Summary

In response to a congressional request, GAO provided information on: (1) five federal agencies' transition from merit pay to the Performance Management and Recognition System (PMRS); (2) how PMRS addressed the problems identified with merit pay; (3) the problems that still exist under PMRS; (4) the pay increases and performance awards PMRS employees received in fiscal year 1985; and (5) selected employees' initial perceptions of PMRS operations.

GAO found that: (1) the Office of Personnel Management (OPM) and the agencies lacked time to prepare for implementing PMRS because Congress enacted PMRS approximately 1 month after it was to have become effective; (2) OPM often issued untimely, unclear, and inconsistent guidelines and regulations during the initial months after implementing PMRS; (3) three of the few agencies that provided personnel data provided their employees with general pay and merit increases and performance awards in accordance with PMRS; (4) one agency miscalculated the increases for many of its PMRS employees, which could result in erroneous merit increases in future years; (5) certain nonperformance-related factors that caused inequities under merit pay continued to exist in PMRS; and (6) award amounts varied considerably for employees with the same grades and performance ratings.