81 FR 6469 - Personnel Management in Agencies

OFFICE OF PERSONNEL MANAGEMENT

Federal Register Volume 81, Issue 25 (February 8, 2016)

The Office of Personnel Management is issuing proposed regulations that introduce updated systems and regulatory definitions for managing human resources in the Federal Government. The rulemaking also proposes to reduce and clarify the reporting procedures that agencies are required to follow, creates a data-driven review process (HRStat); and describes workforce planning methods that agencies are required to follow. Additionally, the proposed regulation aligns Strategic Human Capital Management to the Government Performance and Results Act Modernization Act of 2010 (Pub. L. 111-352). It also sets forth the new Human Capital Framework (HCF), which replaces the Human Capital Assessment Accountability Framework (HCAAF).

[Federal Register Volume 81, Number 25 (Monday, February 8, 2016)]
[Proposed Rules]
[Pages 6469-6475]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-02112]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR PART 250

RIN 3206-AL98


Personnel Management in Agencies

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management is issuing proposed 
regulations that introduce updated systems and regulatory definitions 
for managing human resources in the Federal Government. The rulemaking 
also proposes to reduce and clarify the reporting procedures that 
agencies are required to follow, creates a data-driven review process 
(HRStat); and describes workforce planning methods that agencies are 
required to follow.
    Additionally, the proposed regulation aligns Strategic Human 
Capital Management to the Government Performance and Results Act 
Modernization Act of 2010 (Pub. L. 111-352). It also sets forth the new 
Human Capital Framework (HCF), which replaces the Human Capital 
Assessment Accountability Framework (HCAAF).

DATES: Comments must be received on or before April 8, 2016.

ADDRESSES: You may submit comments, identified by RIN number 3206-AL98, 
using any of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    Mail: Veronica Villalobos, Principal Deputy Associate Director, 
Employee Services, Office of Personnel Management, Room 7460, 1900 E 
Street NW., Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: For information contact Jan Chisolm-
King by email at [email protected] or by telephone at (202) 
606-1958.

SUPPLEMENTARY INFORMATION: The Office of Personnel Management (OPM) is 
issuing proposed regulations to revise 5 CFR part 250, subpart B, 
Strategic Human Capital Management and 5 CFR part 250, subpart C, 
Employee Surveys.
    5 CFR part 250, subpart B, implements the requirements of 5 U.S.C. 
1103(c) and the Chief Human Capital Officers Act (CHCO Act). Section 
1103(c)(1) requires OPM to design a set of systems, including 
appropriate metrics, for assessing the management of human capital by 
Federal agencies and to define those systems in regulation. Section 
1103(c)(2) requires OPM to define the systems in regulations and 
include standards addressing a series of specified topics. Subpart B of 
part 250 of title 5, Code of Federal Regulations, contains those 
regulations. Subpart B also provides an avenue for Chief Human Capital 
Officers (CHCOs) to carry out their required functions under 5 U.S.C. 
1402(a).
    Current regulations implement 5 U.S.C. 1103(c) by adopting the 
systems currently comprising the Human Capital Assessment and 
Accountability Framework (HCAAF) to constitute the systems required by 
5 U.S.C. 1103(c)(1) and to provide the systems definitions and 
standards required by 5 U.S.C. 1103(c)(2). The HCAAF is a framework 
that integrates four human capital systems--Strategic Planning and 
Alignment, Talent Management, Performance Culture, and Evaluation. 
These systems define practices for the effective and efficient 
management of human capital and support the steps involved in the 
planning and goal setting, implementation, and evaluation of human 
capital policies, programs, and initiatives in the Federal Government.

Proposed August 2011 Regulations

    In August, 2011, OPM issued proposed regulations (FR Doc No: 2011-
19844) that sought to make several changes to the regulatory 
definitions related to the strategic management of human capital. The 
current regulations implement 5 U.S.C. 1103(c) by adopting the systems 
comprising the Human Capital Assessment and Accountability Framework 
(HCAAF) to constitute the systems required by 5 U.S.C. 1103(c)(1) and 
to provide the systems definitions and standards required by 5 U.S.C. 
1103(c)(2). Having the HCAAF written into regulation makes it difficult 
to keep current. OPM concluded in 2011, as it does again today, that it 
would be more effective to provide definitions in the regulations that 
establish broad, overarching concepts, and to treat some of the system-
specific material in the framework as guidance that is subject to 
change as Federal human capital management evolves. This removal of the 
HCAAF from the stated regulation into guidance would allow OPM to 
refresh aspects of the framework, without requiring a change to the 
specific regulations, thereby encouraging flexibility and adaptability. 
An additional change in the earlier proposal was the elimination of the 
requirement for the Strategic Human Capital Plan (SHCP) and Human 
Capital Management Report (HCMR) to reduce the burden of reporting 
requirements for the agencies.
    In addition, the earlier proposed regulation would have clarified 
requirements imposed by two separate legal authorities. In the past, 
there was some confusion regarding whether agencies must establish 
separate accountability systems in order to satisfy the statutory 
requirements of 5 U.S.C. 1103(c)(2)(F) and any requirement OPM 
previously imposed under Civil Service Rule X (5 CFR 10.2). The 
proposed regulations were expected to make clear that the requirements 
of these two legal authorities are satisfied by the establishment of 
the Human Capital Accountability System (HCAS) set forth in section 
250.205 of the proposed regulation.

Recent Developments

    OPM did not make the proposed regulation final because of several 
developments that required additional changes to what had been written 
in the proposed regulation. One major change was the enactment of the 
Government Performance and Results Act Modernization Act of 2010 (Pub. 
L. 111-352), and the issuance of the Diversity and Inclusion Executive 
Order (E.O. 13583).

The Government Performance and Results Act (GPRA) Modernization Act 
(GPRAMA)

    Before the enactment of GPRAMA, agencies were required to develop 
Strategic Human Capital Plans that identified human capital (HC) 
strategies and resources that support agency missions and strategic 
goals. Under GPRAMA, agency strategic HC plans are no longer required; 
however, agencies must now integrate the human capital strategies and 
resources within their agency strategic plan. Human Capital Management 
Reports (HCMRs) also were eliminated. Implementation guidance for 
GPRAMA states that CHCOs will address in their Annual Performance Plan, 
``how performance

[[Page 6470]]

goals are to be achieved with respect to training, skills, and other HC 
resources required to meet those performance goals'' (Pub. L. 111-352).
    This information was previously reported in the agency HCMR. OPM is 
now introducing a requirement that agencies develop a process to 
monitor how the design and implementation of their respective human 
capital policies and programs support an agency's mission and strategic 
goals. Thus, the Annual Performance Plan and annual Human Capital 
Operation Plan (HCOP) will eliminate the requirement currently stated 
in section 250.203 to maintain a human capital plan.
    In addition, the Diversity and Inclusion Executive Order supports 
the elimination of the SHCP and the HCMR through its emphasis on report 
consolidation--

review applicable directives to agencies related to the development 
or submission of agency human capital and other workforce plans and 
reports in connection with recruitment, hiring, promotion, 
retention, professional development, and training policies and 
practices, and develop a strategy for consolidating such agency 
plans and reports where appropriate and permitted by law (E.O. 
13583, Sec. 2(b)(ii))

HCAAF Revitalization

    A third reason that OPM did not make the proposed regulation final 
was because at the same time new regulations and executive orders were 
being proposed, OPM launched an initiative called Human Capital 
Assessment and Accountability Framework (HCAAF) Revitalization. The 
intent of the initiative was to update the set of systems and standards 
that have direct impact on how agencies carry out the planning, 
implementation, and evaluation of their HC initiatives/programs. The 
HCAAF Revitalization initiative identified innovative approaches that 
will help ensure that the framework continues to add value to Federal 
human capital professionals and program managers. As part of this 
revitalization effort, OPM conducted a thorough analysis of the current 
HCAAF framework, including a review of the initial goals and objectives 
of the framework, its flexibility, and how effectively it has been used 
in the current Federal environment, and identification of 
implementation challenges. Data on the current HCAAF and how it is used 
was obtained through the following venues:
     Interviews conducted with a wide range of subject matter 
experts (SMEs) knowledgeable about the HCAAF;
     administration of a questionnaire to human resources 
directors and program managers throughout the Federal Government;
     reviews of relevant documentation/literature provided by 
OPM, academic, and practitioner communities; and
     a roundtable meeting of noted human capital practitioners 
and experts from public and private sectors.
    Based on this exhaustive review, OPM concluded that it would be 
more effective to discharge its obligations under 5 U.S.C. 1103(c)(2) 
by developing a Human Capital Framework (HCF) that is composed of four 
systems--Strategic Planning and Alignment, Performance Culture, Talent 
Management, and Evaluation.

New Human Capital Framework

    The Human Capital Framework (HCF) is a framework that integrates 
four human capital systems--Strategic Planning and Alignment, Talent 
Management, Performance Culture, and Evaluation. These systems define 
good practices for effective and efficient human capital management and 
support the steps involved in the planning and goal setting, 
implementation, and evaluation of human capital initiatives in the 
Federal Government.
    The proposed framework contains standards and focus areas. A 
standard is a consistent practice within human capital management in 
which agencies strive towards in each of the four HCF systems. The 
standards ensure that an agency's human capital management strategies, 
plans, and practices: (1) Are integrated with strategic plans, annual 
performance plans and goals, and other relevant budget, and acquisition 
plans; (2) contain measurable and observable performance targets; (3) 
are communicated in an open and transparent manner to facilitate cross-
agency collaboration to achieve mission objectives; and (4) inform the 
development of human capital management priority goals for the Federal 
Government. The introduction of standards and monitoring of how they 
are implemented fosters an environment to establish progress measures. 
Focus areas are sound approaches that further define the system and 
must be integrated within agency strategic plans, annual performance 
plans and goals that contain measurable and observable performance 
targets and are communicated in an open and transparent manner to 
facilitate cross-agency collaboration to achieve mission objectives.
    Finally, the proposed framework will include resources that can 
assist in the development, implementation, and monitoring of sound 
strategic human capital practices.

Proposed Regulation

    OPM is now issuing proposed regulations to revise 5 CFR part 250, 
subpart B, Strategic Human Capital Management. The proposed regulation 
will:
     Revise definitions to better align with statute.
     Implement 5 U.S.C 1103 by adopting the proposed new 
systems as required by 5 U.S.C. 1103(c)(1) and the proposed new 
systems, definitions, and standards as required by 5 U.S.C. 1103(c)(2). 
This new framework will integrate four human capital systems--Strategic 
Planning and Alignment, Performance Culture, Talent Management, and 
Evaluation. We expect that the new systems and system definitions will 
facilitate more effective alignment of human capital programs with 
agency mission objectives.
     Define the new systems and include the new standards as 
required by 5 U.S.C. 1103(c)(2) as a set of overarching concepts in 
regulation to be supplemented with details in guidance. OPM continues 
to believe that, under the current regulation, the incorporation of the 
full text of the HCAAF to satisfy the 5 U.S.C. 1103(c)(2) requirements 
has proven to undermine the original concept of the HCAAF with respect 
to flexibility and adaptability. The original HCAAF document was 
integrated several years ago into a web-based Resource Center that was 
updated based on feedback, analysis, and emerging agency practices and 
results. Once the entire text of the HCAAF was brought into regulation, 
it became difficult to keep current. OPM concluded that it would be 
more effective to discharge its obligations under 5 U.S.C. 1103(c)(2) 
by providing definitions in the regulations that establish broad, 
overarching concepts, and treating the specific material in the HCAAF 
as guidance that can be updated, as appropriate, as Federal human 
capital management evolves. This will allow OPM to refresh some aspects 
of the framework without requiring a change to the specific regulations 
thus encouraging flexibility and adaptability.
     Create the Human Capital Strategic Review (HCSR) process. 
The HCSRs will:
    [cir] Enable OPM and agencies to monitor progress with achieving 
organizational outcomes by the presentation of synthesized evidence and 
information (indicators, evaluations/audits, and HRStat reviews);

[[Page 6471]]

    [cir] provide OPM with the opportunity to identify cross-cutting 
themes to position OPM to develop governmentwide policies and 
strategies;
    [cir] afford agencies with the opportunity to receive feedback from 
OPM to improve strategies and evaluation processes; and
    [cir] identify opportunities for improvement that will enable 
decision making that leads to the prioritization of resources.
     Institutionalize a human capital performance improvement 
process, referred to as ``HRStat'' that identifies, measures, and 
analyzes human capital data to improve human capital outcomes. HRStat, 
a data-driven review process, will drive performance and alignment of 
achieving human capital goals related to the agency mission.
     Define the annual Human Capital Operation Plan, which 
supports an Agency Performance Plan.
     Restructure the requirements of Subpart B of Part 250 for 
agencies by removing the regulatory requirement for the HCMR. OPM 
proposes to monitor agency outcomes in human capital management through 
the Human Capital Evaluation Framework.
     Introduce workforce planning methods agencies are required 
to follow.
     Ensure consistency by clearly defining key human capital 
management terms.
    The purpose of these proposed changes is to focus the regulations 
on the specific requirements that are the most significant for 
establishing and maintaining efficient and effective human capital 
management systems now and into the future, while providing agencies 
with flexibility in determining how they will accomplish their human 
capital activities.

Employee Survey Enhancements

    5 CFR part 250, subpart C, implements the requirements of section 
1128 of the National Defense Authorization Act for Fiscal Year 2004 
(Pub. L. 108-136, sec.1128, codified at 5 U.S.C. 7101 note). Section 
1128 of Public Law. 108-136 requires each Executive agency to conduct 
an annual survey of its employees to assess leadership and management 
practices that contribute to agency performance and employee 
satisfaction as it relates to five enumerated areas of work life. The 
law also requires OPM to ``issue regulations prescribing survey 
questions that should appear on all agency surveys.'' In addition, the 
law requires agencies to make the survey results available to the 
public and post the results on their Web sites, unless the head of the 
agency determines that doing so would jeopardize or negatively impact 
national security.

Survey Background

    OPM issued a final regulation (5 CFR part 250, subpart C) including 
45 specific survey questions on August 24, 2006. The requirement was 
for agencies to conduct an annual survey (``Annual Employee Survey'') 
with prescribed questions beginning in calendar year 2007. OPM's 
centralized Federal Employee Viewpoint Survey (FEVS) administration 
includes these survey questions. When the FEVS is administered 
governmentwide the burden for individual agencies to administer its own 
survey is alleviated. To modernize the survey, OPM is issuing proposed 
regulations to revise 5 CFR part 250, subpart C, Employee Surveys. The 
proposed regulation will:
     Reduce the number of specifically prescribed questions in 
the regulation:
    A critical review of the FEVS questions currently in regulation was 
conducted by: (1) A cross-governmental agency task force convened by 
OPM (2011); and (2) by university researchers and published in the 
Public Administration Review (PAR) (Fernandez, Resh, Moldogaziev, and 
Oberfield, 2015) for the purpose of reviewing and revising the current 
questions. These reviews led to the formation of a group of OPM 
psychologists tasked with addressing these recommendations to further 
advance the survey program.
    The cross-governmental agency task force, made up of survey experts 
from several agencies (e.g., ODNI, DOD, OMB, DOI, VA) reviewed the FEVS 
through a stepwise process of data analysis, stakeholder engagement, 
solicitation of expert opinion and input from OMB and recommended a 
concise subset of questions critical to the intent of the original 
statute.
    The PAR article, which reviewed more than 40 research articles 
based on FEVS data, indicates the validity of the FEVS would largely 
benefit from a revision to include stronger, relevant and unambiguous 
questions as well as questions that capture a single concept. The study 
also addressed the notion that in a revision of survey questions, the 
selection of relevant concepts and proper instrumentation should be 
grounded in a thorough review of the literature and sound theoretical 
reasoning.
    The group of OPM psychologists analyzed and confirmed the external 
recommendations and proposed a final set of 11 questions that were 
selected based on adherence to and measurement of the areas in statute. 
The identified questions exhibit appropriate properties as metrics as 
reflected through psychometric analysis; and are clear and unambiguous 
in nature. These independent efforts support the inclusion of the set 
of questions proposed in this regulation. OPM will address specific 
item concerns at the conclusion of the open comment period.
     Modify the definitions of the terms used in the questions 
in regulation. Definitions were modified and clarified in response to 
comments received during the course of FEVS administration from (1) 
survey respondents, (2) agency leaders, and (3) the Senior Executive 
Association; and
     Modify the requirement for notification to OPM. Process 
improvements achieved by technical advances eliminate the regulatory 
need for agencies to submit data to OPM as OPM can readily access data 
from posts of agency results to their Web sites as required under Sec.  
250.303(a).

Executive Order 13563 and Executive Order 12866, Regulatory Review

    The Office of Management and Budget has reviewed this proposed rule 
in accordance with E.O. 13563 and 12866.

Paperwork Reduction Act

    This document does not contain proposed information collection 
requirements subject to the Paperwork Reduction Act of 1995 (Pub. L. 
104-13).

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
apply only to Federal agencies and employees.

List of Subjects in 5 CFR Part 250

    Authority for personnel actions in agencies, Employee surveys, 
Strategic human capital management.

Office of Personnel Management.
Beth F. Cobert,
Acting Director.

    Accordingly, OPM is proposing to amend title 5, Code of Federal 
Regulations, as follows:

PART 250--PERSONNEL MANAGEMENT IN AGENCIES

Subpart B--Strategic Human Capital Management

0
1. Subpart B is revised to read as follows:
Subpart B--Strategic Human Capital Management
Sec.
250.201 Coverage and purpose.

[[Page 6472]]

250.202 Definitions.
250.203 Strategic human capital management.
250.204 Agency roles and responsibilities.
250.205 Metrics.
250.206 Consequences of improper agency actions.

Subpart B--Strategic Human Capital Management

    Authority: 5 U.S.C. 105; 5 U.S.C. 1103 (a)(7), (c)(1), and 
(c)(2); 5 U.S.C. 1401; 5 U.S.C. 1402(a); 31 U.S.C. 1115(a)(3); 31 
U.S.C. 1115(f); 31 U.S.C. 1116(d)(5); Public Law 103-62; Public Law 
107-296; Public Law 108-136, 1128; Public Law 111-352; 5 C.F.R 10.2; 
FR Doc No: 2011-19844; E.O. 13583; E.O. 13583, Sec 2(b)(ii)


Sec.  250.201  Coverage and purpose.

    Pursuant to 5 U.S.C. 1103(c), this subpart defines a set of 
systems, including standards and metrics, for assessing the management 
of human capital by Federal agencies. These regulations apply to all 
Executive agencies as defined in 5 U.S.C. 105 and support the 
performance planning and reporting that is required by sections 
1115(a)(3) and (f) and 1116(d)(5) of title 31, United States Code.


Sec.  250.202  Definitions.

    Chief Human Capital Officer (CHCO) is the agency's senior leader 
whose primary duty is to:
    (1) Advise and assist the head of the agency and other agency 
officials in carrying out the agency's responsibilities for selecting, 
developing, training, and managing a high-quality, productive workforce 
in accordance with merit system principles; and
    (2) Implement the rules and regulations of the President, the 
Office of Personnel Management (OPM), and the laws governing the civil 
service within the agency.
    CHCO agency is an Executive agency, as defined by 5 U.S.C. 105, 
which is required by 5 U.S.C. 1401 to appoint a CHCO.
    Director of OPM is, among other things, the President's advisor on 
actions that may be taken to promote an efficient civil service and a 
systematic application of the merit system principles, including 
recommending policies relating to the selection, promotion, transfer, 
performance, pay, conditions of service, tenure, and separation of 
employees. The Director of OPM provides governmentwide leadership and 
direction in the strategic management of the Federal workforce.
    Evaluation system is an agency's overarching system for evaluating 
the results of all human capital planning to inform the agency's 
continuous process improvement efforts. This system also is used for 
ensuring compliance with all applicable statutes, rules, regulations, 
and agency policies.
    Federal Workforce Strategic Priorities Report is a strategic human 
capital report, published by OPM by the first Monday in February of any 
year in which the term of the President commences. The report 
communicates key governmentwide human capital priorities and suggested 
strategies. The report informs agency strategic and human capital 
planning.
    Focus areas are areas that agencies and human capital practitioners 
must focus on to achieve a system's standard.
    HRStat is a strategic human capital performance evaluation process 
that identifies, measures, and analyzes human capital data to inform 
the impact of agency human capital on organizational results and to 
improve human capital outcomes. HRStat is a component of an agency's 
strategic planning and alignment, and evaluation systems that are part 
of the Human Capital Framework..
    Human Capital Evaluation Framework underlies the three human 
capital evaluation mechanisms (e.g., HRStat, Audits, and Human Capital 
Strategic Reviews) to create a central evaluation framework that 
integrates the outcomes from each to provide OPM and agencies with an 
understanding of how human capital policies and programs are supporting 
missions.
    Human Capital Framework (HCF) provides comprehensive guidance on 
the principles of strategic human capital management in the Federal 
Government. The framework provides direction on human capital planning, 
implementation, and evaluation in the Federal environment.
    Human Capital Operation Plan (HCOP) is an agency's annual human 
capital implementation document, which describes how an agency will 
support the human capital elements stated within its Annual Performance 
Plan (APP). Program specific workforce investments and strategies 
(e.g., hiring, closing skills gaps, etc.) should be incorporated into 
the APPs as appropriate. The HCOP should clearly execute each of the 
four systems of the HCF. The HC Strategy, HCOP, and HCSR should align 
with GPRAMA annual performance plans and timelines.
    Human Capital Strategic Review (HCSR) is OPM's annual review of an 
agency's design and implementation of its HCOP, independent audit, and 
HRStat programs to support mission accomplishment and human capital 
outcomes.
    Independent audit program is a component of an agency's evaluation 
system designed to review all human capital management systems and 
select human resources transactions to ensure efficiency, 
effectiveness, and legal and regulatory compliance.
    Skills gap is a variance between the current and projected 
workforce size and skills needed to ensure an agency has a cadre of 
talent available to meet its mission, and make progress towards its 
goals and objectives.
    Standard is a consistent practice within human capital management 
in which agencies strive towards in each of the four HCF systems. The 
standards ensure that an agency's human capital management strategies, 
plans, and practices:
    (1) Are integrated with strategic plans, annual performance plans 
and goals, and other relevant budget, finance, and acquisition plans;
    (2) Contain measurable and observable performance targets;
    (3) Are communicated in an open and transparent manner to 
facilitate cross-agency collaboration to achieve mission objectives; 
and
    (4) Inform the development of human capital management priority 
goals for the Federal Government.


Sec.  250.203  Strategic human capital management systems and 
standards.

    Strategic human capital management systems, standards, and focus 
areas are defined within the Human Capital Framework (HCF). The four 
systems described below provide definitions and standards for human 
capital planning, implementation, and evaluation. OPM may augment the 
definitions and standards set forth in this section with additional 
focus areas that the Director of OPM will publish in such form as the 
Director determines appropriate. The HCF systems and standards are:
    (a) Strategic planning and alignment. A system that ensures agency 
human capital programs are aligned with agency mission, goals, and 
objectives through analysis, planning, investment, and measurement. The 
standards for the strategic planning and alignment system require an 
agency to ensure an agency's human capital management strategies, 
plans, and practices--
    (1) Integrate strategic plans, annual performance plans and goals, 
and other relevant budget, finance, and acquisition plans;
    (2) Contain measurable and observable performance targets; and
    (3) Communicate in an open and transparent manner to facilitate 
cross-agency collaboration to achieve mission objectives.

[[Page 6473]]

    (b) Talent management. A system that promotes a high-performing 
workforce, identifies and closes skills gaps, and implements and 
maintains programs to attract, acquire, develop, promote, and retain 
quality and diverse talent. The standards for the Talent Management 
system require an agency to--
    (1) Plan for and manage current and future workforce needs;
    (2) Design, develop, and implement proven strategies and techniques 
and practices to attract, hire, develop, and retain talent; and
    (3) Make progress toward closing any knowledge, skill, and 
competency gaps throughout the agency.
    (c) Performance culture. A system that engages, develops, and 
inspires a diverse, high-performing workforce by creating, 
implementing, and maintaining effective performance management 
strategies, practices, and activities that support mission objectives. 
The standards for the performance culture system require an agency to 
have--
    (1) Strategies and processes to foster a culture of engagement and 
collaboration;
    (2) A diverse, results-oriented, high-performing workforce; and
    (3) A performance management system that differentiates levels of 
performance of staff, provides regular feedback, and links individual 
performance to organizational goals.
    (d) Evaluation. A system that contributes to agency performance by 
monitoring and evaluating outcomes of its human capital management 
strategies, policies, programs, and activities by meeting the following 
standards--
    (1) Ensuring compliance with merit system principles; and
    (2) Identifying, implementing, and monitoring process improvements.


Sec.  250.204  Agency roles and responsibilities.

    (a) An agency must use the systems and standards established in 
this part, and any metrics that OPM subsequently provides in guidance, 
to plan, implement, evaluate and improve human capital policies and 
programs. These policies and programs must--
    (1) Align with Executive branch policies and priorities, as well as 
with individual agency missions, goals, and strategic objectives. 
Agencies must align their human capital management strategies to 
support the Federal Workforce Strategic Priorities Report, agency 
strategic plan, agency performance plan, and budgets prepared under OMB 
Circular A-11;
    (2) Be based on comprehensive workforce planning and analysis;
    (3) Monitor and address skills gaps within governmentwide and 
agency-specific mission critical occupations by using comprehensive 
data analytic methods and gap closure strategies;
    (4) Recruit, hire, develop, and retain an effective workforce, 
especially in the agency's mission-critical occupations;
    (5) Ensure leadership continuity by implementing and evaluating 
recruitment, development, and succession plans for leadership 
positions;
    (6) Implement a knowledge management process to ensure continuity 
in knowledge sharing among employees at all levels within the 
organization;
    (7) Sustain an agency culture that engages employees by defining, 
valuing, eliciting, and rewarding high performance; and
    (8) Hold the agency head, executives, managers, human capital 
officers, and human capital staff accountable for efficient and 
effective strategic human capital management, in accordance with merit 
system principles.
    (b) Each agency must meet the statutory requirements of the 
Government Performance and Results Act Modernization Act (GPRAMA) by 
including within the Annual Performance Plan (APP) human capital 
practices that are aligned to the APP. The human capital portion of the 
APP must include performance goals and indicators. Guidance on 
preparing the human capital portions of an agency's APP can be found in 
OMB Circular A-11, part 6, section 200.
    (c) An agency's Deputy Secretary, or equivalent, is responsible for 
ensuring that the agency's strategic plan includes a description of the 
operational processes, skills and technology, and human capital 
information required to achieve the agency's goals and objectives. 
Specifically, the Deputy Secretary, or equivalent will--
    (1) Allocate resources;
    (2) Ensure the agency incorporates applicable priorities identified 
within the Federal Workforce Strategic Priorities Report and is working 
to close governmentwide and agency-specific skills gaps; and
    (3) Participate with the senior management team in their agency's 
(at a minimum) quarterly HRStat reviews.
    (d) Each agency must develop an annual Human Capital Operation Plan 
(HCOP) in support of the Federal human capital assessment and agency 
APP, to be reviewed annually, and updated if needed, as part of the 
agency's efforts to improve its human capital processes. The HCOP must 
demonstrate how an agency's human capital implementation strategies 
will meet an agency's mission and strategic goals (e.g., human capital 
policies, goals, objectives, and day-to-day operational needs). The 
HCOP will be made available to OPM upon request. Guidance on preparing 
the human capital portions of an agency's APP can be found in OMB 
Circular A-11, part 6, section 200. The HCOP must--
    (i) Be established through the coordination of a working group that 
is led by the agency's Chief Human Capital Officer and which should 
include the agency's Chief Operating Officer (COO), Performance 
Improvement Officer (PIO), Chief Information Officer (CIO), Chief 
Financial Officer (CFO), and Equal Employment Opportunity (EEO) 
Director to ensure that budget, technology, and performance processes 
are integrated to support human capital strategies and outcomes;
    (ii) Support the design and implementation of the human capital 
strategy by approving the agency four-year annual Human Capital 
Operation Plan (AHCOP);
    (iii) Be used to inform the development of an agency's strategic 
plan, because an agency's human capital can affect whether or not a 
strategy or strategic goal is achieved;
    (iv) Explicitly describe the agency-specific skill and competency 
gaps that must be closed through the use of agency selected human 
capital strategies;
    (v) Include annual human capital performance goals and measures 
that will support the evaluation of the agency's human capital 
strategies, through HRStat reviews, and that are aligned to support 
mission accomplishment;
    (vi) Reflect the systems and standards defined in 250.203 above, 
consistent with their agency strategic plan and annual performance 
plan, to address strategic human capital priorities and goals; and
    (vii) Address the governmentwide priorities identified in the 
Federal Workforce Strategic Priorities Report.
    (e) Each agency must participate with OPM in a Human Capital 
Strategic Review (HCSR). The HCSR will be conducted during the 
evaluation phase and OPM will issue guidance about the HCSR 
requirements.
    (f) The Chief Human Capital Officer must design, implement and 
monitor agency human capital policies and programs that--
    (i) Ensure human capital activities support merit system 
principles;
    (ii) Use the OPM designated method to identify governmentwide and 
agency-specific skills gaps;

[[Page 6474]]

    (iii) Demonstrate how the agency is using the principles within the 
Human Capital Framework (HCF) to address strategic human capital 
priorities and goals;
    (iv) Use the HRStat reviews, in coordination with the agency 
Performance Improvement Officer (PIO), to assess the agency's progress 
toward meeting its strategic and performance goals;
    (v) Implement the HRStat Maturity guidelines specified by OPM;
    (vi) Use HRStat reviews to evaluate their agency's progress;
    (vii) Establish and maintain an Evaluation System to evaluate human 
capital outcomes that is--
    (A) Formal and documented; and
    (B) Approved by OPM;
    (viii) Maintain an independent audit program, subject to full OPM 
participation and evaluation, to review periodically all human capital 
management systems and the agency's human resources transactions to 
ensure legal and regulatory compliance. An agency must--
    (A) Take corrective action to eliminate deficiencies identified by 
OPM, or through the independent audit, and to improve its human capital 
management programs and its human resources processes and practices; 
and
    (B) Based on OPM or independent audit findings, issue a report to 
its leadership and OPM containing the analysis, results, and corrective 
actions taken; and
    (ix) Improve strategic human capital management by adjusting 
strategies and practices, as appropriate, after assessing the results 
of performance goals, indicators, and business analytics.
    (g) The agency's human capital policies and programs must support 
the implementation and monitoring of the governmentwide Strategic Human 
Capital Strategy, which is published by OPM every four years, and--
    (1) Improve strategic human capital management by using performance 
goals, indicators, and business analytics to assess results of the 
human capital management strategies planned and implemented;
    (2) Ensure human capital activities support merit systems 
principles;
    (3) Adjust human capital management strategies and practices in 
response to outcomes identified during quarterly data-driven reviews of 
human capital performance to improve organizational processes; and
    (4) Use the governmentwide and agency-specific human capital 
strategies to inform resource requests (e.g., staff full-time 
equivalents, training, analytical software, etc.) into the agency's 
annual budget process.


Sec.  250.205  System metrics.

    OPM reserves the right to provide additional guidance regarding 
metrics as the need arises.


Sec.  250.206  Consequences of improper agency actions.

    If OPM finds that an agency has taken an action contrary to a law, 
rule, regulation, or standard that OPM administers, OPM may require the 
agency to take corrective action. OPM may suspend or revoke a 
delegation agreement established under 5 U.S.C. 1104(a)(2) at any time 
if it determines that the agency is not adhering to the provisions of 
the agreement. OPM may suspend or withdraw any authority granted under 
this chapter to an agency, including any authority granted by 
delegation agreement, when OPM finds that the agency has not complied 
with qualification standards OPM has issued, instructions OPM has 
published, or the regulations in this chapter. OPM also may suspend or 
withdraw these authorities when it determines that doing so is in the 
interest of the civil service for any other reason.

Subpart C--Employee Surveys

0
2. Subpart C is revised to read as follows:
Subpart C--Employee Surveys
Sec.
250.301 Definitions.
250.302 Survey requirements.
250.303 Availability of results.

Subpart C--Employee Surveys

    Authority: 5 U.S.C. 105; 5 U.S.C. 7101 note; Public Law 108-136


Sec.  250.301  Definitions.

    Agency means an Executive agency, as defined in 5 U.S.C. 105.
    Senior leaders are the heads of departments/agencies and their 
immediate leadership team responsible for directing the policies and 
priorities of the department/agency. May hold either a political or 
career appointment and is typically a member of the senior executive 
service.
    Managers are those in management positions who typically supervise 
one or more supervisors.
    Supervisors are first-line supervisors typically responsible for 
employees' performance appraisals and leave approval. Does not 
supervise other supervisors.


Sec.  250.302  Survey requirements.

    (a) Each executive agency must conduct an annual survey of its 
employees to assess topics outlined in the National Defense 
Authorization Act for Fiscal Year 2004, Pub. L. 108-136, sec.1128, 
codified at 5 U.S.C. 7101.
    (b) Each executive agency may include additional survey questions 
unique to the agency in addition to the employee survey questions 
prescribed by OPM under paragraph (c) of this section.
    (c) The 11 prescribed survey questions are listed in the following 
table:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
    (1) Leadership and Management practices that contribute to agency
                               performance
------------------------------------------------------------------------
                               My work unit has the job-relevant skills
                                necessary to accomplish organizational
                                goals.
                               Managers communicate the goals of the
                                organization.
------------------------------------------------------------------------
                    (2) Employee Satisfaction with--
------------------------------------------------------------------------
(i)..........................  Leadership Policies and Practices
                               How satisfied are you with your
                                involvement in decisions that affect
                                your work?
                               How satisfied are you with the
                                information you receive from management
                                on what's going on in your organization?
(ii).........................  Work Environment
                               The people I work with cooperate to get
                                the job done.
                               My workload is reasonable.
(iii)........................  Rewards and Recognition
                               In my work unit, differences in
                                performance are recognized in a
                                meaningful way.
                               How satisfied are you with the
                                recognition you receive for doing a good
                                job?
(iv).........................  Opportunities for professional
                                development and growth
                               I am given a real opportunity to improve
                                my skills in my organization.
                               My talents are used well in the
                                workplace.

[[Page 6475]]

 
(v)..........................  Opportunity to contribute to achieving
                                organizational mission
                               I know how my work relates to the
                                agency's goals.
------------------------------------------------------------------------

Sec.  250.303  Availability of results.

    (a) Each agency will make the results of its annual survey 
available to the public and post the results on its Web site unless the 
agency head determines that doing so would jeopardize or negatively 
impact national security. The posted survey results will include the 
following:
    (1) The agency's evaluation of its survey results;
    (2) How the survey was conducted;
    (3) Description of the employee sample, unless all employees are 
surveyed;
    (4) The survey questions and response choices with the prescribed 
questions identified;
    (5) The number of employees surveyed and number of employees who 
completed the survey; and
    (6) The number of respondents for each survey question and each 
response choice.
    (b) Data must be collected by December 31 of each calendar year. 
Each agency must post the beginning and ending dates of its employee 
survey and either the survey results described in paragraph (a) of this 
section, or a statement noting the decision not to post, no later than 
120 days after the agency completes survey administration. OPM may 
extend this date under unusual circumstances.

[FR Doc. 2016-02112 Filed 2-5-16; 8:45 am]
BILLING CODE 6325-39-P