National Security Personnel System (NSPS)

2 Goals and Expected Outcomes Flexible Civilian HR System that is Agile and Effective Improve readiness Increase Quality of the Workforce Reward Excellent Performance Improve Timeliness of Key Personnel Actions Increase Organizational Effectiveness and Customer Satisfaction

3 Merit-based System Based on existing statutory merit principles Protects Veterans DON employees and OPM involved in development and deployment Pay Banding – replaces 15 grades and 10 steps Three pay bands each with four levels NSPS Provisions Career GroupCareer Group NameLevel 1Level 2Level 3Level 4 CG 1Professional and Administrative Management GS 5-12GS 13-14GS-15Above GS-15 CG 2Engineering, Scientific, and Medical Support GS 1-4GS 5-7GS 8-11GS-12 & above to CG 1 CG 3Business and Administrative Support GS 1-4GS 5-7GS 8-10GS-11 & above to CG 1

4 NSPS Provisions Pay for Performance Eliminates automatic pay raise Any additional raise based on supervisory appraisal Payouts will be in March each year Increase can be either to basic pay or one time cash payment Employee will receive locality pay increase No increase in total funds available to pay employee raises To maximum extent possible, maintains funding levels for FY04-08 as would otherwise have been allocated had NSPS not been established

5 Internal Hiring Alternative forms of competition – i.e., use promotion board for ranking New probationary period for each competitive promotion External Hiring (outside of the government) Initial career appointment – 3 year probationary period DEU flexibility – streamlined ranking, eliminates rule of three Scholastic Achievement Appointment On-the-spot hiring – criteria not yet determined (I.e., critical positions, difficult to fill) OPM approval not required NSPS Provisions

6 Labor Relations - National Level Bargaining Internal (DoD) Appeals System - 3 rd party review based on DoD regulations Reduction in Force - Retention primarily based on performance Permanent Early Retirement and Separation Incentive Authority SES Pay capped at no more than Vice Presidents total annual compensation Hiring of Experts for up to five years Rehired Annuitants – similar to Military provisions with no offset to retired pay Align overseas benefits to State Department and CIA NSPS Provisions