Securities and Exchange Commission Human Capital Survey 	 
(10-NOV-04, GAO-05-118R).					 
                                                                 
This document presents the results of a recent GAO survey of	 
human capital issues at the Securities and Exchange Commission	 
(SEC). In March and April 2004, we conducted a follow-up to our  
2001 human capital survey of SEC attorneys, accountants, and	 
examiners to benchmark their views after the agency had 	 
implemented pay parity and work-life programs. 2001 SEC survey	 
respondents were overwhelmingly dissatisfied with pay and	 
identified other nonpay issues as warranting SEC management's	 
attention. The 2004 survey generally covered the same issue areas
that we addressed in the 2001 survey, including (1) compensation,
(2) overall job satisfaction, (3) work-life balance, (4)	 
supervision and management, (5) performance appraisal and	 
incentive system, (6) opportunities for advancement, (7)	 
organizational structure and support, (8) communication within	 
divisions and offices, and (9) training.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-118R					        
    ACCNO:   A13533						        
  TITLE:     Securities and Exchange Commission Human Capital Survey  
     DATE:   11/10/2004 
  SUBJECT:   Accountants					 
	     Flexible work schedules				 
	     Independent regulatory commissions 		 
	     Job satisfaction surveys				 
	     Lawyers						 
	     Salary increases					 
	     Securities regulation				 
	     Federal employees					 
	     Labor force					 
	     Personnel management				 
	     Personnel evaluation systems			 
	     Industrial relations				 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-05-118R

United States Government Accountability Office Washington, DC 20548

November 10, 2004

The Honorable William H. Donaldson
Chairman
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Subject: Securities and Exchange Commission Human Capital Survey

Dear Chairman Donaldson:

This document presents the results of a recent GAO survey of human capital
issues at the Securities and Exchange Commission (SEC). In March and April
2004, we conducted a follow-up to our 2001 human capital survey of SEC
attorneys, accountants, and examiners to benchmark their views after the
agency had implemented pay parity and

1

work-life programs. 2001 SEC survey respondents were overwhelmingly
dissatisfied with pay and identified other nonpay issues as warranting SEC
management's attention. The 2004 survey generally covered the same issue
areas that we addressed in the 2001 survey, including (1) compensation,
(2) overall job satisfaction, (3) work-life balance, (4) supervision and
management, (5) performance appraisal and incentive system, (6)
opportunities for advancement, (7) organizational structure and support,
(8) communication within divisions and offices, and (9) training.

As shown in enclosure I, compared to the 2001 SEC survey respondents, the
2004 respondents were significantly more satisfied with their pay and
their ability to use

2

flexitime and flexiplace. The improvement in employee satisfaction with
compensation and worklife programs could be attributed to SEC's recent
implementation of pay parity3 and increased focus on implementing
work-life programs.4 In addition, overall the employees remained satisfied
with their jobs and the meaningfulness of their work. While employee
satisfaction has improved with respect to compensation and worklife

1GAO, Securities and Exchange Commission: Human Capital Challenges Require
Management
Attention, GAO-01-947 (Washington, D.C.: Sept. 17, 2001).
2A flexitime work schedule allows employees to start work earlier or work
later or work a compressed
schedule of fewer than 10 workdays per pay period. A flexiplace
arrangement allows employees to work a
portion of the time at home or at another location.
3In 2002, the Investor and Capital Markets Fee Relief Act exempted SEC
from general federal pay
restrictions and provided the agency with pay parity-the authority
necessary to bring salaries in line with
those of other federal financial regulators.
4Work-life programs help employees balance their work and family lives and
include compressed work
schedules, alternate work schedules, telecommuting, and part-time work
arrangements.

                          GAO-05-118R SEC Staff Survey

programs, the levels of satisfaction have decreased in three nonpay
categories. Specifically, employees were less satisfied with (1) the
quality of supervision provided by their immediate supervisor and (2) the
extent to which management communicates, in a timely manner, information
that affects their work and the guidance they receive from management on
their work priorities, and they were more dissatisfied with (3) the
ability of SEC's performance appraisal system to motivate employees to
perform well and the consistency with which the system is applied.5 These
areas, which were previously mentioned in our 2001 report as warranting
management attention, appear to be areas

6

SEC should continue to address.

To conduct the 2004 survey, we randomly selected a sample of 531 SEC
attorneys,
accountants, and examiners from the same target population positions,
excluding staff
hired in the last 3 years, in order to obtain more accurate comparisons
between the 2001
and 2004 survey data. We implemented the survey using a self-administered
electronic
questionnaire that was posted on the World Wide Web. To ensure security
and the
integrity of our data, we provided each contact person with a password for
accessing and
completing the survey. From the sample of 531, we received 388 usable
responses, for
an overall response rate of 73 percent. Enclosure II provides a more
detailed discussion
of our methodology. We conducted our survey work in accordance with
generally
accepted government auditing standards.

If you have any questions about the survey results or our methodology,
please feel free to
contact me at 202-512-8678 or [email protected], or Karen Tremba, Assistant
Director, at
202-512-3113 or [email protected]. Other GAO staff that made key
contributions to this
report are Allison Abrams, Thomas Beall, William R. Chatlos, and Joe
Hunter.

Sincerely yours,

Richard J. Hillman
Director
Financial Markets and

Community Investment

Enclosures - 2

5The 2004 survey reflects reactions based on the new performance appraisal
system that was implemented
by SEC in 2003.
6GAO-01-947.

                      Page 2 GAO-05-118R SEC Staff Survey

                                  Enclosure I

                      Page 3 GAO-05-118R SEC Staff Survey

                                  Enclosure I

                      Page 4 GAO-05-118R SEC Staff Survey

                                  Enclosure I

                      Page 5 GAO-05-118R SEC Staff Survey

                                  Enclosure I

                      Page 6 GAO-05-118R SEC Staff Survey

                                  Enclosure I

                      Page 7 GAO-05-118R SEC Staff Survey

                                  Enclosure I

                      Page 8 GAO-05-118R SEC Staff Survey

                                  Enclosure I

                      Page 9 GAO-05-118R SEC Staff Survey

                                  Enclosure I

Enclosure II

  Methodology for GAO's Survey of Securities and Exchange Commission Employees

The primary objective of this study was to assess the current views of
employees at the Securities and Exchange Commission (SEC) on selected
human capital issues related to employment at SEC and to compare these
views with those of a similar cadre of employees that GAO surveyed in
2001.7 In the time between the two surveys, SEC had implemented pay parity
and work-life programs. A follow-up survey to the 2001 survey presented a
method for detecting if the perceptions of employees subsequent to these
changes had also shifted. To meet this objective, we conducted a survey of
a statistically representative sample of 531 SEC attorneys, accountants,
and examiners employed as of September 30, 2003. The survey was conducted
using a self-administered electronic questionnaire posted on the World
Wide Web during March and April 2004. At the close of the survey, we had
received 388 completed, usable surveys.

Sample Design

In order to maintain comparability between the responses to the two
surveys, the study
population for the 2004 survey was the same as that used for the 2001
survey. As with the 2001
survey, we defined our population of interest to be employees in the
attorney, accountant, and
examiner positions (Series 0905, 0510, and 1831). We also followed survey
procedures that
were analogous to the prior survey. We asked SEC to provide a list of its
attorneys,
accountants, and examiners from its personnel data system as of September
30, 2003.
However, to further ensure that we defined the population as one that was
comparable to the
one surveyed in 2001, we further adjusted the population by excluding 648
recent hires into
these positions over the last 3 years, that is, the period subsequent to
the prior survey. The final
study population was 1,653 SEC employees.

We used a stratified, systematic random sample of SEC employees from the
study population.
The population was divided into two strata. The first stratum was
employees from any regional
or district office, and the second stratum was employees from the
Washington, D.C./Metro
Office. Of the 1,653 employees in our study population, there were 810 in
the first stratum and
843 in the second stratum. We selected a total sample of 531 employees-264
from the first
stratum and 267 from the second stratum.

Survey Development

Almost all of the survey questions asked in the 2004 survey were the same
as the questions asked in the 2001 survey. The 2004 questionnaire
consisted of approximately 55 items, almost all of which were
closed-ended-that is respondents were to choose a specific response
category that reflected their level of satisfaction or dissatisfaction
with various aspects of work. We used a 5-point scale with the following
response categories: very satisfied, generally satisfied, neither
satisfied nor dissatisfied, generally dissatisfied, very dissatisfied.
There were also items that obtained demographic information about the
respondents. A representation of the Survey of Securities and Exchange
Commission Employees can be seen in enclosure I.

7GAO, Securities and Exchange Commission: Human Capital Challenges Require
Management Attention, GAO01-947 (Washington, D.C.: Sept. 17, 2001).

Page 11 GAO-05-118R SEC Staff Survey

Enclosure II Not all of the questions asked on the 2001 survey were asked
on the 2004 survey. Because the objective of the 2004 survey was to assess
perceived changes in the work environment, we retained most of the items
from the 2001 survey asking about various aspects of work. We excluded
sections from the 2001 survey that asked why employees initially decided
to work at SEC and that asked about the perceived impact of factors on
morale, future plans and reasons for leaving SEC. Because almost all items
of the 2004 survey were pretested when used in the 2001 survey, no
additional pretesting was conducted.

As with the 2001 survey, we presented the draft questionnaire to SEC
officials for comments and received only minor changes. We also asked
union officials representing SEC employees to review a draft version of
the survey.

Survey Administration

Beginning March 4, 2004, the sampled SEC staff were sent e-mail
notifications requesting their participation in the survey. We contacted
SEC to correct the e-mail addresses when they were not deliverable. We
conducted an electronic survey between March 10, 2004, and April 4, 2004,
and sent each employee a unique password by e-mail to ensure that only
these sampled employees could participate in the survey.8 Individuals who
did not respond to the initial questionnaire were sent up to two follow-up
reminders. At the close of the survey period, we had a total of 388 usable
responses, for an overall response rate of 73 percent.

We took steps during the design, data collection, and analysis phases of
our survey to minimize

9

sampling, population coverage, measurement, and data-processing errors. In
addition to some of the steps described above, such as working with SEC in
developing the population list, using pre-tested items, resolving
undeliverable e-mails, and identifying ineligible sample participants, we
also conducted checks for inconsistencies in response to selected items
and had a second independent analyst review all computer programs used in
our analysis.

Survey Analysis

The 2004 survey results are generalizable to the SEC study population
defined as attorneys, accountants, and examiners employed at SEC at the
time of the 2001 administration of a similar survey. These estimates do
not reflect the views of all currently employed SEC attorneys,
accountants, and examiners because the population from which we drew our
sample does not include persons hired in the last three years.

Estimates were formed by weighting the survey responses to account for
effective sampling rates in each of the two strata for the 2004 survey,
and we applied appropriate weights to the 2001 sample to address those
employees who did not respond to that survey. As with most surveys, our
estimation method assumes that nonrespondents would have answered like the
survey respondents.

8During our field work, we determined that eight of the individuals in our
original sample were ineligible for our
survey because they were no longer in the population of interest; they had
either left the agency or they were on
extended leave and not currently at work. We adjusted our sample size
accordingly in calculating our response
rate.
9Population coverage errors can occur if some members of the population
are excluded from the survey.
Measurement errors can also arise if respondents interpret questions
differently or make mistakes. Data
processing errors can arise during data entry or analysis.

Page 12 GAO-05-118R SEC Staff Survey

Enclosure II Because we surveyed a sample of SEC employees in our 2004
survey, our results are estimates of employee perceptions and
characteristics; thus, they are subject to sampling errors that are
associated with samples of this size and type. Our confidence in the
precision of the results from this sample is expressed in 95 percent
confidence intervals. We calculated confidence intervals for our study
results using methods that are appropriate for a stratified probability
sample.

For the presentation of response percentages in the 2004 survey, we are 95
percent confident that the results we would have obtained had we studied
the entire study population are within +/- 5 or fewer percentage points of
our results, unless otherwise noted. For example, our survey estimates
that 49 percent of the SEC target population was "generally dissatisfied"
or "very dissatisfied" with "administrative resources (e.g., support
staff) you need to do your job well." The 95 percent confidence interval
for this estimate would be no wider than +/- 5 percent, or between 44 and
54 percent. For the 2001 survey results, we also used the 95 percent
confidence level, which would provide for a confidence interval of +/- 2
percentage points.

Before testing for differences between the 2004 and the 2001 survey
results, we collapsed the two levels of both the satisfied and
dissatisfied categories into single satisfied or dissatisfied categories;
thus, reducing the number of categories for comparison from five to three.
When making comparisons of percentages between the 2004 and 2001 survey
results for these collapsed categories, we used a pooled variance
estimate. In general, if the difference between a survey percentage from
the 2001 survey and the 2004 survey is more than +/- 5 percentage points;
the difference is considered to be statistically significant.

Independence

We conducted our work in Washington, D.C., between October 2003 and
November 2004 in accordance with generally accepted government auditing
standards.

(250138)

                      Page 13 GAO-05-118R SEC Staff Survey

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

GAO's Mission	The Government Accountability Office, the audit, evaluation
and investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of The fastest and easiest way to obtain copies of GAO
documents at no cost

is through GAO's Web site (www.gao.gov). Each weekday, GAO postsGAO
Reports and newly released reports, testimony, and correspondence on its
Web site. To Testimony have GAO e-mail you a list of newly posted products
every afternoon, go to

www.gao.gov and select "Subscribe to Updates."

Order by Mail or Phone	The first copy of each printed report is free.
Additional copies are $2 each. A check or money order should be made out
to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
Orders for 100 or more copies mailed to a single address are discounted 25
percent. Orders should be sent to:

U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548

To order by Phone:	Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061

                           To Report Fraud, Contact:
        Waste, and Abuse in Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: [email protected] Programs Automated answering system: (800)
424-5454 or (202) 512-7470

Congressional	Gloria Jarmon, Managing Director, [email protected] (202)
512-4400 U.S. Government Accountability Office, 441 G Street NW, Room 7125

Relations Washington, D.C. 20548

Public Affairs	Susan Becker, Acting Manager, [email protected] (202)
512-4800 U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548
*** End of document. ***