Each employee will be compensated with the amount money they would have received with the highest rating.

The CFPB spokesperson said the bureau intends to complete the remediation process by the end of September, which is expected to cost between $5 million and $5.5 million.

"We are continuing to examine the root causes of the disparities we found. But based on our work to date, it is clear that there was no single factor that caused this result. We also are taking the initiative to address and remedy the disparities that our system created," CFPB Director Richard Cordray wrote in a May 19 email to employees.

He added, "Every CFPB employee, except senior leadership, who received a (three) or (four) summary performance rating in fiscal years 2012 or 2013 under the prior performance management program will be compensated as if his or her rating had been a (five) at the time of evaluation, including both merit and lump sum payments."

According to an internal CFPB report dated March 21 (click on the graph at left to expand), out of 1,173 employees reviewed in 2013, 17.4% received a five on their performance reviews.

When broken down by race, 20.7% of Caucasians received a five rating, compared to 10.5% of black employees who received a five rating.

Conversely, 28.8% of all employees received a rating of three, a less satisfactory rating. Analyzed by race, 24.4% of Caucasian employees received three ratings, while 42.4% of black employees received a three.

Hispanic and Asian employees also received fewer five ratings (18.5%) and more three ratings than Caucasian employees (34.5%), the report said.

The House Oversight and Investigations subcommittee has held several hearings with former and current CFPB employees, including Senior Enforcement Attorney Angela Martin, who alleged that managers engaged in racial and gender discrimination.

The report said 65 employees have filed complaints with the CFPB over performance reviews, including 30 men and 35 women. According to the report, 38 of the employees were Caucasian and 17 were black.

Some CFPB employees have complained internally about bureau managers demonstrating favoritism, discrimination and a lack of respect for everyone's work.

"The concerns raised include complaints about inexperienced supervisors who either micromanage or undermanage their subordinates or ignore employee feedback; the overabundance of high-pressure projects that are all deemed a priority," according to the CFPB's Office of Minority and Women Inclusion Listening Session Report dated August 2014.

"Lack of calibration across management teams by managers as to what constitutes success and excellence, leading to a range of results in performance measurements; and lack of accountability for supervisors who do not manage and develop their direct reports well," the report also read.

Cordray directed the CFPB's Office of Minority and Women Inclusion to hold a series of staff listening sessions to address diversity at the CFPB in light of the discrimination allegations and performance review disparities. A bureau report said more than 300 of the agency's approximately 1,100 employees participated in the 48 listening sessions between April 23 and June 18, 2014. According to the report, every employee was invited to participate and separate sessions were held for managers and supervisors.

"The bureau needs to provide managers and supervisors with appropriate training, which has now been developed and started internally, and practices need to be implemented that make time for and value management. Increased training can also complement shifting the culture of the agency to support an equal, fair, and inclusive workplace," the report recommended.

According to the report, the CFPB is "currently procuring (using full and open competition) expert services to evaluate personnel practices relating to performance ratings, compensation and hiring."

Employees cited "elitism, favoritism, lack of respect for everyone's work, lack of civility, lack of appreciation of different work-styles, perceptions of discrimination and lack of diversity in management" as internal issues.

Managers and employees also raised concerns about the new two-tier rating system.

The OMWI report said employees cited concerns regarding "insufficient communications around the roll out of the system, uncertainty around how to craft new performance objectives that would accurately reflect their job duties and uncertainty around the new system's impact on FY 2014 evaluations."

Participating managers were concerned about how they would be able to reward high performers and how they might motivate staff to perform at a higher level, the OMWI report said.

Managers also said they needed "additional training on rating employees and creating new employee performance plans profiles under the new system."