Summary: Pursuant to a congressional request, GAO reported on the Navy's personnel management demonstration project at two of its laboratories, focusing on the project's relevance to the proposed Defense Industry and Technology Act of 1988 (S. 2254).
GAO found that the project: (1) changed position classification, performance appraisal, and pay procedures; (2) allowed greater managerial control over personnel functions; (3) expanded employee opportunities; (4) demonstrated the workability of and general employee satisfaction with a pay-for-performance system; (5) increased salary costs by about 1 percent each year; (6) showed that line managers could properly make personnel decisions; and (7) did not provide sufficient data to support the Office of Personnel Management's (OPM) conclusion that it successfully met its objectives of enhanced laboratory effectiveness, greater managerial flexibility, improved employee recruitment and retention, and applicability to other organizations. GAO also found that the proposed legislation would: (1) enable the Department of Defense (DOD) to apply this alternative personnel system to its acquisition and logistics employees; and (2) include a budget-neutral implementation of the system, with no net increase in salary and administrative costs.
