FMA PRESIDENT IN FEDERAL TIMES ON DEMISE OF NSPS - October 12, 2009

NSPS: Dead by 2012?

By Stephen Losey, Federal Times reporter

The Defense Department’s highly controversial performance-pay system would be dismantled under a legislative proposal passed by the House and expected to pass the Senate this week.

The provision to scuttle the National Security Personnel System and send the 205,000 covered employees back to their previous pay systems is included in the 2010 Defense authorization bill.

The bill also would slow the intelligence community’s work on its own interagency pay-for-performance system, which is based in part on the National Geospatial-Intelligence Agency’s Defense Civilian Intelligence Personnel System. The bill suspends DCIPS for all intelligence employees except those at NGA, who have had the system for a decade, until the end of 2010 and calls for the Pentagon, OPM and the Office of the Director of National Intelligence to review of the system by June.

The bill has drawn a veto threat from President Barack Obama over a separate measure unrelated to NSPS. But even if the bill is vetoed and sent back to Congress for revisions, the NSPS provisions are likely to survive.

While the end of NSPS would mean defeat to reform proponents within the Pentagon, experts say the failure of NSPS would not end efforts to link pay to performance in the federal government. And some think that taking NSPS — and the raised temperatures that it inspired — out of the equation might make it easier for the Office of Personnel Management to overhaul the government’s 60-year-old General Schedule system.

“It does clear the decks,” Federal Managers Association President Darryl Perkinson said. “This opens the door to discussions to bring unions back on board, and see if there is a viable pay-for-performance system that can be put into place.”

One of the fiercest opponents of NSPS, American Federation of Government Employees President John Gage, said he’s “elated” to see its impending demise, but also signaled a willingness to move forward on other systems.

Gage said he would work with the Pentagon to put together a new departmentwide performance appraisal system, as called for in the authorization bill, and pledged to cooperate with OPM as it starts gathering ideas on creating a new governmentwide performance appraisal system. OPM Director John Berry has said that system will be used to reward the government’s highest-performing workers.

“We’re going to cooperate as fully as we can on that initiative,” Gage said. OPM and the Pentagon would not comment for this story.

Impact on employees

If the bill is passed by Congress and signed by Obama, Defense would have six months to start transferring NSPS employees back to the General Schedule or whatever system they originally fell under. All employees would have to be out of NSPS by Jan. 1, 2012.

It would be up to agencies to transfer their employees back to GS by matching their current salaries with the closest grade and step level. The bill says no employee will lose money.

But Perkinson said he worries that some employees who did well under NSPS could find their salaries capped under GS. If an employee who received large raises is returned to his original GS grade at the step 10 level, he would not be able to receive further step increases, and his only raises would come through the usual cost-of-living increase. Perkinson said Defense should adopt rules to prevent that from happening.

“I’d hate to see someone who was rewarded because they were a high performer be capped out,” Perkinson said.

The bill also would give Defense Secretary Robert Gates six months to propose a new personnel system in lieu of converting employees back to the GS system. Experts say that’s a long shot. Gates would have to explain why a new system is needed and show how it will avoid the pitfalls of NSPS, and Congress would have to pass it as part of the 2011 Defense authorization bill.

Former acting OPM Director Michael Hager said, however, “Gates would be remiss not to try and put his energy into [proposing a replacement system]. He’s put some of his best talent into [NSPS]. He should at least get the fundamentals of a foundation established and not throw them away. But it’s going to be difficult.”

Rep. Jim Moran, D-Va., said he “wouldn’t be at all surprised” if Gates proposed a new system, and said he would seriously consider a new proposal. But many other leading Democrats in Congress oppose NSPS, and anything resembling it is likely to draw serious opposition.

Gage said it doesn’t make sense for the Pentagon to throw its energy into creating yet another personnel system under such a tight deadline, when OPM will be creating a new governmentwide system that will absorb it.

The bill also calls for creating a performance appraisal system for all Defense employees that would determine bonuses and other performance-based actions. It does not spell out details on how that system might work, but some say the performance appraisal system could resemble NSPS’ appraisal system.

In August, an independent panel appointed by the Defense Business Board said NSPS was systemically flawed and needed to be rebuilt from the ground up. The panel said that the only thing keeping it from recommending complete dismantling of NSPS was its performance appraisal system, which it said succeeded in helping align employee goals with organization goals.

“The whole NSPS system has a certain amount of political baggage,” Moran said. But “the Obama administration believes in pay for performance. They could see it [as a way to start over] and some aspects [of a new personnel system] could look very much like the old system.”

Employees have mixed reaction

Many employees under NSPS said they hated the system, but some are sad to see it possibly go.

One Army Corps of Engineers employee, who asked for his name not to be printed because he was not authorized to speak to the media, said NSPS held poor performers to account.

“Some of us actually work hard, do a good job, and like being rewarded for it,” he said. “NSPS is unfair to workers that got a rating of 1 or 2? They shouldn’t be getting raises, they should be getting fired. Now my extra efforts will go unrewarded once more.”

But Dianne Edwards, an accountant at Naval Facilities Engineering Command in Norfolk, Va., said NSPS “was a bummer from the beginning.” She said she got a smaller raise in January than she thought she deserved, and said the big raises instead went to managers’ favorites.

“I thought it was going to be a really good system and weed out the poor performers,” Edwards said. “But if you were not in the right clique, you lost money. It was almost like being back in high school.”

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