The receptacle is from the mid-1950's and my multimeter shows that it is grounded. There are a solid 120 volts when testing between live and ground. I noticed a bare copper wire coming from the cloth wiring in the back tied to a screw connected to the box. I looked around for usable screw holes in the box to screw a ground screw into but they were all way too large. Does this look okay? I get good continuity here between the green insulated copper ground wire I added and the rest of the box. The green wire goes to the ground screw on the new outlet in this case.
I do a lot of work on older homes and see stuff like this all the time. Keep in mind that the equipment grounding conductor (EGC), that bare safety ground, was not always present in wiring systems. If you see old homes - a little older than this one - with two-prong receptacles, those were wired back before the EGC was part of the system.
I think when the EGC was introduced, people were not exactly sure how to terminate it. You'll see the EGC wrapped around any handy screw. If it makes solid contact, and the screw is still doing it's job, it's probably not an issue, but it is not code compliant.
In this case, it doesn't look like that wrapped EGC is making solid contact, and it definitely is interfering with the screw clamping that clamp so the cable is secure. So from a strictly practical standpoint there is room for improvement here.
The NEC has the following rule, but I am not sure it would have been in the code at the time of construction:
250.148(C) Metal Boxes. A connection shall be made between the one or more equipment grounding conductors and a metal box by means of a grounding screw that shall be used for no other purpose, equipment listed for grounding, or a listed grounding device.
In addition, code requires that the box be listed and installed according to the manufacturer's instructions, and there's no way the manufacturer's instructions suggested the clamp screw be used for a ground screw. That rule goes back so far, it was probably a rule when this was installed, but I think when the EGC was new, inspectors were not super strict about things. But that's just my guess.
You'll notice in this picture that you have nonmetallic cable with a cloth jacket. Always be careful handling cable / wiring this old, the insulation is often brittle. This insulation looks like thermoplastic rather than rubber so it's probably not too bad to handle. The EGC is smaller than the line and neutral conductors - probably 16 gauge EGC with 12 AWG or 14 AWG line / neutral - which is not an issue.
Since it's no big deal to make this A-OK I would remove the bare ground from the clamp screw and make that clamp snug as it should be - but not super tight, not necessary and that old cable may be fragile.
I'd then splice the green wire, the bare ground, and a 6" bare ground pigtail with a wire nut, and bond the other end of the ground pigtail to the box by a suitable method. It's very possible that old box doesn't have the usual 10-32 threaded hole for a ground screw, so the easiest DIY thing to use is a grounding clip:
Grounding clips don't require any special tools to install and you don't have to reach inside the box to do what you need to do:
The box is metal therefore the box needs to have a ground wire attached to the box. This is protects you from getting shocked in the event there is a potential at the box. If it were not grounded… if you touched the box and then touched something grounded.. you would become part of the circuit to carry the electricity back to ground.
The bare copper wire coming out of the romex should have continuity all the way back to your panel and landed on the ground bar. It doesn’t have to be continuous but it does need to be spliced appropriately where ever there is a splice. (By one method or another every bare copper and green ground wire should be connected together with a few exceptions that are not specific to this topic)
The receptacle or switch needs to have a green or bare copper wire coming off of the green screw on the device.
All green and/or bare copper conductors are to be wire nutted together. Whenever you are terminating wires. You need to leave 6” or more wire coming out if the box. They can’t be shorter than that.
You are required to use green or bare copper. No other color.
Keep in mind there are requirements for box fill, depending what you are putting in that box… you may need a deeper box with more room so you don’t cause a fire and burn the house down.
To answer your question… NO it does not look good and I would make you fix it. Reason being, among other reasons, yiu bonded your new green wire to a piece bolted on to the housing. You need to bond it to the actual housing. Then, anything touching the housing is bonded. Right now, if you took one of the clamps out, the box is no longer bonded. I know, silly right? Here is specifically why.. imagine a scenario where you have 4 sets of wires coming into the box (just like yours). Two coming in to the box in the top & two coming in to the bottom. Let’s say you were demoing the top set, you have to take the clamp out. You have the wire attached to that screw. Once you remove the screw the whole box is ungrounded. You then continue to replace whatever you removed and you move the wires left in the box that are under the other strap. At that time the old insulation falls off your black wire and make contact with the metal clamp or back of box. Now you stick your hand in there while holding the the ground wire, grounded device, anything grounded or a neutral conductor. You then become part of the circuit and you get shocked.
Also, don’t twist the wire around the screw. Just crimp on a fork or ring stakon and screw it into a box like if you bought UL listed grounding pigtails from the store.