Civilian personnel system offers workers opportunities, officials say Published Jan. 13, 2008 By Army Sgt. Sara Moore American Forces Press Service WASHINGTON (AFPN) -- In its second year of implementation, the Defense Department's new civilian personnel system is meeting its goal of shifting the department to a performance-based pay system while giving employees the power to boost their own careers, two officials with the program said here Jan. 7. The National Security Personnel System now covers about 130,000 of the department's civilian employees, and feedback has been positive about the system, which ties employees' pay raises and bonuses more directly to annual performance evaluations, Michael Dominguez, principal deputy undersecretary of defense for personnel and readiness, said in an interview. "What I've been hearing is, the system is doing what we've intended it to do, which is to galvanize conversations in the department and with our employees about our mission (and) what it is we need to achieve," Mr. Dominguez said. DOD officials recently issued the 2008 NSPS pay schedules, which were effective Jan. 6. This year, 60 percent of the base salary increase for federal employees will go to pay increases for employees who receive a final rating of 2 or higher on their evaluations, which includes virtually all federal employees. Forty percent of the base salary increase will go to "pay pools" to be allocated as performance-based salary increases to employees with a rating of level 3 or higher. Mary E. Lacey, program executive officer for NSPS, said that in last year's NSPS payout, the January salary increase was not at all tied to performance. However, this year the department changed that to bring the annual pay increases more in line with the performance-based management system, she said. DOD officials had planned to make January pay increases exclusively performance-based by next year, but under an agreement with Congress, the split will remain 60 percent and 40 percent, as it is this year, Ms. Lacey said. Ms. Lacey said she has seen data on about 60 percent of the payouts that will be made under NSPS this year, and the results are promising. About 5 percent of employees are being rated as level 5, or "role model," about 60 percent of employees are rated at level 3, and practically no employees are rated as level 1, or "unacceptable," she said. "I think most employees will find, at the end of the day, ... that they did pretty darn well under NSPS, and some of those fears will die down," Ms. Lacey said, referring to some employees' anxieties about the new system. Ms. Lacey and Mr. Dominguez agreed that implementing a new system is challenging, and supervisors and employees alike have had difficulty adjusting to the new performance-based culture. However, they said, it is a welcome change because it gives employees a clearer understanding of what is required of them to advance and even gives them the opportunity to advance more quickly than they could under the old system. "To some extent, it's a choice for employees in terms of how they want to approach their work, and ... if they want to rocket up the scale, if you will, (be) hard-driving (and) take on the tough challenges, then there is the potential there for them to take on more responsibility and increase their salary because of their performance," Ms. Lacey said. To ensure that employees and managers understand the system, DOD officials have invested a lot of time in training and education about how the system works and why it is beneficial, Mr. Dominguez said. He stressed that leaders at every level, including military leaders who have employees or colleagues under NSPS, need to understand the system completely and ensure their subordinates understand it. NSPS is a system that is first designed to support DOD's national security mission, Mr. Dominguez said. It is also designed to update the civil service system to meet the demands of the 21st century, where workers expect to be rewarded based on performance, instead of how long they've been in a job, he said. "In NSPS, you can go as fast and as far as you want to go," Mr. Dominguez said. "It's not a time-driven system; it's a performance-driven system." DOD officials plan to bring about 57,000 more employees under NSPS in the spring, Ms. Lacey said. The department also will work with organized labor to bring even more employees under the system, she said. Because DOD is such a large, complex organization, it will continue to take time to get everyone trained and under the new system, she said. In fact, pay systems for some employees -- those in the intelligence field, for example -- are covered under statutory authority, and they will never come under NSPS. Overall, about 500,000 civilian employees will come into NSPS over the next three to five years, Ms. Lacey said. "This is probably the most significant investment we have made in our civilian work force in terms of their leadership, management and soft skills (such as communication and coaching employees) ever, in my career, at least," Ms. Lacey said. "We will continue that pace as we train folks up to bring them in."