Securities and Exchange Commission: Personnel Management Shows Improvement, but Action Needed on Performance Management System

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains a provision for GAO to report triennially on SEC's personnel management. GAO's first two reports ( GAO-13-621 and GAO-17-65 ) identified a number of challenges and included nine recommendations.

This report examines (1) employees' views on SEC's personnel management, (2) SEC's performance management system, (3) SEC's steps to improve its workforce planning processes, and (4) SEC's efforts to improve communication and collaboration. GAO surveyed a representative sample of nonexecutive SEC employees in key occupations and all senior officers in nine key divisions and offices (with response rates of 64 and 63 percent, respectively). The results of the nonexecutive employee survey are generalizable to SEC's mission-critical employees. GAO also followed up on prior recommendations, reviewed SEC documents and personnel management practices, analyzed SEC workforce data, and interviewed SEC officials.

Securities and Exchange Commission (SEC) employees in the five divisions and four offices GAO surveyed expressed positive views on some aspects of SEC's personnel management but reported concerns in other areas. For example, employees GAO surveyed generally had positive views on their direct supervisors and colleagues—81 percent of nonexecutive employees agreed that their direct supervisors had the skills and expertise to be effective managers. However, more than one-third of employees expressed concerns in areas such as performance management and favoritism. For example, 48 percent of nonexecutives disagreed that the performance management system in place at the time of GAO's review created meaningful distinctions in performance.

SEC has implemented eight of GAO's nine recommendations related to personnel management. However, SEC has not yet implemented a 2013 GAO recommendation to validate its performance management system—that is, to obtain staff input and agreement on the competencies, rating procedures, and other key aspects of the system. SEC plans to implement a new system in 2020, and validating this system would help ensure that it achieves its goals and identify changes needed to address employee dissatisfaction with performance management. In addition, a key feature of SEC's new performance management system will be a bonus program through which supervisors can nominate high-performing employees for a bonus of up to $10,000 once per fiscal year. However, SEC has not yet developed mechanisms for transparency and fairness for this new bonus program. GAO has previously highlighted the need for safeguards to better ensure fairness and transparency in performance management, particularly around systems affecting pay. Incorporating safeguards into the new bonus program—such as including multiple levels of review and publishing aggregate data on award decisions—would promote transparency and could increase employee confidence in the program.

Since GAO's most recent review in 2016, SEC has taken actions to implement a more comprehensive workforce planning process and strengthen intra-agency communication and collaboration. For example, SEC conducted a comprehensive analysis to identify skills gaps in its workforce. It also improved the link between its budget formulation process and annual meetings in which the Office of Human Resources consults with each division and office on its workforce needs and priorities. Additionally, to strengthen communication and collaboration, SEC commissioned a study to identify relevant best practices and created formal mechanisms, such as working groups, to enhance collaboration across divisions and offices. For example, in 2018, SEC created its Operations Steering Committee through which senior operational leaders throughout the agency periodically meet to coordinate on cross-agency operational issues, including those related to human capital.

SEC should develop and implement safeguards to better ensure transparency and fairness in its new incentive bonus program. SEC agreed with this recommendation. GAO also reiterates its recommendation in GAO-13-621 that SEC conduct periodic validations (with staff input) of the performance management system and make changes, as appropriate, based on these validations. SEC stated that it expects to take action on this recommendation at the end of the 2020 performance cycle.

The Securities and Exchange Commission’s (SEC) mission is to protect  investors; maintain fair, orderly, and efficient securities markets; and  facilitate capital formation. To carry out its mission, SEC requires public  companies to disclose meaningful financial and other information to the  public, examines firms it regulates, and investigates potential securities  law violations. SEC oversees more than 27,000 market participants,  including investment advisers, mutual funds and exchange-traded funds,  and broker-dealers. Effectively carrying out its regulatory responsibilities  requires that SEC attract and retain a high-quality workforce. We and  others have previously reported on the personnel management  challenges SEC has faced in building and retaining such a workforce.

Section 962 of the Dodd-Frank Wall Street Reform and Consumer  Protection Act (Dodd-Frank Act) includes a provision for us to report  triennially on SEC’s personnel management, including the competence of  professional staff; the effectiveness of supervisors; and issues related to  employee performance assessments, promotion, and intra-agency  communication. We previously reported on SEC’s personnel  management in 2013 and 2016. This report examines (1) employees’  views on SEC’s personnel management and organizational culture, (2)  SEC’s efforts to implement a performance management system, (3)  SEC’s implementation of a workforce planning process, and (4) SEC’s  steps to strengthen communication and collaboration within and across its  divisions and offices.

To obtain employee views on SEC’s personnel management and  organizational culture, we distributed two web-based surveys. One  surveyed a stratified random sample of 877 nonexecutive mission-critical  employees in mission-critical offices and divisions, and the second  surveyed all 80 senior officers in mission-critical offices and divisions.  The response rates for the surveys were 64 percent and 63 percent,  respectively. The results of our mission-critical survey are generalizable  to SEC’s mission-critical employees, but we do not attempt to extrapolate  the findings of our senior officer survey to those senior officers who chose  not to participate in the survey. To identify key issues related to SEC’s  personnel management and inform the design of these surveys, we  provided opportunities for SEC employees to meet or communicate with  us individually in a confidential manner. From November 2018 through  February 2019, we held one-on-one interviews with 51 current and 15  former employees to obtain their perspectives on SEC’s personnel  management and organizational culture. We also reviewed the Office of  Personnel Management’s (OPM) Federal Employee Viewpoint Survey  data on SEC employees, including comparing SEC’s results to  government-wide responses. We assessed the reliability of OPM’s 2018  survey data by reviewing technical documentation of the survey and  found the data to be reliable for the purpose of analyzing trends and  views on SEC personnel management practices.

To obtain information on SEC’s efforts related to performance  management, workforce planning, and communication and collaboration,  we reviewed relevant SEC documents and interviewed SEC officials in  the Office of Human Resources and other divisions and offices. We  reviewed changes SEC made to its personnel management practices  since our 2016 review, including steps taken to address our  recommendations in these areas. For example, with respect to  performance management, we reviewed documents describing the new  performance management system that SEC plans to implement in 2020.  In addition, with respect to workforce planning and efforts to strengthen  communication and collaboration, we obtained and reviewed SEC’s  Fiscal Year 2019–2022 Workforce and Succession Planning Strategy, as  well as a report by a third-party vendor on SEC’s communication and  collaboration practices. We compared SEC’s personnel management  practices against criteria identified in prior GAO reports, such as  strategies for transparent and fair performance management and key  principles for effective workforce planning. We also used SEC data  extracted from the Department of the Interior’s Federal Personnel/Payroll  System to present summary data on staff turnover, and supervisor ratios.  To determine the reliability of these data, we reviewed related  documentation, tested the data for missing data and errors, and obtained  written responses from SEC employees about data quality and control.  We found these data to be sufficiently reliable for the purpose of selecting  our survey sample of mission-critical employees and analyzing SEC’s  workforce data. Appendix II provides more information on our scope and  methodology.

We conducted this performance audit from August 2018 to December  2019 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

SEC has five Commissioners who oversee its operations and provide  final approval over staff interpretation of federal securities laws, proposals  for new or amended rules to govern securities markets, and enforcement  activities. Headed by the SEC Chairman, the Commissioners oversee five  divisions, 24 offices, and 11 regional offices. As shown in figure 1, SEC  has designated four offices and five divisions as mission-critical (i.e.,  primarily responsible for implementing SEC’s mission).

Table 1 outlines the roles and responsibilities of these mission-critical  offices and divisions.

The mission-critical offices and divisions are supported by other offices,  such as the Office of Human Resources and the Office of Financial  Management. SEC’s Office of Human Resources provides overall  responsibility for the strategic management of SEC’s personnel  management and assesses compliance with federal regulations for areas  such as recruitment, retention, leadership and staff development, and  performance management. In addition, certain divisions have internal  human resource coordinators that coordinate between the Office of  Human Resources and their respective division heads. The Office of  Human Resources reports to SEC’s Office of the Chief Operating Officer,  which in turn reports to the Office of the Chairman. The Office of Financial  Management administers the financial management and budget functions  of SEC. The Office assists the Chief Operating Officer in formulating  budget and authorization requests, monitors the use of agency resources,  and develops, oversees, and maintains SEC financial systems.

To carry out its mission, SEC employs staff with a range of skills and  backgrounds throughout the United States. As of September 2019, SEC  employed 4,369 staff. Of these, approximately 69 percent were  designated as mission-critical, and the remaining 31 percent were other  professional, technical, administrative, and clerical staff. As shown in  figure 2, the largest mission-critical occupational category is attorneys,  who make up over 50 percent of all mission-critical employees. In  addition, over 40 percent of all mission-critical employees work in one of  SEC’s 11 regional offices. The regional offices are responsible for  investigating and litigating potential violations of securities laws. The  regional offices also have enforcement and examination staff to inspect  regulated entities.

SEC staff are represented by the National Treasury Employees Union  (which we refer to in this report as the SEC employees’ union). To help  SEC attract and retain qualified employees, in 2002 Congress enacted  the Investor and Capital Markets Fee Relief Act (Pay Parity Act), which  allowed SEC to implement a new compensation system with higher pay  scales, comparable to those of other federal financial regulators.

To stay within its annual appropriation, SEC imposed a hiring freeze  beginning on October 1, 2016, and lifted it on April 1, 2019. During the  hiring freeze, SEC permitted some exceptions on a case-by-case basis to  fill positions that it determined to be critical to meeting key agency  objectives and maintaining critical programs. Based on SEC’s budget  justification documents, from October 1, 2016, through September 30,  2018, SEC lost a net total of 476 positions agency-wide, including 363  positions across its mission-critical offices and divisions. Figure 3 shows  the staffing levels in SEC’s mission-critical offices and divisions during  fiscal years 2016, 2017, and 2018.

Employees Reported Positive Aspects of SEC’s Personnel Management and Culture but Also Concerns about Performance Management and Favoritism

The results of our 2019 survey of mission-critical nonexecutive SEC  employees indicate that most employees had positive views on some  aspects of SEC’s personnel management and organizational culture,  such as the skills of their direct supervisors and colleagues. Our survey  results also indicate that employees had concerns related to SEC’s  performance management system, perceptions of a risk-averse culture,  and perceptions of favoritism in hiring and promotions. Employees had  mixed views in other areas, such as morale, communication, and training.  Finally, employees’ responses to key questions on organizational culture  in our 2019 survey generally remained consistent with the results from  our 2016 survey. See appendix III for a comparison of our 2016 and 2019  survey results for selected questions.

Employees Expressed Generally Positive Views on Their Direct Supervisors and Colleagues

Based on the results of our survey of mission-critical nonexecutive  employees, we estimate that more than 75 percent of employees had  favorable views of their direct supervisors in areas such as their skills and  expertise, how they share information, and their willingness to listen to  differing approaches (see fig. 4). In addition, we estimate that 70  percent of employees agreed that supervisors and managers in their  division or office tolerate honest mistakes as learning experiences, and  68 percent agreed that supervisors and managers in their division or  office are genuinely interested in the opinions of their staff.

Similarly, in OPM’s 2018 Federal Employee Viewpoint Survey (hereafter  referred to as OPM’s 2018 survey), SEC employees expressed positive  views about their supervisors. In that survey, more than 80 percent of  SEC employees agreed that they have trust and confidence in their  supervisor (83 percent) and that their supervisor listens to what they have  to say (88 percent) and treats them with respect (90 percent).

Our survey results also indicate that most employees had positive views  about the people SEC hires. As shown in figure 5, we estimate that 79  percent of employees agreed that their division or office is able to attract  talented and qualified employees. We also estimate that 75 percent  agreed that SEC management usually hires employees who are a good fit  for SEC’s mission. In addition, in OPM’s 2018 survey, an estimated 90  percent of all employees agreed that SEC’s workforce has the job- relevant knowledge and skills necessary to accomplish the organization’s  goals.

For OPM’s 2018 survey of SEC employees, employees responded  positively to questions related to their satisfaction with SEC as a place to  work. Based on that survey, SEC’s overall score on OPM’s Global  Satisfaction Index—which measures employee satisfaction with job, pay,  and their organization—was 82 percent, while the government-wide score  was 64 percent. In addition, SEC’s score on OPM’s Employee  Engagement Index—which measures employees’ perceptions of  leadership, interpersonal relationships between workers and supervisors,  and employees’ feelings of motivation and competency related to their  roles in the workplace—was 78 percent (compared to 68 percent  government-wide). Moreover, from OPM’s 2013 survey to the 2018  survey, SEC’s scores improved in both of these categories by more than  15 percentage points, indicating that employees’ views are improving  over time.

Survey Indicated Heightened Employee Concerns about Performance Management, Risk-Averse Culture, and Perceptions of Favoritism

More than 40 percent of employees expressed dissatisfaction with key  aspects of SEC’s performance management system. As discussed later  in this report, at the time of our survey, SEC employees covered by the  union’s bargaining unit were rated under a pilot performance  management system in which they received an initial four-tier rating,  which was converted into a final two-tier rating of acceptable or  unacceptable. Our survey results indicated areas of dissatisfaction with  this system, as shown in figure 6. For example, based on our survey, we  estimate that 48 percent of employees disagreed that the performance  management system created meaningful distinctions in performance  among employees.

Similarly, in OPM’s 2018 survey, employees also expressed concerns  about various aspects of performance management. For example, an  estimated 33 percent of employees disagreed that their work unit takes  steps to deal with poor performers, and 35 percent disagreed that  differences in performance are recognized in a meaningful way.

Our survey indicated that more than 40 percent of SEC employees  continued to have concerns about excessive risk aversion—the condition  in which the agency’s ability to function effectively is hindered by the fear  of taking on risk. We estimate that 47 percent of nonsupervisors and 48  percent of supervisors agreed that the fear of public scandal has made  SEC overly cautious and risk averse. These results were similar to our  2016 survey (46 percent of nonsupervisors and 49 percent of supervisors  agreed), which were an improvement from the results of our 2013 survey.  In addition, as shown in figure 7, about 40 percent of SEC employees  agreed that the fear of being wrong makes senior officers in their division  or office reluctant to take a stand on important issues.

As we reported in 2013, changes to organizational culture, including  reducing excessive risk aversion, require sustained efforts by senior  management. Responses to other questions on our survey suggest that  managers support the types of activities that may help reduce excessive  risk aversion. For example, an estimated 60 percent of employees agreed  that innovative ideas are encouraged in their division or office. Also, as  noted above, we estimate that 70 percent of employees agreed that their  supervisors and managers tolerate honest mistakes as learning  experiences.

Our survey results suggest that a quarter of employees had concerns  about favoritism in SEC’s hiring process, and more than a third had such  concerns about its promotion process. With respect to hiring, we  estimate that 25 percent of employees agreed that hiring is sometimes  based more on personal connections than on substantive experience and  qualifications. With respect to promotions, as shown in figure 8, we  estimate that 35 percent of nonsupervisory staff disagreed that promotion  to management is based more on substantive experience than on  favoritism and that favoritism is not an issue in promotions.

A lack of clarity in the hiring and promotion processes may have  contributed to employees’ perceptions related to favoritism. Based on our  survey results, an estimated 50 percent of employees disagreed that the  criteria for rewarding and promoting staff are clearly defined. Later in  this report we discuss the steps SEC has taken to improve its promotion  and hiring policies.

Employee Views on Morale Were Mixed, and Their Views on Communication and Training Varied by Division

While OPM’s 2018 survey results indicated that SEC employees largely  had positive views about SEC as a place to work, the results of our 2019  survey of mission-critical nonexecutive employees indicate that the recent  hiring freeze may have negatively impacted their views on morale. Based  on our survey, we estimate that 37 percent of employees disagreed that  morale is generally high most of the time, as shown in figure 9. In  addition, based on our survey, we estimate that 63 percent of employees  believed the recent hiring freeze had a negative impact on morale,  including 31 percent who believed the negative effect was large.

Over 60 SEC employees provided written survey comments related to  morale. Some employees who provided written comments cited other  concerns that had a negative impact on morale. For example, some  employees stated that low pay increases and the lack of merit pay have  contributed to low morale among high-performing employees. Some  employees also noted that the 2019 government shutdown had a  negative impact on morale by implying that federal employees’ work is not  valuable.

Most employees expressed positive views on whether cross-divisional  communication is encouraged, but employees in some offices and  divisions had concerns about communication within their division or office.  Specifically, an estimated 66 percent of employees agreed that  communication with other divisions and offices on work-related matters is  encouraged. These survey results are generally consistent with SEC’s  results on OPM’s 2018 survey, in which an estimated 73 percent of  employees agreed that managers support collaboration across work units  to accomplish work objectives, and an estimated 69 percent agreed that  managers promote communication among different work units.

However, in our survey, we found that some employees had more  negative views about communication within divisions and offices. For  example, we estimate that 34 percent of employees disagreed that  information and knowledge are openly shared at all levels within their  division or office, and 27 percent of employees disagreed that SEC  management ensures employees are included in the flow of relevant  information. As shown in figure 10, these figures were highest for  employees in the Division of Corporation Finance and the Office of  Information Technology.

Most SEC employees expressed positive views on SEC’s commitment to  training and the extent to which their training provided the skills and  experience to meet SEC’s needs (see fig. 11).

However, our survey results indicated heightened concerns about the  number of training opportunities with outside instructors in some divisions  and offices. While we estimate that 76 percent of employees reported that  there were opportunities to participate in training that provided the latest  industry-specific knowledge with outside instructors, we estimate that  more than 30 percent of employees in several offices and divisions  indicated that the number of such opportunities was less than adequate  (see fig. 12). These concerns were highest in the Office of Information  Technology, where more than half of the staff viewed such training  opportunities as less than adequate.

SEC Senior Officers Generally Had Favorable Views of SEC’s Personnel Management and Organizational Culture

We administered a separate survey to 80 SEC senior officers in mission- critical offices and divisions, and 50 provided responses. Respondents  generally had favorable views on issues such as hiring and retaining  talent, communication, training, and morale. For example, 90 percent of  senior officers we surveyed said their division or office is able to attract  talented and qualified employees and that information is adequately  shared across groups in their division or office. In addition, 82 percent  agreed that morale is generally high most of the time. However, similar to  nonexecutive employees, senior officers expressed concern about SEC’s  performance management system. For example, 70 percent disagreed  that current performance incentives were effective tools to motivate  employees to perform well, and 50 percent disagreed that SEC’s  performance management system provides consistent standards for  rewarding performance.

Concerns about SEC’s Performance Management System Persist

SEC Has Not Addressed GAO’s Recommendation to Periodically Validate Its Performance Management System

Since 2013, SEC has twice redesigned its performance management  system without periodically validating it, as we recommended in 2013.  Validating the system typically refers to obtaining staff input and general  agreement on the competencies, rating procedures, and other aspects of  the system. In our 2013 report, we found that SEC’s performance  management system reflected many elements of OPM’s guidance but  that implementation of the system could be improved. Also, consistent  with best practices, we recommended that SEC conduct periodic  validations, with staff input, of the performance management system and  make changes as appropriate based on these validations. SEC agreed  with our recommendation.

In fiscal year 2016, SEC began to pilot a new performance management  system with a four-tier rating scale. According to SEC officials, the four- tier rating system for non-bargaining-unit employees was fully  implemented in 2017 and continued as a pilot in fiscal years 2017, 2018,  and 2019 for bargaining unit employees. However, SEC did not validate  this system. In our 2016 report, we reiterated the importance of our 2013  recommendation and emphasized that SEC should only make changes to  its performance management system based on validations and staff  feedback. Despite plans to survey all employees to validate the  agency’s pilot performance management system and obtain employee  feedback in fiscal years 2017 and 2018, SEC officials said they have  been unable to do so, in part because they could not reach agreement  with the SEC employee union on the planned survey questions.

SEC and the union agreed in November 2018 that SEC will implement  another new performance management system, including a new incentive  bonus program, in 2020. Because SEC did not validate the four-tier  system it was piloting, it missed an opportunity to obtain employee input  to inform the design of the new system. Under the new system, all SEC  employees will be evaluated on a two-tier rating scale: “accomplished  performer” and “unacceptable.” In addition, SEC plans to implement a  new incentive bonus program that will provide opportunities for high- performing employees to earn a bonus of up to $10,000 once per fiscal  year.

According to SEC officials, SEC plans to work with OPM to validate the  new performance management system by surveying staff on the new  system at the conclusion of the 2020 appraisal period, after which OPM  will submit a final assessment of the program with any recommended  actions for SEC. These plans are consistent with our 2013  recommendation that SEC should conduct periodic validations of its  performance management system. However, until SEC completes its  planned activities, this recommendation remains unaddressed.

The negative views expressed by many employees in our survey  underscore the need for SEC to validate its performance management  system. As discussed earlier, more than 40 percent of employees were  dissatisfied with key aspects of SEC’s performance management system,  such as the extent to which the performance management system  created meaningful distinctions in performance among employees. In  addition, based on our survey, we estimate that 30 percent of SEC  employees disagreed that SEC’s performance management system uses  relevant criteria to evaluate their performance. Validating the new  performance management system with staff input should help SEC better  ensure that it is achieving its goals and identify any changes needed to  address employee dissatisfaction with performance management.

SEC Has Not Developed Mechanisms to Ensure Transparency and Fairness in New Performance Bonus Program

In prior work, we reported that effective performance management  requires that the organization’s leadership make meaningful distinctions  between acceptable and outstanding performance of individuals and  appropriately reward those who perform at the highest level. In addition,  our prior work on strategies federal agencies can use to manage  performance-oriented pay systems has shown the need for agencies to  build in safeguards to enhance transparency and ensure the fairness of  pay decisions. One such safeguard is to include multiple levels of  review of performance ratings and pay decisions to ensure consistency  and fairness in the process and the resulting decisions. Another  safeguard is to publish aggregate data on the results of the performance  cycle, which allows employees to compare results across various groups  within the agency while protecting the confidentiality of individual ratings  and pay decisions.

SEC has not yet developed mechanisms for transparency and fairness for  its new performance incentive bonus program. Under the program, a  supervisor may nominate an employee who demonstrates exceptional  performance according to certain criteria to receive a bonus payment of  up to $10,000 once per fiscal year. SEC officials told us that specific  policies and procedures for the bonus program were still being developed  at the time of our review, but they could not provide details on how they  planned to ensure transparency and fairness in implementing the  program. Moreover, as of November 2019, SEC had not provided  detailed policies and procedures, nor had it established a date by which  such policies and procedures would be finalized, despite its goal of  implementing the new program in January 2020.

Developing and implementing adequate safeguards could increase  employees’ confidence in the new performance incentive bonus program.  Without adequate safeguards to enhance transparency and better ensure  fairness, employee dissatisfaction with performance management may  persist and could undermine the credibility of the new bonus program.

SEC Has Implemented a More Comprehensive Approach to Workforce Planning and Improved Hiring and Promotion Practices

SEC’s New Workforce and Succession Planning Processes Address Previously Identified Weaknesses

SEC has taken action to fully implement the two recommendations from  our 2013 report related to developing and implementing a comprehensive  workforce and succession planning process that is consistent with OPM  guidance. In our 2016 report, we found that SEC had developed a  workforce and succession plan in response to these recommendations.  However, we identified weaknesses with this plan, such as the lack of a  comprehensive skills gap analysis to help ensure that employees across  all occupations have the skills necessary to fulfill SEC’s mission. Since  our 2016 review, SEC completed a more comprehensive skills gap  analysis and began to implement new workforce and succession planning  processes that address other weaknesses we had identified.

In fiscal year 2019, SEC developed and began to implement a new  workforce planning strategy that outlined new processes for workforce  and succession planning. SEC’s previous process focused on creating a  consolidated workforce plan in a single document that focused on five  divisions and two offices, accounting for 67 percent of SEC employees.  SEC officials told us that the new process is more dynamic and  responsive because it provides more workforce data to officials in the  divisions and offices. Specifically, SEC developed various human capital  dashboards that provide the Office of Human Resources and agency  leaders with up-to-date data on the state of the agency’s workforce, such  as data on hiring, attrition, skill gaps, and other workforce  demographics.

Key components of SEC’s new workforce and succession planning  processes address weaknesses identified in our prior work:

Skills gap analysis. Our 2016 review found that SEC’s workforce  plan lacked a comprehensive skills gap analysis covering all SEC  occupations. In 2018, SEC conducted an agency-wide competency  survey to identify skills gaps by position in each division and office.  SEC incorporated the results of this survey into one of its human  capital dashboards that allows users to interact with the data directly.  Specifically, SEC’s Workforce Competency Dashboard provides  competency data (including gaps) across offices and divisions,  allowing users to explore critical skill gaps by competency. According  to SEC’s workforce planning strategy, divisions and offices can use  the data to address skill gaps through activities such as training,  hiring, and knowledge sharing. For example, to address an identified  gap in written communication and critical thinking for newly hired  investigative attorneys, the Division of Enforcement and the Office of  Human Resources developed interview questions to better screen for  these skills during the hiring process.

Human capital reviews. We also found in 2016 that SEC’s workforce  plan was not clearly linked to its budget formulation and did not inform  decision-making about the structure of the workforce. Under its new  workforce planning process, SEC links its workforce planning to its  budget through annual human capital reviews in which divisions and  offices work with the Office of Human Resources to identify workforce  needs and priorities to directly inform their operating plans and budget  requests. These human capital reviews include discussions about the  capacity and capability of the organization to meet current mission  needs and whether areas of the workforce need to be reshaped to  meet SEC’s mission. SEC officials told us that under SEC’s previous  workforce planning process, these reviews were conducted  concurrently with budget meetings, whereas under its new process  these meetings are conducted prior to the budget meetings. This  change allows divisions and offices to use the information from the  review meetings to prepare for their budget meetings. In addition, the  human capital review meetings are informed by data maintained in  SEC’s new Workforce Supply Dashboard, which provides information  on the composition and demographics of SEC divisions and offices  and allows users to view data on hiring, attrition, and other workforce  indicators. For example, through this process, SEC recently  determined that it had an excess of certain positions, such as clerks  and assistants responsible for data processing and management. This  determination led SEC to request permission from OPM for a targeted  early retirement authority and incentives for individuals in such  positions.

New succession planning processes. In 2016, we found that SEC’s  succession planning lacked information on workforce attrition and a  fair and accurate process for identifying future leaders. Under SEC’s  new succession planning process, the Office of Human Resources  tracks senior-level turnover to determine the level of attrition at senior  leadership levels and to determine whether SEC is filling these  positions internally or externally. In addition, the Office of Human  Resources created a standardized template that managers in each  division and office use to identify key leadership positions and  candidate pools. According to SEC, this more standardized approach  offers an extra level of precision and rigor to identify the specific  leadership strengths and risks across the largest divisions and offices.  In addition, since our 2016 report, SEC has improved processes for  analyzing its talent pool for new leaders. In 2017, the Office of Human  Resources surveyed employees to gauge their interest and intent in  progressing to higher levels of management responsibility, including  to the senior officer ranks. SEC is also developing a centralized  program to screen and select a cohort of high-potential leaders who  will be certified and available to fill senior officer positions as they  become vacant. SEC officials said they anticipate the program will be  launched in the second half of fiscal year 2020.

The processes and tools described above are still new, and SEC is  continuing to integrate and develop them fully. For example, 2019 was  the first year SEC used its new workforce planning process, and SEC  officials told us that senior officers are still learning how they can best use  new tools, such as the new human capital dashboards. One SEC official  told us that SEC is still refining this new approach and plans to consider  additional enhancements to the dashboards, such as including more  forward-looking data to inform discussions of future workforce needs.  Although SEC continues to enhance its new process and practices, the  actions it has taken fully implement our two 2013 recommendations.

SEC Has Improved Hiring and Promotion Practices

SEC has taken steps to improve certain practices related to hiring and  promotions. For example, in 2016, we found that SEC had not identified  skills gaps among its hiring specialists and that these staff received  limited training. As a result, SEC lacked assurance that its hiring specialists had the necessary skills to hire and promote the most qualified  applicants. We recommended that SEC develop and implement training  for hiring specialists that is informed by a skills gap analysis. In response  to our recommendation, SEC’s Talent Acquisition Group partnered with  SEC’s training group to conduct a competency gap assessment for each  of the Talent Acquisition Group’s five primary jobs. Based on the results  of this competency assessment, in 2018 SEC developed and prioritized a  2-year training plan for hiring specialists to address the identified skills  gaps and to better enable SEC to recruit, develop, and retain competent  staff. This skills gap analysis and the new training curriculum for hiring  specialists fully address our 2016 recommendation.

SEC also made changes to policies for promotion announcements to  improve perceptions of fairness and transparency. For example, since  2016, a promotion opportunity can be limited to applicants within a single  division or office only if that division or office has at least 15 eligible  candidates. If there are fewer than 15, the announcement must be  opened more broadly to candidates in SEC beyond that particular office  or division. In addition, SEC now requires that promotion announcements  be open for a minimum of 10 business days.

To Enhance Communication, SEC Has Identified Best Practices and Established Cross- Divisional Working Groups

SEC has fully addressed recommendations we made in 2013 and 2016 to  improve intra-agency communication and collaboration:  Incentives for staff to communicate and collaborate. In 2013, we  found that SEC had made efforts to improve communication and  collaboration but had not fully addressed barriers to an environment of  open communication. We recommended that the SEC Chief Operating  Officer identify and implement incentives for all staff to support an  environment of open communication and collaboration. We determined  that this recommendation had been fully implemented in November 2017.  Among other steps, in 2016 SEC revised its performance expectations for  supervisors to encourage communication and collaboration and  proactively share relevant information.

Best practices for communication and collaboration. In 2013, we  recommended that SEC explore communication and collaboration best  practices and implement those that could benefit SEC. SEC has taken  action to fully implement this recommendation. Specifically, SEC’s Office  of the Chief Operating Officer engaged a third-party management  consultant team to complete a study of best practices for communication  and collaboration, which was completed in 2018. For the study, the  consultants developed a framework of best practices recognized in the  public and private sectors and assessed SEC’s practices against the  framework. The consultants found that each of the best practices in its  framework was met by at least one of SEC’s activities, tools,  technologies, or initiatives. The report included eight recommendations to  help address barriers to cross-division communication and collaboration,  among other goals. In response to these recommendations, as of May  2019, SEC had taken action on six recommendations and developed  planned actions for the remaining two. For example, to facilitate staff-to- staff communication and collaboration, SEC officials updated the intranet  sites of each mission-critical office and division with main contact  telephone numbers and staff directories. In addition, SEC plans to pilot an  electronic communication tool for project execution among teams  collaborating across divisions and offices that will provide more  functionality than SEC’s current application.

Cross-divisional committees and working groups. In 2016, we noted  that the lack of a central position or office with authority over the daily  operations of all divisions and offices made it difficult to address  challenges related to communication and collaboration. We  recommended that SEC enhance or expand the responsibilities and  authority of the Chief Operating Officer or another official or office to help ensure that improvements to communication and collaboration across  SEC were made. While SEC disagreed with this recommendation, it has  taken actions that meet the intent of our recommendation.

First, SEC created cross-divisional committees and working groups that  help to enhance intra-agency communication and collaboration. For  example, in 2018, SEC created an Operations Steering Committee, which  consists of senior operational leaders throughout the agency who meet  on a regular basis to discuss and collaborate on cross-agency operational  issues, including those related to human capital. SEC also created other  formal intra-agency committees and working groups, including an  Information Technology Capital Planning Committee, an Emerging Risk  Group, and a Data Management Board.

Second, between 2009 and 2018, SEC established Managing Executive  positions in the Office of the Chairman and in eight of its nine mission- critical offices and divisions. Managing Executives are responsible for  working closely with one another, including serving together on intra- agency working groups, to facilitate effective internal collaboration on  operations issues, including personnel management. The Managing  Executive in the Office of the Chairman, established in 2017, acts as a  liaison between the Chairman’s office and the various committees and  working groups. According to an agency official, having a Managing Executive position in the Office of the Chairman helps ensure that  someone from the Chairman’s office has the time to devote to operational  issues.

SEC has taken a number of actions since 2016 to strengthen its  personnel management. It has implemented a more comprehensive  approach to workforce planning and improved intra-agency  communication and collaboration through new working groups and  implementation of best practices. OPM’s 2018 employee survey also  suggests that employee satisfaction at SEC has improved.

Despite this progress, SEC has yet to validate its performance  management system since we recommended it do so in 2013. Without  such validation, SEC may lack information that could help it identify  changes needed to address employee dissatisfaction and ensure its  system achieves its goals. We therefore reiterate our 2013  recommendation that SEC conduct periodic validations, with staff input, of  the performance management system and make changes as appropriate  based on these validations. Consistent with our recommendation, SEC  officials stated they plan to work with OPM to validate the new  performance management system. However, until SEC completes its  validation of the new system, which it plans to do at the conclusion of the  2020 appraisal period, this recommendation remains unaddressed.

Finally, a key feature of SEC’s new performance management system will  be a performance incentive bonus program through which SEC  supervisors will be able to nominate individual employees for a bonus of  up to $10,000 once per fiscal year. Our prior work on performance  management has highlighted the importance of safeguards that can help  ensure that agencies’ performance management systems—and  particularly the systems affecting pay—are fair and transparent. At the  time of our review, SEC was in the process of designing the performance  incentive bonus program and did not provide us with detailed policies or  procedures. As SEC works to finalize procedures for this bonus program,  incorporating safeguards such as multiple levels of review of performance  ratings and pay decisions can help to promote employee confidence in  the integrity of the program.

The Chair of the Securities and Exchange Commission should direct the  Chief Operating Officer to develop and implement safeguards to better  ensure transparency and fairness in SEC’s new performance incentive  bonus program. Such safeguards could include multiple levels of review  of performance ratings and pay decisions and publishing aggregate data  on the results of the performance cycle that allow employees to compare  results across various groups within the agency while protecting the  confidentiality of individual ratings and pay decisions. (Recommendation  1)

We provided SEC a draft of this report for its review and comment. SEC  provided written comments that are reprinted in appendix VI. SEC also  provided technical comments that we incorporated, as appropriate.

In its written comments, SEC stated that it concurred with, and plans to  implement, our recommendation to develop and implement safeguards to  better ensure transparency and fairness in its new performance incentive  bonus program. SEC stated that it appreciated our suggested practices,  and that it will conduct research to consider additional safeguards.

SEC also highlighted its implementation of eight of nine of our previous  recommendations related to personnel management. SEC noted its  progress in the areas of workforce planning and intra-agency  communication and recognized that further work remains to be done.  With respect to our 2013 recommendation that it conduct periodic  validations of the performance management system, which SEC has not  yet implemented, SEC stated that it expects to obtain feedback from  employees and managers at the conclusion of the 2020 performance  cycle to identify further improvements, and that it is committed to  conducting periodic evaluations of its system in the future. We will  continue to monitor SEC’s progress toward implementing this  recommendation.

We are sending copies of this report to the appropriate congressional  committees, the Chairman of the Securities and Exchange Commission,  and other interested parties. In addition, the report is available at no  charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at 202-512-8678 or clementsm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix VII.

Appendix I: Status of GAO’s 2013 and 2016 Personnel Management Recommendations to the Securities and Exchange Commission

Table 2 provides the status of recommendations we made to the  Securities and Exchange Commission in 2013 and 2016.

Appendix II: Objectives, Scope, and Methodology

This report examines (1) employees’ views on the Securities and  Exchange Commission’s (SEC) personnel management and  organizational culture, (2) SEC’s efforts to implement a performance  management system, (3) SEC’s implementation of a workforce planning  process, and (4) SEC’s steps to strengthen communication and  collaboration within and across its divisions and offices.

Analysis of Employees’ Views on SEC’s Personnel Management and Organizational Culture

To examine employees’ views on SEC’s personnel management and  organizational culture, we conducted two surveys of SEC staff, performed  a content analysis of open-ended responses to our surveys, and  conducted individual interviews.

Surveys. To obtain employees’ views on SEC’s personnel management  and organizational culture, we implemented two web-based surveys from  March 2019 to May 2019. We administered the first survey to a stratified  random sample of 877 nonexecutive employees in mission-critical  occupations in mission-critical offices and divisions. We administered the  second survey to all 80 senior officers in mission-critical offices and  divisions.

To determine our sample of nonexecutive employees, we stratified the  population of mission-critical SEC employees into sampling strata by  office and division to help mitigate the risk that a particular part of SEC  could be over- or underrepresented by the respondents to our survey. We  stratified the Division of Enforcement and the Office of Compliance  Inspections and Examinations into two further categories (“headquarters”  and “regional office”) because this division and office have a majority of  their staff located in one of SEC’s 11 regional offices. Table 3 shows the  total number of employees and the number of employees selected in our  sample for each of the strata. Due to their small employee counts, we  combined the Offices of the Chief Accountant and Credit Ratings into one  stratum for the purpose of selecting the sample. Prior to selecting the  sample, we sorted the sample frame by supervisory status within each  stratum. We then selected the sample via systematic random sampling  within each stratum. Our initial sample size allocation was designed to  achieve a stratum-level margin of error no greater than plus or minus 8  percentage points at the 95 percent level of confidence. Based upon our  prior surveys on SEC’s personnel management, we assumed a response  rate of 70 percent to determine the sample size for the mission-critical  employees. Because some employees left SEC between the time we  obtained a list of SEC employees and the launch of the survey, the final  sample size decreased from 884 to 877.

Because we followed a probability procedure based on random  selections, our sample is only one of a large number of samples that we  might have drawn. Since each sample could have provided different  estimates, we express our confidence in the precision of our particular  sample’s results as a 95 percent confidence interval. This is the interval  that would contain the actual population value for 95 percent of the  samples we could have drawn. We provide confidence intervals along  with each sample estimate in the report. All survey results presented in  the body of this report are generalizable to the estimated population of  2,907 in-scope mission-critical employees at SEC as of September 30,  2018.

For our survey of nonexecutive employees in the mission-critical offices  and divisions, 563 nonsupervisors and supervisors responded to our  survey, for a response rate of 64 percent. For our survey of all mission- critical senior officers, 50 responded to our survey, for a response rate of  63 percent. For the nonexecutive survey, we carried out a statistical  nonresponse bias analysis using available administrative data and  determined that the results are generalizable to SEC’s mission-critical  employees. We do not attempt to extrapolate the findings of our senior  officer survey to those who chose not to participate.

Each GAO survey of SEC staff included questions on personnel  management issues related to (1) recruitment, training, staff  development, and resources; (2) communication among and within  divisions and offices; (3) leadership and management; (4) performance  management and promotions; and (5) organizational culture and climate.  The separate survey of all mission-critical SEC senior officers (those at  the SO-1, SO-2, and SO-3 pay grades) covered the same topic areas but  omitted questions not relevant to senior officers and included additional  questions specifically relevant to senior officers. Our surveys included  both multiple-choice and open-ended questions. We analyzed the results  of our 2019 survey of supervisory and nonsupervisory staff and senior  officers, and we compared the results to results of similar surveys we  conducted in 2013 and 2016. In addition, we reviewed the Office of  Personnel Management’s (OPM) 2018 Federal Employee Viewpoint  Survey results to obtain additional perspectives from SEC staff on issues  related to the agency’s personnel management and to compare SEC’s  results to government-wide responses.

To minimize certain types of errors, commonly referred to as nonsampling  errors, and enhance data quality, we employed recognized survey design  practices in the development of the questionnaires and the collection,  processing, and analysis of the survey data. To develop our survey  questions, we drew on prior GAO SEC personnel management surveys.  For both of our 2019 surveys, we took steps to ensure that survey  questions from 2016 were still relevant and to determine if new issues  warranted new questions. To do this, we reviewed information from  individual interviews with current and former employees, met with five  mission-critical employees to pretest the nonexecutive survey, and met  with two senior officers to obtain their feedback on the senior officer  survey. As a result of these meetings, for example, we added three  questions related to the impact of SEC’s hiring freeze on personnel  management.

In addition, a GAO survey expert reviewed and provided feedback on our  survey instrument. To reduce nonresponse, another source of  nonsampling error, we sent multiple emails encouraging SEC employees  to complete the surveys, and we made telephone calls to nonrespondents  to encourage participation and troubleshoot any logistical issues in  accessing the questionnaire. We also had respondents complete  questionnaires online to eliminate errors associated with manual data  entry. On the basis of our application of these practices and follow-up  procedures, we determined that the survey data were of sufficient quality  for the purpose of obtaining employees’ views on SEC’s personnel  management and organizational culture.

Content analysis. To analyze the information we obtained from the  open-ended survey responses, we conducted a content analysis on the  633 responses to the six open-ended survey questions from the survey of  the mission-critical offices and divisions. Five staff members developed  coding categories based on our researchable objectives, information  collected during our individual interviews, and the findings from our  December 2016 report. Coding categories were as follows: (1) workforce  management, (2) communication, (3) management, (4) promotions, (5)  performance management, and (6) risk aversion. For each of the  responses to the six open-ended questions, a GAO analyst categorized  the response into the respective coding categories. A second GAO  analyst reviewed the coding, and any disagreements in the coding were  resolved through discussion or with a third analyst.

Individual interviews. We interviewed 51 nonsupervisory and  supervisory employees—in person at SEC headquarters and by  telephone for those in headquarters and regional offices—in November  and December 2018 to obtain their views on personnel management at  SEC. Using information provided by SEC, we sent 577 letters to all  employees who separated from SEC between March 2016 and  November 2018, offering them an opportunity to schedule a meeting with us. We interviewed 15 of these former SEC employees by phone in  January and February 2019. We asked certain questions of every person  we interviewed related to (1) what personnel management practices were  working well, (2) what challenges existed in personnel management, and  (3) what initiatives, if any, SEC had taken to address these challenges. To  maintain the confidentiality of individual responses, we did not record  individual names in our transcripts. Instead, we collected and analyzed  the information by division and rank only, and we aggregated our findings  so that no individual comments could be identified. GAO analysts  summarized themes that emerged from these individual interviews and  used them to identify key issues related to SEC’s personnel management  and inform the design of our surveys.

Review of SEC Personnel Management Practices

To obtain information on SEC’s efforts related to performance  management, workforce planning, and communication and collaboration,  we reviewed relevant SEC documents and interviewed SEC officials in  the Office of Human Resources and other divisions and offices. We  reviewed changes SEC made to its personnel management practices  since our 2016 review, including steps taken to address our  recommendations in these areas.

We interviewed SEC staff from the Office of Human Resources about the  status of SEC’s efforts to pilot and implement a performance  management system, including the status of SEC’s efforts to address our  2013 recommendation that SEC conduct periodic validations of its  performance management system and make changes, as appropriate,  based on these validations. We also reviewed documents describing  changes to SEC’s performance management system. At the time of our  review, SEC had plans to implement a new performance management  system, including a new incentive bonus program, in January 2020 but  had not yet completed detailed policies and procedures to implement this  new system. However, we compared the system’s key features with  criteria identified in prior GAO work, including work on strategies federal  agencies can use for fair and transparent performance management. In  addition, we reviewed the SEC Office of Inspector General’s 2018 report  that described progress and challenges in the agency’s performance  management efforts.

To examine SEC’s workforce and succession planning practices, we  obtained and reviewed a copy of SEC’s fiscal year 2019–2022 Workforce  and Succession Planning Strategy, which outlines new approaches to  workforce and succession planning that SEC began to implement in fiscal  year 2019. We also obtained and reviewed documentation of SEC’s  implementation of key steps in its workforce and succession planning  processes, such as the survey instrument used to identify skill gaps for all  SEC occupations, slide presentations of SEC divisions’ operating plans  and budget requests that are informed by human capital review meetings,  examples of action plans SEC divisions and offices developed to address  identified skill gaps, SEC’s Succession Planning Tool Kit, and relevant  training plans for SEC divisions.

In addition, we attended an SEC-led demonstration of the agency’s new  human capital dashboards, which are interactive software tools that  provide the Office of Human Resources and agency leaders with up-to- date data on the state of the agency’s workforce, such as data on hiring,  attrition, skill gaps, and other workforce demographics. We also  interviewed staff from SEC’s Office of Human Resources and senior  leaders from different SEC divisions. We compared SEC’s workforce  planning process against key principles for effective workforce planning,  and we assessed SEC’s efforts to strengthen its workforce and  succession planning efforts to determine the extent to which they  addressed our 2013 recommendations related to developing a more  comprehensive approach to workforce and succession planning. This  assessment included reviewing the extent to which key components of  SEC’s workforce and succession planning processes aligned with OPM  standards on workforce and succession planning.

In addition, we reviewed the changes SEC made to its hiring and  promotion policies since our last review, including the steps SEC took to  address our 2016 recommendation related to developing and  implementing training for hiring specialists that is informed by a skill gap  analysis.

To examine steps SEC has taken to strengthen intra-agency  communication and collaboration, we assessed SEC’s efforts to address  prior recommendations in this area. Specifically, we reviewed a report by  a third-party vendor on communication and collaboration practices at the  agency and met with the vendor’s program manager. We also obtained  and reviewed documentation of SEC’s actions to implement  recommendations included in the vendor’s report. In addition, we  reviewed documentation related to SEC’s cross-divisional committees  and working groups, including the charter of SEC’s Operations Steering  Committee, a cross-agency group chaired by the Chief Operating Officer  whose purpose is to facilitate predecisional communications on significant  cross-agency operational issues. To obtain information on the  effectiveness of SEC’s efforts to enhance communication and  collaboration, we also met with senior leaders from SEC’s largest offices  and divisions, as well as selected members of SEC’s Operations Steering  Committee.

We assessed the reliability of all of the data we used during this review  and determined they were sufficiently reliable for the purposes of  selecting our survey sample; developing summary tables on staffing  ratios and turnover; and describing trends and views on personnel  management practices at SEC. We used SEC data extracted from the  Department of the Interior’s Federal Personnel/Payroll System to  construct the sample frames for our two surveys and develop summary  tables in our appendixes. To determine the reliability of these data, we  reviewed related documentation, tested the data for missing data and  errors, and obtained written responses from SEC employees about data  quality and control. To assess the reliability of the Federal Employee  Viewpoint Survey data, we reviewed technical documentation of the  survey and conducted routine data checks.

We conducted this performance audit from August 2018 to December  2019 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

Appendix III: Employee Views on Selected Survey Questions from GAO’s 2013, 2016, and 2019 Surveys

Figure 13 below shows the results of eight questions related to personnel  management and organizational culture from our 2013, 2016, and 2019  surveys of Securities and Exchange Commission (SEC) employees in  mission-critical occupations in mission-critical divisions and offices.  However, there are important limitations in comparing the results of our  2019 survey to the previous surveys.

First, while the results of our 2019 survey were generalizable to all  mission-critical nonexecutive employees, the results of our 2013 and  2016 surveys were not.

Second, while we present the results for mission-critical employees  for each year, for our 2019 survey, we changed the definition of  mission-critical to reflect changes SEC had made to its mission-critical  designations. The divisions, offices, and occupational categories  largely remained the same across the 3 survey years with the  following exceptions: for our 2019 survey, the Offices of Information  Technology, Credit Ratings, and the Chief Accountant were added to  the category of mission-critical offices and divisions. In addition,  financial analysts were removed and information technology  specialists were added to our list of mission-critical occupations.

Third, while we administered the 2019 survey to a representative  sample of mission-critical employees, we administered our 2013 and  2016 surveys to all mission-critical employees. As such, we present  our 2019 results as estimated percentages with bands representing  the range of results within a 95 percent confidence interval.

Finally, when comparing our 2019 results on these eight questions to  the 2016 survey results, we found that employees’ views on these  questions were generally within the confidence intervals of the 2019  results. In these cases, we cannot conclude whether the changes are  statistically significant. Overall, employees’ views on whether there is  an atmosphere of trust improved since our 2016 survey.  Nonsupervisory employees’ views on whether the criteria for  promotion are clearly defined and whether information is adequately  shared across groups in their division or office also improved.  However, for the remaining survey questions, we could not conclude  whether employees’ views improved or worsened because changes in  employees’ views were within the confidence intervals or were only  seen on either the “agree” or “disagree” side of the survey scale, not  both.

Appendix IV: Ratios of Securities and Exchange Commission Supervisors and Senior Officers, Fiscal Years 2008–2018

Section 962 of the Dodd-Frank Wall Street Reform and Consumer  Protection Act included a provision for us to review whether there is an  “excessive number of low-level, mid-level, or senior-level managers” at  the Securities and Exchange Commission (SEC). We did not identify any  standards that have been established for evaluating excessive numbers  of supervisors. Therefore, we are reporting on the ratio of SEC  employees at the various levels for fiscal years 2008 through 2018 in  mission-critical offices and divisions. Table 4 illustrates the ratio of  nonsupervisors to supervisors at SEC. Table 5 illustrates the ratio of  nonsupervisors to senior officers, and table 6 illustrates the ratio of  supervisors to senior officers.

Appendix V: Percentage of Staff Who Left the Securities and Exchange Commission, Fiscal Years 2008–2018

Section 962 of the Dodd-Frank Wall Street Reform and Consumer  Protection Act included a provision for us to review turnover rates within  Securities and Exchange Commission (SEC) subunits. While staff  turnover rates could be used to identify potential areas for improvement  and further develop current supervisors, turnover may not be a good  indicator of poor supervision for several reasons. For example, staff may  leave to pursue opportunities with a different employer or a different  career path, or for personal reasons. Tables 7 and 8 show the percentage  of staff who left SEC from fiscal years 2008 through 2018 from  headquarters and the 11 regional offices, respectively. Table 9 shows the  total number of staff who left SEC during the same period.

Appendix VI: Comments from the Securities and Exchange Commission

Appendix VII: GAO Contact and Staff Acknowledgments

In addition to the contact above, John Fisher (Assistant Director),  Charlene J. Lindsay (Analyst-in-Charge), Grzegorz (Greg) Borecki, Carl  Barden, Pamela Davidson, Jill Lacey, Marc Molino, Kirsten Noethen,  Shannon Smith, Jennifer Schwartz, Benjamin Wiener, and Jason  Wildhagen made key contributions to this report.

The Securities and Exchange Commission works to protect investors and maintain fair, orderly, and efficient securities markets. To do so, it needs to attract and retain a high-quality workforce.

SEC has strengthened its personnel management practices in workforce planning and other areas, but it has not implemented our 2013 recommendation to validate its performance management system by obtaining staff input and agreement on key aspects of the system.

We reiterated this recommendation and also recommended that SEC develop procedures to ensure transparency and fairness in a new performance bonus program it plans to implement in 2020.