National Security Personnel System Opening Doors for Defense Transformation January 8, 2004 27-Jul-19

Agenda Background Key provisions of NSPS legislation Relationship to existing civilian personnel system The way ahead for DoD and the Army Conclusion 27-Jul-19

The Army Civilian Workforce 499K Active Duty 205K USAR 350K ARNG Key civilian functions 221K APF US 26K Foreign National 28K NAF Logistics Medical Engineering, Science IT Administration BASOPS, MWR MANY DOD CIVILIAN HR SYSTEMS US Civil Service 6 main FN systems Intelligence HR system DoD NAF HR system Acquisition Demo 5 Laboratory Demos 27-Jul-19

NSPS Overview Authority for DoD civilian personnel system: flexible, contemporary, streamlined National Defense Authorization: authority, framework, key areas System details built on Demonstration Project Best Practices for staffing, performance management, job classification System details to be built by DoD work groups for labor relations, discipline, appeals, premium pay Preserves civil service principles and veterans’ preference -- in law Respects collective bargaining -- in law Opportune timing: high projected losses, keen competition Gives DoD opportunities to standardize as well as gear to mission Phases implementation over a two year period OSD mandate 27-Jul-19

Building the Civilian HR System Legal Basis Regulator Implementer Federal Civil Service, US Code Title 5 Office of Personnel Management Merit Systems Protection Board Federal Labor Relations Authority Agencies incl DoD Mil Services Before NSPS National Defense Personnel System, US C Title 5, Ch 99 Secretary of Defense and OPM, with collaboration by employee reps at national level Limited role for MSPB, FLRA Federal Civil Service e.g., allowances, leave, training, benefits + Mil Services After NSPS 27-Jul-19

A System in Transformation Function Current System NSPS Concept Structure Rigid job classification structure: GS system has 15 grades/8-9 grade levels for an occupation. Employee works within job grade level or else competes for promotion. Banded to 3-4 levels. Employee works to capability within broader range of mission needs. Fewer competitive promotions. Acquire Selection forced from ranked list of candidates. 200 appointing authorities. Best/Highly qualified/Qualified group ranking: select from within highest group. Simpler, fewer appointing authorities. Distribute Assign work/reassign employee within narrow, rigid job grade level. Assign range of work/reassign employee within broad job level. Sustain Highly structured, rule driven pay within each grade and its pay steps. Performance appraisal has little impact on pay or career progression. Manager/employee influence. Pay is contribution based and market sensitive. Appraisal is central to pay determinations and progression. Separate Reduction in force: main factor length of service. Reduction in force: stronger role for performance. BOTTOM LINE: Performance, contribution based system - Makes it easier to hire, employ, compensate, reward high quality civilians - Demands significant leader involvement 27-Jul-19

NSPS in Relation to Current System No Change from Title 5: Merit system principles Rules against prohibited personnel practices Benefits Allowances for travel, subsistence Training Leave and work schedules Other personnel systems in law Current Lab Demos until FY 09 Anti-discrimination laws BP Concepts for Collaboration: Job classification Staffing Reduction in force Performance management Pay setting In Development: Labor relations Appeals Adverse actions Premium pay Continuing Component Responsibility for Policy and Execution: Human resource management - Leader Development - Support tools Recruiting - Worklife programs - Mobilization and Workforce diversity - Reorganization planning deployment Career management - Workforce planning 27-Jul-19

The Way Ahead for DoD AMBITIOUS 27-Jul-19

The Way Ahead for Army: Fulfill OSD Mandate – Tailor for Army Activity Timeframe Lead Agent Assign two to OSD project office Mid-Dec 03 thru Sep 05 AG1 CPP Establish Army NSPS project office in AG1 CPP to manage work groups, IPR process for system changes, training, implementation Jan 04-Sep 05+ AG1 CPP, PPDD Plan, design Army implementation - Incorporate lessons learned Design Army program, regulation, policy, IT changes (ID deliverables) AG1 NSPS project office with M&RA. Assisting: ARSTAFF, MACOM, Career Program Functional Chiefs Manage change 2d qtr 04-Nov 05 CSA with G1, AG1 NSPS project office Fulfill labor obligations TBD: OSD green light AG1CPP national level; Units local level Communicate with commanders, executives, managers, supervisors, employees General DoD info from 12/03 More specific as available AG1 CPP PPDD AG1 NSPS project office Train HR community, adjunct managers like FCRs/Performance Pool Mgrs, supervisors, employees HR 2d/3d qtr FY04 or later Adjunct: following HR Workforce/Supv specifics: 60 days before implementation AG1 NSPS project office with CHRA thru MACOM trainers. Implement TBD FY04/FY05 AG1 27-Jul-19

In Conclusion Monumental change: bigger than Civil Service Reform Act of 1978 All management officials including military supervisors of civilians, career field proponents, institutional schools Most DoD civilian employees Most DoD/Army civilian HR rules, policies, business processes, IT tools Historical opportunity; significant challenges 27-Jul-19

Backup Charts 27-Jul-19

Civil Service Merit Principles Recruit qualified individuals from all segments of society; select and advance employees on the basis of merit after fair and open competition. Treat employees and applicants fairly and equitably without regard to political affiliation, race, color, religion, national origin, sex, marital status, age, or handicapping condition. Do not violate their privacy or constitutional rights. Provide equal pay for substantially equal work; reward excellent performance. Maintain high standards of integrity, conduct, and concern for the public interest. Use the workforce effectively and efficiently. Retain employees on the basis of his/her performance. Separate employees who cannot/do not improve their performance to meet required standards. Educate and train employees when it will result in better organizational or individual performance. Protect employees from arbitrary action, improper political influence, and personal favoritism. Protect employees against reprisal for lawful disclosures of information in “whistleblower” situations like when the employee reasonably believes there is illegal activity, gross waste of funds, abuse of authority, substantial danger to public health or safety. 27-Jul-19

Civil Service Prohibited Personnel Practices Don't DISCRIMINATE on the basis of race, color, religion, sex, national origin, age, handicapping condition, marital status, or political affiliation. Don't SOLICIT OR CONSIDER employment recommendations based on factors other than personal knowledge or records of job-related abilities or characteristics. Don't COERCE the political activity of any person. Don't DECEIVE OR WILLFULLY OBSTRUCT any person’s right to compete for employment. Don't INFLUENCE any person to withdraw from competition for any position in order to improve or injure the employment prospects of any other person. Don't GIVE UNAUTHORIZED PREFERENCE OR ADVANTAGE to any person to improve or injure the employment prospects of any particular employee or applicant. Don't ENGAGE IN NEPOTISM. (I.e., as a public official, do not hire, promote or advocate the hiring or promotion of relatives within your agency.) Don't THREATEN OR RETALIATE against employees or applicants who exercise their appeal rights or who disclose “whistleblower” information to an agency Inspector General or the Special Counsel, or – if not prohibited by law, national defense interest, or Executive Order -- in other channels. Don't DISCRIMINATE based on personal conduct that is not adverse to the job performance of the employee, applicant, or others. Don't VIOLATE or recommend violation of a veterans’ preference requirement. Don't VIOLATE any law, rule, or regulation that implements or directly concerns the merit system principles. 27-Jul-19

NSPS: Key Provisions Pay for Performance system: merit, equity, fairness, linkage to agency strategic plans DoD authority to design rules for Staffing flexibilities to hire, promote, reassign, remove Reduction in force system emphasizing performance Improved, streamlined premium pay New ways to handle discipline, adverse actions 27-Jul-19

What May Be Different? KEY FEATURE CURRENT PRACTICE NSPS BP CONCEPT Retention in reduction in force Main factor: length of service performance level Pay raise in grade Longevity raises of 30% over 18 years, white collar; 17% over 6 years blue collar Performance-driven raises Annual pay adjustment Government-wide % increase How much starting pay? Mainly structured, rule-driven Mainly management decision: capability, market rate, performance Shifting job assignments Mainly within current grade level, specialty Same, but several ‘grades’ are banded into a level, for more flexible use of employee performance capability Qualifications Mainly length of time gaining or using a skill, knowledge To be determined: competency basis likely: Have it? To what degree? 27-Jul-19

NSPS: Key Provisions, cont. New labor relations system, including bargaining at national level Develop in collaboration with employee representatives Base on collaborative, issue-based approach Provide for third party review of disputes Sunset in six years unless extended in law New employee appeals process Base on due process for all employees, standards and procedures consistent with merit system principles Give right to appeal to full Merit Systems Protection Board Provisional for seven years; then permanent unless Congress acts 27-Jul-19

Other Key NDAA Provisions for DoD Permanent authority for voluntary early retirement and separation incentive payments for restructuring as well as reduction in force Elimination of pay offset for reemployed annuitants Higher Senior Executive pay cap Term appointments and special pay for up to 2,500 highly qualified experts in DoD Special pay and benefits for certain DoD employees abroad who are engaged in hazardous activities or specialized functions 27-Jul-19

DoD Best Practices Pay Features White collar pay banding for assignment flexibility, growth in performance Supervisor pay: extended pay ranges Conscious management decisions about pay, both initially and with annual performance assessment Pay retention for two years maximum April Federal Register 27-Jul-19

BP Classification System NONSUPERVISORY PAY BANDS Career Group Level 1 GS equivalency Level 2 Level 3 Level 4 CG1: Science and Technology Research GS 5-12 GS 13-15 Above GS-15 120% of GS-15 to maximum basic pay ES-4 N/A CG2: Professional & Administrative Management GS 5-11 GS-12-13 GS-14-15 Above GS-15 Note: may combine CG 1&2 CG3: Engineering, Science, Medical Support GS 1-4 GS 5-7 GS 8-11 (Go to CG2 if GS-12+) CG4: Business/Admini-strative Support GS 8-10 (Go to CG2 if GS-11+) 27-Jul-19

BP Classification System Comparing Grade/Level and Pay Progression BP proposed pay band/performance pay progression GS grade/in-grade pay progression CG2/Level 2 SES/ST Above GS-15 CG2/Level 1 CG2/Level 3 GS-7 GS-5 GS-9 GS-11 GS-12 GS-13 GS-14 GS-15 ES/ST $23,442 p/a min $35,519 p/a min $42,976 p/a min $51,508 p/a min $61,251 p/a min $72,381 p/a min $85,140 p/a min $29,037 p/a min $55,873 p/a max $79,629 p/a max $110,682 p/a max $102,168 p/a min Grade/Level threshold Pay progression KEY: BP April Federal Register 27-Jul-19

DoD Best Practices Staffing Features Broader rating groups for referral; more flexibility in selection choices Probation up to three years upon appointment; one year upon change to job with higher earning potential Emphasis on employee performance for retention in reductions in force Veterans’ preference observed for referral and reduction in force April Federal Register 27-Jul-19

DoD Best Practices Performance Features At risk pay: General Pay Increase plus pay pool factor for equivalents of within grade increases, promotions, quality step increases, and bonuses Seven standard performance factors Performance review board decisions on pay advancement and performance incentives April Federal Register 27-Jul-19