Department of Defense
APEX Orientation
Program
Mrs. Mary Lacey
Program Executive Officer
September 11, 2006
What is NSPS?
DoD’s Flexible and Responsive Civilian Personnel System
 Performance management system that:
 Values performance and contribution
 Encourages communication
 Supports broader skill development
 Promotes excellence
 Streamlined, more responsive hiring process
 Flexibility in assigning work
 Preservation of employee benefits, rights, and protections
 Preservation of rights to join a union
 Tools for a more effective and efficient workforce
September 2006
Who is covered by NSPS?
 NSPS Human Resources System
 Vast majority of DoD employees eligible for coverage
 Initially applies only to selected GS/GM and Acquisition
Demo employees
 Employees in special pay/classification systems (e.g.,
wage grade) will be phased in later
 Certain categories excluded (e.g. intelligence
personnel, Defense Labs listed in NSPS law)
 NSPS Labor Relations System
 Designed to apply to all employees and labor organizations
currently covered by Chapter 71 of title 5
Vast majority of DoD civilian employees
September 2006
AFGE v. Rumsfeld
 Feb 27, 2006, District Court concluded that:
 DoD and OPM satisfied their statutory obligation to
collaborate in developing the system
 DoD lawfully had the authority to depart from chapter 71 in
establishing a new labor relations system
 New rule fails to ensure that employees can bargain
collectively
 National Security Labor Relations Board does not meet
Congress' requirement for "independent third party review"
of labor relations decisions
 Process for appealing adverse actions fails to provide
employees with "fair treatment" as required by Congress
 District Court permanently enjoined adverse actions,
appeals, and labor relations
 Department of Justice filed Notice of Appeal on April 17
and first appeal brief on August 10
September 2006
Where We Are
 2½ years of joint design and development
 Spiral 1.1 implemented on 30 April 2006
 Human Resources provisions
 Over 11,000 CONUS GS employees in 12 organizations across the
Department
 Successful IT conversion and payroll interface
 Performance Management
 Workforce trained in HR Elements and Performance Management
 Performance plans linked to organizational goals and objectives
 Rating cycle through October 2006
 Performance payout in January 2007
 Lessons Learned Workshop, June 21-22 2006
 Announced Spiral 1.2 – over 66,000 employees
 Human Resources provisions
 CONUS and OCONUS – two pay schedules (GS and APS)
 Conversion October 2006 – Jan 2007
 Rating Cycle through September 2007
 Performance payout in January 2008
September 2006
Spiral 1.1 and 1.2 Workforce Concentrations
US, AK, HI
DC, DE,
NJ, VA
100+
200+
1,000+
5,000+
Source of chart data throughout: Unless otherwise noted, DCPDS, as of 11 May 2006, start of Spiral 1.1.
September 2006
Major Design Elements

Classification


Compensation



Linked to agency mission
Job objectives and contributing factors influence rating
Meaningful distinctions in employee performance

Employee development with ongoing feedback and dialogue

Staffing



Pay directly linked to performance and mission accomplishment
Performance Management


Jobs in broad “pay bands” based on work nature and competencies
Flexibility to respond to mission changes
The right person, in right place, at the right time
Workforce Shaping

Emphasis on performance
September 2006
Classification
 Simple – Flexible


Based on natural career groups, typical career progression and compensation
Sunset special salary rates
 Career Groups



Establish new groups as needed
Combine current groups if differences become unimportant
Add, combine, eliminate, and/or move occupations
 Pay Schedules and Bands


Stratify occupations within career groups
Reflect distinctions in occupations




Types of work
Education requirements
Career progression
Pay practices
Science &
Engineering
101,012
19%
Medical
20,371
4%
Investigative &
Protective
20,552
4%
Standard
380,880
73%
September 2006
Compensation Philosophy
 Performance based - market sensitive
 Allows adjustments to market – be competitive
 Salary increases tie to performance – not time on job
 Largely sunset special rate supplements
 Move to market sensitive pay over time
 Adjust career group, pay schedule, occupation, and/or
pay band local market supplement pay differently than
rest of government by exception for now
 Establish analysis capacity this FY
September 2006
Performance Management System
Results-oriented, mission-focused
Clear and understandable (fair, credible, and transparent)
Direct link between pay, performance and mission accomplishment
Reflect meaningful distinctions in employee performance
Robust (capable of supporting pay decisions)
Job objectives – the “What” – primary focus
Manner of performance – the “How” – contributing factors that influence
the objective rating
 Supervisors are rated on at least one supervisory objective
 Monitor and develop employees
 Rate and reward performance







September 2006
Managing Performance
 Supervisors know their employees, what they
contribute, and how they spend their time
 Understand that employees have different needs,
motivations, and expectations about their work
and work relationships
 Your workforce has Role Models, Valued
Performers, and Unacceptable Performers:
your employees know that!
September 2006
Employee Motivators
What Managers Thought
What Employees Said
1. Good wages
1. Appreciation
2. Job security
2. Feeling “in” on things
3. Promotion opportunities
3. Understanding attitude
4. Good working conditions
4. Job security
5. Interesting work
5. Good wages
6. Loyalty from management
6. Interesting work
7. Tactful discipline
7. Promotion opportunities
8. Appreciation
8. Loyalty from management
9. Understanding attitude
9. Good work conditions
10. Feeling “in” on things
10. Tactful discipline
September 2006
Staffing & Workforce Shaping Philosophy
 Staffing
 Right person –right place – right time
 Develop capabilities to meet tomorrow’s threats
 Appointing authority for DoD
 Easily hire for critical needs
 Pay flexibility
 Obtain and keep talent for mission needs
 Be competitive
 Work Force Shaping
 Streamlined, mission responsive
 Performance based
 Less disruptive to employees and mission
 Honor Veterans’ Preference
September 2006
Resource Management and Funding
 In accordance with the NSPS statute:
“To the maximum extent practicable, for fiscal years 2004
through 2008, the overall amount allocated for compensation of
the DoD employees who are included in the NSPS may not
be less than the amount that would have been allocated for
compensation of such employees if they had not been
converted to NSPS.”
 Civilian pay accounts are not being increased, but you
will have choices you didn’t have before.
September 2006
Senior Executive FM Policy Decisions
 Conversion Adjustment
 Employee’s basic pay will be set at their current base rate
plus a pay adjustment equal to the amount earned to date
toward their next WGI
 January 2007 Pay Adjustment
 Grant equivalent of GS across-the-board pay increase and
locality pay increase for those employees with a current
rating of record of Level 2 or above.
 Pay Pool Funding Floor
 Department-wide funding floor set at DoD historical
average (2.26%) for continuing pay
 Components have discretion to set bonus portion of the
pay pool
 Protection of Pay Pool Funding
 Components certify that pay pool funds were used only for
compensation of civilian employees
September 2006
Why Pay Pools Are Important
 Provides mechanism for ensuring multi-level
accountability and responsibility
 Ensures decisions regarding compensation and
rewards receive higher level review
 Provides transparency
 Validates decisions made at the individual level
within the context of organization and mission
 Preserves the integrity of the performance
management system
September 2006
Evaluating NSPS in the Organization
Mission
&
Planning
Hiring and
Assignments
Performance
Utility of
performance plans
Quality of
newcomers
Pay pool
effectiveness and
fairness
Ease of assignment
change
Pay
Pay flexibility and
candidate quality
Roles and effects of
control points
September 2006
Leadership Focus
 Leadership Commitment and Communication
 Be present and vocal, build workforce trust
 Reinforce NSPS value - ease transition - facilitate buy-in
 Strategic Alignment of Performance to Mission
 Alignment starts with you




Goals and objectives aligned with mission
Results demonstrated and measurable
Realistic expectations for self and others
Respectful relationships with responsibility understood and
accepted
 Resource Management and Funding
 Financial management not same as pay pool management
 Develop compensation strategies/establish decision making
authority
 Training
 Early and often, and again
Commitment and involvement – your keys to success
September 2006
Summary
 A modern, flexible, and agile human resources system
 Responsive to the national security environment
 Preserves employee protections and benefits
 Stimulates an environment where employees are encouraged to
excel, challenged with meaningful work, and recognized for
contributions
 Transitions to a culture where feedback and coaching is essential
 Encourages employees to take ownership of their performance and
successes
“NSPS is a win-win-win system… a win for our employees,
a win for our military and a win for our Nation.”
Honorable Gordon R. England
NSPS Senior Executive
September 2006
NSPS Website
QUESTIONS?
www.cpms.osd.mil/nsps
September 2006
Spiral 1.1 vs 1.2
Spiral 1.1
Spiral 1.2
 11,124 employees
 66,558 employees
 CONUS only
 CONUS and OCONUS
 Single pay schedule
 Two pay schedules
(GS)
 Single implementation
date (30 Apr 06)
 NBU (7777 and 8888)
September 2006
(GS and APS)
 Conversion window
(Oct 06 – Jan 07)
 NBU (7777 and 8888)
Spiral 1.1 Components
Army
2,348
Navy
4,354
Air Force
3,142
Fourth Estate 1,280
Total
September 2006
11,124 civilians
Spiral 1.2 Components
Army
14,373
Navy
8,495
Air Force
36,706
Fourth Estate 6,984
Total
September 2006
66,558 civilians
Spiral 1.2 Workforce Concentrations
UK, GE, IT
KO, JA
100+
200+
1,000+
Source of chart data throughout: Unless otherwise noted, DCPDS, as of 11 May 2006, start of Spiral 1.1.
September 2006
Classification Architecture
STANDARD CAREER GROUP
Pay Schedules
 Professional/Analytical
 Tech/Support
 Student Employment
 Supervisor/Manager
INVESTIGATIVE & PROTECTIVE
SERVICES CAREER GROUP
Pay Schedules
Investigative
 Fire Protection
 Police/Guard
 Supervisor/Manager
73% of DoD white collar workforce
4% of DoD white collar workforce
SCIENTIFIC & ENGINEERING
CAREER GROUP
Pay Schedules
 Professional
 Tech/Support
 Supervisor/Manager
MEDICAL CAREER GROUP
Pay Schedules
 Physician/Dentist
 Professional
 Tech/Support
 Supervisor/Manager
19% of DoD white collar workforce
4% of DoD white collar workforce
September 2006
Standard Career Group
Professional/Analytical
Pay Schedule
$38,175 - $85,578
1
$25,195 - $60,049
$15,000
3
$74,608 - $124,904
35,000
55,000
75,000
2
Plus
Local
Market
Supplement
95,000
115,000
135,000
Technician/Support
Pay Schedule
$46,189 - $71,965
$31,209 - $54,649
$16,352 - $36,509
$15,000
1
35,000
2
3
Plus
Local
Market
Supplement
55,000
75,000
Supervisor/Manager
1
$31,209 - $60,049
55,000
75,000
95,000
135,000
3
2
$55,360 - $106,186
35,000
115,000
$77,793 - $124,904
Pay Schedule
$15,000
95,000
Plus
Local
Market
Supplement
115,000
135,000
Student
Pay Schedule
1
$16,352 - $60,049
$15,000
September 2006
35,000
Plus
Local
Market
Supplement
55,000
75,000
95,000
115,000
135,000
Scientific & Engineering Career Group
Professional
Pay Schedule
2
$38,175 - $85,578
1
$25,195 - $60,049
$15,000
3
$74,608 - $124,904
35,000
55,000
Plus
Local
Market
Supplement
75,000
95,000
115,000
135,000
Technician/Support
Pay Schedule
$62,740 - $85,578
3
$46,189 - $71,965
$31,209 - $54,649
$16,352 - $36,509
$15,000
35,000
1
2
4
Plus
Local
Market
Supplement
55,000
75,000
95,000
115,000
135,000
Supervisor/Manager
Pay Schedule
3
$74,608 - $124,904
2
$55,360 - $106,186
$31,209 - $60,049
$15,000
September 2006
35,000
55,000
1
75,000
95,000
Plus
Local
Market
Supplement
115,000
135,000
Medical Career Group
Physician/Dentist
Pay Schedule
$25,000
2
$85,000 - $175,000
60,000
95,000
130,000
Professional
165,000
Plus
Local
Market
Supplement
200,000
2
$38,175 - $101,130
1
$25,195 - $60,049
35,000
55,000
75,000
95,000
225,000
3
$74,608 - $124,904
Pay Schedule
$15,000
3
$110,000 - $225,000
Plus
Local
Market
Supplement
115,000
135,000
Technician/Support
Pay Schedule
$31,209 - $54,649
$16,352 - $36,509
$15,000
$15,000
3
$46,189 - $71,965
1
35,000
35,000
2
Plus
Local
Market
Supplement
55,000
55,000
75,000
75,000
Supervisor/Manager
$100,000 - $200,000
Pay Schedule
$77,793 - $124,904
$55,360 - $106,186
$31,209 - $60,049
$25,000
$25,000
September 2006
60,000
60,000
95,000
95,000
1
95,000
95,000
115,000
115,000
135,000
135,000
4
3
2
Plus
Local
Market
Supplement
130,000
130,000
165,000
$165,000
200,000
200,000
225,000
235,000
Investigative & Protective Services Career Group
Investigative
Pay Schedule
3
$74,608 - $124,904
$38,175 - $85,578
1
$25,195 - $60,049
$15,000
35,000
55,000
2
Plus
Local
Market
Supplement
75,000
95,000
115,000
135,000
Fire Protection
Pay Schedule
$62,740 - $101,130
$46,189 - $71,965
$31,209 - $54,649
$16,352 - $36,509
$15,000
September 2006
35,000
1
2
55,000
3
4
Plus
Local
Market
Supplement
75,000
95,000
115,000
135,000
Investigative & Protective Services Career Group (cont.)
Police/Security Guard
Pay Schedule
$31,209 - $54,649
$16,352 - $36,509
$15,000
35,000
1
2
Plus
Local
Market
Supplement
55,000
75,000
95,000
115,000
135,000
Supervisor/Manager
Pay Schedule
$77,793 - $124,904
2
$55,360 - $106,186
$31,209 - $60,049
$15,000
September 2006
35,000
55,000
1
3
Plus
Local
Market
Supplement
75,000
95,000
115,000
135,000
Compensation
Performance-Based Pay



Annual pay raises or bonuses based on performance
High-performing employees can get higher pay raises
Employees must perform at “Valued Performance” (Level 3) or higher to get
any increase
Rate Range Increases


Nation-wide salary adjustments, may vary by pay band
Employees must perform at “Fair” (Level 2) or higher to get any increase
Local Market Supplement Increases




Similar but not identical to locality pay - addition to base pay
Based on geographic or occupation market conditions
In given area, can differ from one occupation to another
Employees must perform at “Fair” (Level 2) or higher to get any increase
Other Features



Rate ranges and local market supplements are reviewed annually
6% minimum salary increase for promotions
Eligibility for salary increase for reassignment/reduction in band
Pay bands replace General Schedule
September 2006
What Constitutes Compensation
General Schedule
+
Worldwide
Base Rate
OR
+
Special
CONUS
Rate Supplement
Locality Pay
+
=
Bonuses
Step
Increases
Based on occupation/
All GS employees in
geographic locality
covered locality get same %
-----------------------
Cash
Awards
Adjusted Salary
NSPS
+
Worldwide
Base Rate
September 2006
Local Market
Supplement
Variable by career group,
pay schedule, occupation,
&/or pay band
+
=
+
Performance
Based Bonuses
Performance
Based Pay
Adjustment
-----------------------------------
Cash Awards
Adjusted Salary
Civilian Personnel Funding Allocations
Title 5
• Within-Grade Increases
• Quality-Step Increases
• Promotions Between Grades
• Chapter 45 Incentive Awards
September 2006
NSPS
• Performance-Based Payouts (Pay Pool)
- Salary Increases
- Bonuses
• Promotions Between Bands
• Reassignments
• Accelerated Compensation for
Developmental Positions (ACDP)
• Extraordinary Pay Increases (EPI)
• Organizational Achievement Recognition (OAR)
• Chapter 45 Awards
Pay Overview
SECDEF Decisions
Performance-Based Pay
(Outside Pay Pool)
(Inside Pay Pool)
[may be Continuing and/or Bonus]
• Rate Range
Adjustments *
• Local Market
Supplement
(LMS) *
• WGIs **
Money
histori
-cally
spent
• QSIs **
• Promotions
• Annual Bonuses
Chapter 45
Incentive Awards
(Outside NSPS)
• Special Act
• On-the-Spot
• Time Off
• Portion of GPI ***
Element
1
2
3
*
Funded by annual January pay increase
**
Does not exist under NSPS
*** Portion remaining after funding Rate Range Adjustments and LMS
NOTE: - Organizations can add additional dollars for either salary increases, bonuses or both
- Extraordinary Pay Increases (EPIs) and Organizational/Team Achievement Recognitions
(OARs) are funded from other sources (NOT from pay pool)
September 2006
Base Pay Increase Funding Floor
Statutory requirement to not disadvantage employees
Certified annually by Components to SecDef
January 2007 =>
Not less than the amount historically spent*
 Full GPI used for rate range increases and LMS

January 2008 =>

2.26% across DoD
 GPI can split between rate range increases, LMS
and pay pool funding
January 2009 =>

By formula to be established by SecDef
 GPI can split between rate range increases, LMS
and pay pool funding
* Funds for base pay increase floor
September 2006
= Pay pool element 1
+ Reassignment/salary increases
+ Salary increases from any ACDP, OAR and EPI
Pay Pool Funding Sources
Element 1
Fixed percentage
DoD-wide / Component
Minimum (%)*
Element 2
Remaining portion of
General Pay Increase
set by DoD (%)
Element 3
Annual bonuses
Component discretion
(%)
Pay Pool Fund
$
(Total Element %) X (Total Base Salaries)
*Derived from DoD-wide multi-year historical data and is imposed to protect civilian pay accounts
and to meet the statutory requirement to NOT disadvantage employees.
September 2006
Lessons Learned
 Performance Management




Refine strategic plan
Develop and cascade performance goals and objectives
Close performance appraisals 30 days before conversion
Protect pay pool funds
 Communication
 Communicate often and clearly
 Use multi-media and employee engagement groups
 Allow employees to vent
 Training
 Take full advantage of training opportunities
 Use instructors with federal HR experience
 Partner with in-house trainers
Senior leadership is critical
September 2006
Lessons Learned
 Program Management
 Allow sufficient time to plan and implement
 Use the readiness tool
 Involve stakeholders early
 Line Managers, Financial Managers, Public Affairs Officers,
General Counsel, Human Resources experts, et al
 Avoid reorganizations, RIFs, or mass changes prior to
conversion
 Records Management
 Start quality control and data correction early
September 2006
Alignment Matters
 The Core
 Align work with mission and/or organizational goals
 Communicate and understand how employee contributions tie to
mission and organizational goals
 Acknowledge and reward performance
 Distinguish levels of performance so that those who are
contributing are rewarded appropriately
 The Keys
 Relationships are clear and transparent
 Responsibility is clear and accepted
 Results are demonstrated and measurable
 The Experience – over 25 years in DoD
 Communication and training are critical
 Evaluation assures accountability
 Transformational change must happen at every level
September 2006
Training and Communication
 Training
 Leadership involvement sets the tone
Establish expectations, make NSPS “real”
 Tailor to meet organizational needs
 Do not shortchange employees by thinking they will
“get it” – organizational transformation takes time
 Training not a panacea – needs to be supported by
other activities

 Communication
 Make communication a priority – be inclusive
 Open and frank discussions are critical
 Let people talk about how the change affects them
 Calibrate expectations
September 2006
Impact of DHS Court Decision
 Court of Appeals ruled in favor of unions on almost all
significant issues:
 DHS regulations do not provide core framework for collective
bargaining found in chapter 71 of title 5
 DHS regulations cannot change role of the FLRA
 Court of Appeals ruled that appeals mitigation standard
is not yet ripe for appeal
 While NSPS regulations are similar to DHS, there are
statutory differences that may affect result of our appeal
before the same court
 DHS and DoD cases do not involve the human resources
elements
 DHS will not seek rehearings before the DC Circuit Court but
reserves the decision whether to appeal to US Supreme
Court
September 2006
Pay Pool Manager Training
 2-1/2 day facilitated workshop
Includes time for component specific planning session

 Target audience
 Pay pool managers and sub pay pool managers
 Trainers and facilitators
 Topics
 Dynamics, processes and procedures for effective
management

Dates




July 11 – 13
July 25 – 27
August 8 – 10
August 15 – 17
September 2006
Sites
Southbridge, MA
Rockville, MD
Palm Springs, CA
Southbridge, MA
Number
90
225
200
150
Pay Pool Training Support Tools
 Brochure – Pay Pool Management at a Glance
 Available through component training offices
 On the NSPS web site
 Manager’s Notebook
 In development
 Participant and Instructor Guides
 Pay pool simulation data
 Pay Pool Automated Training Tool being developed
September 2006