Serious Problems Need To Be Corrected Before Federal Merit Pay Goes Into Effect

Gao ID: FPCD-81-73 September 11, 1981

GAO reviewed the Federal agencies' progress in implementing the performance appraisal and merit pay provisions of the Civil Service Reform Act.

GAO is concerned about the Federal agencies' readiness to make sound merit pay decisions. The decentralized, nonprescriptive approach of the Office of Personnel Management (OPM) is not providing the leadership that is needed to insure quality merit pay programs. Its nonprescriptive approach has resulted in guidelines to agencies that are not timely or definitive enough to insure that effective pay-for-performance systems will be developed. OPM has emphasized reviewing and approving agencies' performance appraisal and merit pay plans for compliance with the law, but not assessing the quality of these systems or assuring that they operate properly. In addition, many agencies are not pretesting their systems to identify and correct problems early. The review points out that problems with merit pay implementation could cause program failure unless immediate action is taken. GAO believes that merit pay implementation should be delayed until agencies are ready to make sound decisions based on performance and urges OPM to revise its formula to comply with the law.


Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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