National Security Personnel System Opening Doors for Defense

National Security Personnel System Opening Doors for Defense Transformation January 8, 2004 30 -Nov-20

Agenda v Background v Key provisions of NSPS legislation v Relationship to existing civilian personnel system v The way ahead for Do. D and the Army v Conclusion 30 -Nov-20 2

The Army Civilian Workforce 499 K Active Duty 205 K USAR 350 K ARNG -Logistics -Medical -Engineering, Science US Civil Service 221 K APF US 26 K Foreign National 28 K NAF -IT -Administration -BASOPS, MWR MANY DOD CIVILIAN HR SYSTEMS Intelligence HR system Acquisition Demo Key civilian functions 6 main FN systems Do. D NAF HR system 5 Laboratory Demos 30 -Nov-20 3

NSPS Overview v Authority for Do. D civilian personnel system: flexible, contemporary, streamlined ü National Defense Authorization: authority, framework, key areas ü System details built on Demonstration Project Best Practices for staffing, performance management, job classification ü System details to be built by Do. D work groups for labor relations, discipline, appeals, premium pay v Preserves civil service principles and veterans’ preference -- in law v Respects collective bargaining -- in law v Opportune timing: high projected losses, keen competition v Gives Do. D opportunities to standardize as well as gear to mission v Phases implementation over a two year period v OSD mandate 30 -Nov-20 4

Building the Civilian HR System Before NSPS Legal Basis Federal Civil Service, US Code Title 5 Regulator Implementer Office of Personnel Management Merit Systems Protection Board Federal Labor Relations Authority Agencies incl Do. D After NSPS Mil Services National Defense Personnel System, US C Title 5, Ch 99 + Federal Civil Service e. g. , allowances, leave, training, benefits 30 -Nov-20 Secretary of Defense and OPM, with collaboration by employee reps at national level Mil Services Limited role for MSPB, FLRA 5

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 30 -Nov-20 6

NSPS in Relation to Current System NSPS 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 30 -Nov-20 7

The Way Ahead for Do. D AMBITIOUS 30 -Nov-20 8

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 AG 1 CPP Establish Army NSPS project office in AG 1 CPP to manage work groups, IPR process for system changes, training, implementation Jan 04 -Sep 05+ AG 1 CPP, PPDD Plan, design Army implementation - Incorporate lessons learned - Design Army program, regulation, policy, IT changes (ID deliverables) Jan 04 -Sep 05+ AG 1 NSPS project office with M&RA. Assisting: ARSTAFF, MACOM, Career Program Functional Chiefs Manage change 2 d qtr 04 -Nov 05 CSA with G 1, AG 1 NSPS project office Fulfill labor obligations TBD: OSD green light AG 1 CPP national level; Units local level Communicate with commanders, executives, managers, supervisors, employees • General Do. D info from 12/03 • More specific as available AG 1 CPP PPDD AG 1 NSPS project office Train HR community, adjunct managers like FCRs/Performance Pool Mgrs, supervisors, employees • HR 2 d/3 d qtr FY 04 or later • Adjunct: following HR • Workforce/Supv specifics: 60 days before implementation AG 1 NSPS project office with CHRA thru MACOM trainers. Implement TBD FY 04/FY 05 AG 1 30 -Nov-20 9

In Conclusion v Monumental change: bigger than Civil Service Reform Act of 1978 ü All management officials including military supervisors of civilians, career field proponents, institutional schools ü Most Do. D civilian employees ü Most Do. D/Army civilian HR rules, policies, business processes, IT tools v 30 -Nov-20 Historical opportunity; significant challenges 10

Backup Charts 30 -Nov-20 11

Civil Service Merit Principles v v v v v 30 -Nov-20 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. 12

Civil Service Prohibited Personnel Practices v Don't DISCRIMINATE on the basis of race, color, religion, sex, national origin, age, handicapping condition, marital status, or political affiliation. v Don't SOLICIT OR CONSIDER employment recommendations based on factors other than personal knowledge or records of job-related abilities or characteristics. v Don't COERCE the political activity of any person. v Don't DECEIVE OR WILLFULLY OBSTRUCT any person’s right to compete for employment. v 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. v Don't GIVE UNAUTHORIZED PREFERENCE OR ADVANTAGE to any person to improve or injure the employment prospects of any particular employee or applicant. v 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. ) v 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. v Don't DISCRIMINATE based on personal conduct that is not adverse to the job performance of the employee, applicant, or others. v Don't VIOLATE or recommend violation of a veterans’ preference requirement. v Don't VIOLATE any law, rule, or regulation that implements or directly concerns the merit system principles. 30 -Nov-20 13

NSPS: Key Provisions v v Pay for Performance system: merit, equity, fairness, linkage to agency strategic plans Do. D authority to design rules for ü Staffing flexibilities to hire, promote, reassign, remove ü Reduction in force system emphasizing performance ü Improved, streamlined premium pay ü New ways to handle discipline, adverse actions 30 -Nov-20 14

What May Be Different? KEY FEATURE CURRENT PRACTICE NSPS BP CONCEPT Retention in reduction in force Main factor: length of service Main factor: performance level Performance-driven raises Pay raise in grade Longevity raises of 30% over 18 years, white collar; 17% over 6 years blue collar Annual pay adjustment Government-wide % increase Performance-driven raises How much starting pay? Mainly structured, ruledriven Mainly management decision: capability, market rate, performance Mainly within current grade level, specialty Same, but several ‘grades’ are banded into a level, for more flexible use of employee performance capability Mainly length of time gaining or using a skill, knowledge To be determined: competency basis likely: Have it? To what degree? Shifting job assignments Qualifications 30 -Nov-20 15

NSPS: Key Provisions, cont. v New labor relations system, including bargaining at national level ü Develop in collaboration with employee representatives ü Base on collaborative, issue-based approach ü Provide for third party review of disputes ü Sunset in six years unless extended in law v New employee appeals process ü Base on due process for all employees, standards and procedures consistent with merit system principles ü Give right to appeal to full Merit Systems Protection Board ü Provisional for seven years; then permanent unless Congress acts 30 -Nov-20 16

Other Key NDAA Provisions for Do. D v Permanent authority for voluntary early retirement and separation incentive payments for restructuring as well as reduction in force v Elimination of pay offset for reemployed annuitants v Higher Senior Executive pay cap v v 30 -Nov-20 Term appointments and special pay for up to 2, 500 highly qualified experts in Do. D Special pay and benefits for certain Do. D employees abroad who are engaged in hazardous activities or specialized functions 17

Do. D Best Practices Pay Features v v 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 30 -Nov-20 18

BP Classification System NONSUPERVISORY PAY BANDS Career Group Level 1 GS equivalency Level 2 GS equivalency Level 3 GS equivalency Level 4 GS equivalency N/A CG 1: Science and Technology Research GS 5 -12 GS 13 -15 Above GS-15 120% of GS-15 to maximum basic pay ES-4 CG 2: Professional & Administrative Management GS 5 -11 GS-12 -13 GS-14 -15 Above GS-15 CG 3: Engineering, Science, Medical Support GS 1 -4 GS 5 -7 GS 8 -11 (Go to CG 2 if GS-12+) CG 4: Business/Administrative Support GS 1 -4 GS 5 -7 GS 8 -10 (Go to CG 2 if GS-11+) Note: may combine CG 1&2 30 -Nov-20 19

BP Classification System Comparing Grade/Level and Pay Progression BP proposed pay band/performance pay progression GS grade/in-grade pay progression ES/ST $102, 168 p/a min $110, 682 p/a max GS-15 $85, 140 p/a min GS-14 $72, 381 p/a min $79, 629 p/a max GS-13 CG 2/Level 2 $61, 251 p/a min GS-12 $51, 508 p/a min $55, 873 p/a max GS-11 $42, 976 p/a min GS-9 $35, 519 p/a min GS-7 $29, 037 p/a min GS-5 CG 2/Level 1 $23, 442 p/a min KEY: 30 -Nov-20 SES/ST Above GS-15 CG 2/Level 3 Grade/Level threshold Pay progression BP April Federal Register 20

Do. D Best Practices Staffing Features v v 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 30 -Nov-20 21

Do. D Best Practices Performance Features v v v 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 30 -Nov-20 22