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GGD-84-1 1 (1984-03-26)

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BY THE COMPTROLLER GENERAL
Report To The Chairwoman,

Subcommittee On Compensation And Employee Benefits

Committee On Post Office And Civil Service

House Of Representatives

OF THE UNITED STATES




A 2-Year Appraisal Of Merit Pay

In Three Agencies




The Civil Service Reform Act of 1978 requires agencies to establish a
merit pay system for management officials and supervisors in grades
13 through 15. GAO's review of the 1981 and 1982 merit pay cycles
in three agencies employing about 25 percent of the total federal
merit pay population found several areas requiring management
attention.

   --A number of factors other than employee performance have
   influenced the amount of merit pay employees received.

   --Although performance standards were better in 1982 than in
   1981, both the standards and the procedures used to establish
   them need to be improved.

   --OPM efforts to evaluate agencies' merit pay programs have
   been limited in scope, but recent initiatives to strengthen these
   efforts are a step in the right direction.

   --Employee perceptions of the merit pay program were low.

The agencies involved, the Departments of Navy, Agriculture, and
Housing and Urban Development, and the Office of Personnel
Management, reviewed a draft of this report and generally agreed
with its conclusions and recommendations.



                                                                123776



  7                                                             GAO/GGD-84-1
                                                                MARCH 26, 1984