                                          Office of Personnel Management (OPM or special
                                                          interest groups).
                                                         --Special programs/organizations that support people
                                                          with disabilities (e.g., Department of Defense (DoD)
                                                          Computer/Electronic Accommodation Program (CAP), deaf
                                                          and hard of hearing in Government, rehabilitation
                                                          institutions, vocational rehabilitation).
                                                         --Recruitment flexibilities and appointing authorities
                                                          authorized by OPM (e.g., direct hire, category rating,
                                                          language expertise) are publicized widely throughout
                                                          the agency and are used to enhance recruitment scope
                                                          and timeliness.
                                                          Additional recruitment flexibilities are
                                                          requested if needed and are justified by a human
                                                          capital business case. Necessary funding is provided
                                                          to support implementation of the flexibilities.
                                                          Managers are able to make valid selections
                                                          from lists of high-quality candidates.
     Reviews recruitment, hiring, and merit      Effectiveness Indicators
     promotion programs to ensure fair hiring and         Recruitment activities are evaluated to assess
     assess overall results.                              factors such as:
                                                         --Return on investment.
                                                         --Cost effectiveness of various media and other
                                                          recruitment sources in generating qualified and
                                                          available applicants.
                                                         --Quality and quantity of applicants.
                                                         --Timely notification of applicants throughout the
                                                          selection process regarding the status of their
                                                          resum[eacute]/application.
                                                         --Timeliness (e.g., use of 45-day model, 30-day model
                                                          for SES, or similar hiring models).
                                                         --Applicant and manager satisfaction with the
                                                          application process.
                                                         --Reasons for declination of job offers.
                                                         --Recruitment strategies and flexibilities that are
                                                          most effective in meeting agency needs.
                                                         --Reasons (e.g., poor fit between the employee and job
                                                          requirements) for resignations and separations within
                                                          the first year after appointment.
                                                          Managers and HR staff are trained on the merit
                                                          system principles, legal requirements, and other
                                                          policies governing Federal employment.
                                                          Audit and evaluation results (e.g., OPM,
                                                          Government Accountability Office (GAO), and Inspector
                                                          General (IG)) are used to drive process changes when
                                                          systemic problems are identified.
                                                         Compliance Indicators
                                                          The agency examines (when authorized by OPM
                                                          delegation), appoints, promotes, and reassigns
                                                          employees consistent with merit system principles (5
                                                          U.S.C. 2301) and other pertinent laws, rules, and
                                                          regulations (e.g., the Uniform Guidelines in 5 CFR
                                                          300.103).
                                                          The agency's annual self-audit of delegated
                                                          examining operations demonstrates that operations are
                                                          accomplished in accordance with OPM procedural
                                                          requirements as delegated under the authority of 5
                                                          U.S.C. 1104.

[[Page 23045]]

 
     Ensures that application and decision-      Effectiveness Indicators
     making processes are not unduly burdensome or time   The agency establishes an ``applicant
     consuming.                                           friendly'' process for applying for jobs that
                                                          includes:
                                                         --Vacancy announcements, application instructions,
                                                          recruitment brochures, and marketing products that
                                                          target the desired applicant pool(s) and are clearly
                                                          written in plain language, attractive, and
                                                          informative; are easily accessible; and highlight
                                                          benefits (e.g., work/life flexibilities, Federal
                                                          Employees Health Benefits, Employee Assistance
                                                          Program, Flexible Spending Accounts, defined-benefit
                                                          pension plan, Thrift Savings Plan, life insurance, and
                                                          long-term care insurance).
                                                         --Regular communication about the status of an
                                                          individual's resume/application as well as answers to
                                                          applicant questions (as evidenced by correspondence
                                                          records).
                                                         --A timely decision-making process.
                                                          Data from applicant surveys and entrance
                                                          interviews reflect a positive experience for
                                                          applicants.
                                                          Length of time to hire is consistent with
                                                          recommended hiring models.
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SECTION V--Talent Management System                   The Talent Management System
                                                     -----------------------------------------------------------
                                                      Recruitment
                                                     -----------------------------------------------------------
                                                      Retention
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Results: Retention..................................  When the key elements of the critical success factor
                                                       Retention are effectively implemented, agencies will
                                                       realize the following results:
                                                      Effectiveness Results
                                                       Workforce competency gaps are closed through the
                                                       use of effective recruitment and retention strategies,
                                                       creating a workforce that is capable of excellent
                                                       performance in the service of the American people.
                                                       Senior leaders and managers are involved in
                                                       strategic recruitment and retention initiatives, which
                                                       ensures that the necessary organizational focus and
                                                       resources are allocated to achieve recruitment and
                                                       retention goals.
                                                       Flexible compensation strategies are used as
                                                       needed to attract and retain quality employees who
                                                       possess mission-critical competencies.
                                                       Quality of work/life programs are provided and
                                                       obstacles to recruitment and retention of a quality
                                                       workforce have been addressed, positioning the agency to
                                                       be successful in acquiring and retaining the talent
                                                       needed for program goals and objectives.
                                                      Compliance Result
                                                       Retention policies and practices adhere to merit
                                                       system principles set forth in 5 U.S.C. 2301 and other
                                                       Federal laws, rules, and regulations (e.g., 5 U.S.C. 5301
                                                       and 5706; the Federal Workforce Flexibility Act of 2004;
                                                       5 CFR 531, 550, and 575; etc.).
                                                      The Recruitment and Retention systems work together to
                                                       produce many of these results.
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this critical success factor.
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                                                    RETENTION
-----------------------------------------------------------------------------------------------------------------
                      Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
The agency has a retention system that:
     Utilizes flexible compensation strategies   Effectiveness Indicators
     to retain employees who possess mission-critical     The agency's strategic, performance, and/or
     competencies.                                        strategic human capital plans and policies promote
                                                          appropriate use of compensation flexibilities (e.g.,
                                                          recruitment bonuses, relocation bonuses, retention
                                                          allowances) to attract and retain high-quality
                                                          employees who possess mission-critical competencies.
                                                          The agency also makes a successful case to support
                                                          funding.
                                                          Written policies and procedures describe
                                                          guidelines for use of compensation flexibilities in
                                                          meeting the agency's need for highly qualified
                                                          employees consistent with legal requirements governing
                                                          the use of the flexibilities. Managers have been
                                                          informed about and use available compensation
                                                          flexibilities where justified.
                                                          Incentive and recognition programs are
                                                          established, budgeted, and implemented to focus on
                                                          retention of high performing employees with mission-
                                                          critical competencies.
                                                          Use of compensation flexibilities and awards
                                                          is analyzed to determine that there is a discernable
                                                          relationship between the use of the flexibilities and
                                                          successful recruitment and retention of high-quality
                                                          employees in mission-critical occupations. The
                                                          analysis includes consideration of retention and exit
                                                          interview information.

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                                                         Compliance Indicator
                                                          When OPM delegates examining or other
                                                          personnel management authorities to the agency under
                                                          the auspices of 5 U.S.C. 1104, the agency complies
                                                          with the standards established by OPM and merit system
                                                          principles.
     Develops short- and long-term strategies    Effectiveness Indicators
     and targeted investments in current employees to     Strategies are developed and implemented for
     eliminate competency gaps in mission-critical        reducing competency gaps through training,
     occupations.                                         development, or alternative sources (e.g., intern
     Trains the current workforce in mission-     program, contractor outsourcing).
     critical competencies that are needed by the         Staffing, training, and performance data
     agency.                                              indicate success in closing competency gaps.
     Documents planned and completed retention   Effectiveness Indicators
     activities, including requested budget funding,      Retention trends are tracked and analyzed by
     staff allocation, and management accountability.     the appropriate management level.
                                                          Exit interviews are conducted and data/
                                                          information are analyzed at the appropriate level to
                                                          allow supervisors and managers to address retention.
                                                          Senior leaders and managers manage resources
                                                          and participate in the planning, communication, and
                                                          evaluation of retention strategies. Senior leaders and
                                                          managers and first-line supervisors implement
                                                          strategic retention initiatives in partnership with
                                                          HR.
                                                          Appropriate metrics, as defined by OPM
                                                          guidance or developed by the agency, are reported to
                                                          senior managers and human resource executives to
                                                          assess the outcomes from retention strategies.
                                                          Policies and procedures are established
                                                          indicating how retention activities are evaluated.
     Creates a productive, supportive work       Effectiveness Indicators
     environment through a variety of programs, such as   The agency has determined which quality of
     telework, childcare assistance, fitness centers,     work/life programs meet the needs of the workforce and
     health assessments, safety seminars, employee        has implemented programs to promote flexible working
     assistance programs, parking facilities, and         arrangements and to sustain a productive, supportive
     transit subsidies.                                   work environment.
                                                          Senior leaders and managers promote the use of
                                                          quality of work/life programs and provide resources
                                                          necessary to establish and sustain these programs to
                                                          create an effective environment.
                                                          Policies and procedures describe guidelines
                                                          for flexible working arrangements, including:
                                                         --Temporary, term, and seasonal appointments.
                                                         --Flexible and/or part-time work schedules.
                                                         --Telework, including technology required to support
                                                          it, where appropriate.
                                                          Policies and procedures describe guidelines
                                                          for sustaining a productive, supportive work
                                                          environment, including:
                                                         --Ergonomic work stations.
                                                         --Reasonable accommodation.
                                                         --Child care/elder care assistance.
                                                         --Wellness programs (e.g., fitness centers, health
                                                          assessments).
                                                         --Employee Assistance Program.
                                                         --Safety inspections and education.
                                                         --Parking facilities and transit subsidies.
                                                         --Benefits (e.g., Federal Employees Health Benefits,
                                                          Thrift Savings Plan, Flexible Spending Accounts,
                                                          defined-benefit pension plan, life insurance, and long-
                                                          term care insurance).
                                                          These policies and procedures have been
                                                          communicated to the workforce and prospective
                                                          applicants via Web pages, letters from the CHCO,
                                                          recruitment materials, vacancy announcements, job fair
                                                          announcements, or other methods.
                                                          The cost and benefits of quality of work/life
                                                          programs are evaluated (e.g., surveys, entrance and
                                                          exit interviews) to determine if they are perceived by
                                                          employees as creating a positive work environment, are
                                                          meeting an identified workforce need, and are
                                                          contributing to recruitment and retention goals.
                                                         Compliance Indicators
                                                          The agency operates work/life programs in
                                                          accordance with governing laws, rules, and regulations
                                                          (e.g., telework (Public Law No. 106-346, Section 359),
                                                          flexible work schedules (5 CFR 610), transit subsidies
                                                          (Executive Order 13150)).
                                                          On-the-job injury and other Workers'
                                                          Compensation claims are filed in accordance with 5
                                                          U.S.C. 8102, 20 CFR parts 1-25, and other guidelines
                                                          of the Office of Workers Compensation Programs (OWCP).

[[Page 23047]]

 
                                                          The agency has an emergency preparedness plan
                                                          in place in accordance with OPM's requirements for
                                                          individual agencies, as outlines in OPM's Federal
                                                          Manager's/Decision Maker's Emergency Guide and in
                                                          accordance with GSA's guidance on occupant emergency
                                                          plans (Executive Orders 12656 and 12472).
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SECTION VI--Accountability System                     The Accountability System
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----------------------------------------------------------------------------------------------------------------
The Accountability System...........................  This section contains information specific to the
                                                       Accountability system. The Accountability system provides
                                                       consistent means to monitor and analyze agency
                                                       performance on all aspects of human capital management
                                                       policies, programs, and activities, which must themselves
                                                       support mission accomplishment and be effective,
                                                       efficient, and in compliance with merit system
                                                       principles.
Definition..........................................  A system that contributes to agency performance by
                                                       monitoring and evaluating the results of its human
                                                       capital management policies, programs, and activities; by
                                                       analyzing compliance with merit system principles; and by
                                                       identifying and monitoring necessary improvements.
Standard............................................  Agency human capital management decisions are guided by a
                                                       data-driven, results-oriented planning and accountability
                                                       system. Results of the agency Accountability system must
                                                       inform the development of the human capital goals and
                                                       objectives, in conjunction with the agency's strategic
                                                       planning and performance budgets.
                                                      Effective application of the Accountability system
                                                       contributes to agencies' practice of effective human
                                                       capital management in accordance with the merit system
                                                       principles and in compliance with Federal laws, rules,
                                                       and regulations.
Applicable Merit System Principles..................  The following merit system principle is especially
                                                       relevant to the Accountability system:
                                                       All employees should maintain high standards of
                                                       integrity, conduct, and concern for the public interest.
                                                       (5 U.S.C. 2301(b)(4))
Metrics.............................................  This system is assessed based on documented evidence of a
                                                       Human Capital Accountability System that provides for
                                                       annual assessment of agency human capital management
                                                       progress and results including compliance with relevant
                                                       laws, rules, and regulations. The system will:
                                                       Be formal, documented, and approved by OPM.
                                                       Be supported and resourced by agency leadership.
                                                       Measure and assess all human capital management
                                                       systems for mission alignment, effectiveness, efficiency,
                                                       and compliance with merit system principles, laws, and
                                                       regulations.
                                                       Include an independent audit process with
                                                       periodic review of human resources transactions to insure
                                                       legal and regulatory compliance.
                                                       Ensure that action is taken to improve human
                                                       capital programs and processes and correct deficiencies.
                                                       Ensure results are analyzed and reported to
                                                       agency management and OPM.
                                                      Agencies are required under 5 CFR 250.203 to submit the
                                                       Agency Human Capital Accountability Report described by
                                                       this system to OPM for review and approval on an annual
                                                       basis. This Accountability Report supports the systems of
                                                       oversight prescribed by 5 CFR 250.102.
Results.............................................  When the key elements of the Accountability system are
                                                       effectively implemented, agencies will realize the
                                                       following results:
                                                      Effectiveness Results
                                                       The agency has documented its human capital
                                                       management processes, measures, and results; evaluated
                                                       its accomplishments; and reported findings to agency
                                                       decisionmakers and other stakeholders.
                                                       Agency leadership demonstrates commitment to the
                                                       accountability system, based on OPM's standards, through
                                                       its actions and allocation of appropriate resources.
                                                       The agency conducts a continuous assessment of
                                                       its human capital practices to ensure they are sound,
                                                       produce results, and adhere to merit systems principles,
                                                       laws, and regulations. The agency provides an annual
                                                       report, which identifies areas needing improvement. A
                                                       process is in place that assigns responsibility for
                                                       taking corrective action that results in improved human
                                                       capital strategies and program integrity.
                                                      Compliance Results
                                                       In accordance with Civil Service Rule X, the
                                                       agency has established and maintains a system of
                                                       accountability that meets OPM's standards for a sound
                                                       human capital accountability system, measures
                                                       effectiveness in meeting the standards, and corrects
                                                       deficiencies in meeting the standards.
                                                       As provided in the Chief Human Capital Officers
                                                       Act of 2002 (CHCO Act) (5 U.S.C. 1304), the agency holds
                                                       managers and human resources officers accountable for
                                                       efficient and effective human resources management in
                                                       support of the agency's mission, in accordance with merit
                                                       system principles.
                                                       Human capital programs, activities, and practices
                                                       are evaluated in accordance with law, regulation, and
                                                       public policy within the Leadership and Knowledge
                                                       Management, Results-Oriented Performance Culture, and
                                                       Talent Management systems.
                                                      The following pages provide key elements and suggested
                                                       performance indicators for this system.
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----------------------------------------------------------------------------------------------------------------
                                              ACCOUNTABILITY SYSTEM
-----------------------------------------------------------------------------------------------------------------
                            Key Elements                                   Suggested Performance Indicators
----------------------------------------------------------------------------------------------------------------
To ensure that the agency's human capital practices support its
 mission and are based on merit system principles, the agency has an
 accountability system that:

[[Page 23048]]

 
     Is designed and conducted in accordance with OPM         Effectiveness Indicators
     requirements.                                                     Human capital program management
     Is formal and clearly documented, including description   guidelines, authorities, processes,
     of agency system, statement of agency policy, key                 measures, and accountabilities are issued
     responsibilities, outcomes and measures, milestones, and          via agency policy and procedural
     results.                                                          issuances and are accessible to agency
     Is fully supported by top management, including review    managers, supervisors, and employees.
     and approval of the system and allocation of sufficient           Key leaders and subordinate
     resources to promote and support the system.                      managers and supervisors throughout the
     Ensures that managers are held accountable for their      agency have at least one performance
     human capital and human resources decisions and actions.          element that relates to achieving human
     Evaluates human capital results vis-[agrave]-vis agency   capital outcomes.
     mission goals and objectives and measures; assesses compliance    Human capital risks are tracked,
     of HC programs and decisions with laws, rules, and regulations;   documented, and reported to a central
     and identifies and resolves significant problems. The system      advisory or management board, and action
     should cover all human capital systems and include the            is taken to mitigate high-risk areas.
     following:                                                        Program and initiative
    --Measures identified to address:                                  implementation efforts include published
     Success in supporting agency mission accomplishment.      plans that clearly outline roles,
     Effectiveness of human resources (HR) programs.           responsibilities, reviews, and desired
     Efficiency of HR processes.                               outcomes.
     Programmatic and transactional compliance with laws,      Accountability for implementing
     rules, and regulations.                                           improvement strategies for each
    --Data collection and analysis processes to support the            initiative or program is assigned and
     measures.                                                         resources are provided to accomplish the
    --Periodic review of HR transactions to ensure compliance with     resulting actions.
     legal, regulatory, and specific agency requirements; corrective   Assessment results are provided
     action taken in cases of noncompliance.                           to senior management and action is taken
    --An independent audit (i.e., one conducted by individual(s)       to communicate best practices, improve
     outside of the operations management chain of command) to         current practices, and correct problem
     obtain and objectively evaluate evidence.                         areas.
    --Results used to improve human capital programs and the human     A process is in place which
     capital accountability system.                                    identifies problems that pose high risk
     Evaluates specific human resources programs               to organizational integrity including:
     (recruitment and staffing, performance management, training,     --Financial or legal threats.
     awards, other, etc.)                                             --Systemic violations of employee
     Provides for evaluation of human capital and human        protections or veterans' preference.
     resources activities throughout the organization (e.g.,          --Potential loss of integrity in the
     component/geographic), including individual HR transactions.      public eye.
     Ensures human capital results and merit system            Analysis of workforce survey
     compliance are determined and reported to management and OPM.     results related to the effectiveness of
     Evaluates the effectiveness of the accountability         the Leadership and Knowledge Management,
     system itself.                                                    Results-Oriented Performance Culture, and
     Promotes continuous improvement, which is reflected in    Talent Management systems indicates that
     updates to the strategic human capital plan.                      employees perceive their agencies as high-
                                                                       performing workplaces where their skills
                                                                       and abilities are used well.
                                                                       Human capital data are current
                                                                       and accurate as indicated by
                                                                       documentation.
                                                                       OPM evaluations, agency reviews,
                                                                       and/or other human capital assessments
                                                                       indicate that:
                                                                      --Programs and processes are efficient,
                                                                       effective, and compliant.
                                                                      --The agency meets measures of success as
                                                                       reflected in strategic human capital
                                                                       plans.
                                                                       Individual human capital programs
                                                                       that do the following are developed and
                                                                       implemented:
                                                                      --Establish clear responsibility for the
                                                                       program.
                                                                      --Establish clear authority for enacting
                                                                       and evaluating the program.
                                                                      --Clarify consequences of success or
                                                                       failure.
                                                                      --Identify baseline performance.
                                                                      --Set program goals.
                                                                      --Set program milestones.
                                                                      --Identify key measures.
                                                                      --Collect appropriate data.
                                                                      --Track progress.
                                                                      --Develop and implement an ongoing
                                                                       evaluation plan.
                                                                      --Evaluate program results.
                                                                      --Identify opportunities for program
                                                                       improvement.
                                                                      --Implement improvements.
                                                                      --Monitor success of improvements.
                                                                      --Provide progress reports on schedule.
                                                                      Compliance Indicators
                                                                       In accordance with Civil Service
                                                                       Rule X, the agency has established and
                                                                       maintains a system of accountability that
                                                                       meets OPM's standards for a sound human
                                                                       capital accountability system, measures
                                                                       effectiveness in meeting the standards,
                                                                       and corrects deficiencies in meeting the
                                                                       standards.
                                                                      In accordance with the Executive
                                                                       Performance and Accountability Interim
                                                                       Rule (5 CFR 430 and 1330), the agency's
                                                                       appraisal system for senior executives
                                                                       provides for balance so that, in addition
                                                                       to expected results, the performance
                                                                       expectations for individual senior
                                                                       employees include:
                                                                      --Appropriate measures or indicators of
                                                                       employee and/or customer/stakeholder
                                                                       feedback.
                                                                      --Quality, quantity, timeliness, and cost
                                                                       effectiveness measures.

[[Page 23049]]

 
                                                                       As provided in the CHCO Act (5
                                                                       U.S.C. 1304), the agency holds managers
                                                                       and human resources officers accountable
                                                                       for efficient and effective human
                                                                       resources management in support of the
                                                                       agency's mission, in accordance with
                                                                       merit system principles.
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[FR Doc. E8-8661 Filed 4-25-08; 8:45 am]
BILLING CODE 6325-43-P