September 14, 2005

Department of Defense

NSPS Overview

Presented to the 21st APEX Orientation Program

Mary E. LaceyProgram Executive Officer

September 2005 2

What is NSPS?

A flexible, agile, and responsive personnel system to manage DoD civilians in today's environment

Provides the Department with tools to shape a more effective and efficient workforce Performance management that values performance,

rewards contribution and promotes excellence Streamlined and more responsive hiring process Flexibility in assigning work Preservation of employee benefits, rights and

protections

September 2005 3

How We Got Here

November 2003, Congress granted DoD broad authority to establish a new human resources management system to support its critical national security mission

Early 2004, DoD adopted acquisition management model for NSPS program Program Executive Office established for design and

implementation (“build and buy”) MAJCOMs and SYSCOMs operate, maintain and

incrementally improve Oversight and guidance from senior leadership Partnership with OPM

Issued proposed NSPS regulations on February 14, 2005

September 2005 4

How We Got Here (cont’d.)

Received ~58,000 comments from citizens, employees, unions, DoD organizations, other Federal agencies, public interest groups, & members of Congress

Testified before: Senate Subcommittee on Oversight of Government Management,

the Federal Workforce and the District of Columbia, Committee on Homeland Security and Governmental Affairs, March 15, 2005

House Subcommittee on Federal Workforce and Agency Organization, Committee on Government Reform, April 12, 2005

Senate Committee on Armed Services, April 14, 2005

Engaged in “meet and confer” (April 18 – June 16) with employee unions to attempt to find common ground

Over 40 changes in Federal Register Notice

September 2005 5

What NSPS Does Not Change

Merit System Principles Rules against prohibited personnel practices Whistleblower protection Veterans Preference Benefits (retirement, health, life, etc.) Anti-discrimination laws Fundamental due process Allowances and travel/subsistence expenses Training Leave and work schedules Other personnel systems in law Lab Demo organizations (until FY 08)

September 2005 6

What’s Changing?

System Element Current Proposed

Performance-based pay Within-grade step increases based on longevity

Individual increases based on performance

Market-based pay Based on location; one size fits all Based on location, tailored to occupations

Disciplinary actions Merit Systems Protection Board can lessen penalties

MSPB can lessen penalties only in most extreme circumstances

Mandatory Removal Offenses None today Secretary may define list of offenses that require termination

Employee appeals Merit Systems Protection Board adjudicates employee appeals

MSPB AJ’s hear appeals using NSPS rules

Changes to work assignments Must bargain with local unions prior to acting

Scope of collective bargaining limited with no delay in acting

Labor-management disputes Federal Labor Relations Authority decides disputes

Agency board appointed by Secretary decides disputes

Work changes based on preparing or preventing emergencies

Must bargain with unions prior to acting

Scope of collective bargaining limited with no delay in acting

Determine performance-based pay rules

Must bargain with unions No bargaining required

Pa

yD

isci

pli

nar

y A

ctio

ns

Co

llec

tive

B

arg

ain

ing

September 2005 7

LR Changes Under NSPS

NSPS provides an opportunity for greater union involvement in workforce issues

Unions are encouraged to take advantage of these processes and benefits they offer

Authority to bargain at national level, multi-unit Scope of bargaining narrowed

Content of DoD and Military Department implementing issuances are no longer bargainable Unions may still bargain impact

Implementing issuances subject to continuing collaboration

September 2005 8

Adverse Actions Changes Under NSPS

Designed to recognize need for workplace accountability, provide efficient tools for dealing with performance and conduct issues, and protect rights of employees

Single process for taking adverse actions based on performance and/or conduct

Streamlined 15-day notice/10-day reply period Ensures due process Allows Secretary to designate Mandatory

Removal Offenses (MROs)

September 2005 9

Appeals Changes Under NSPS

Provides for streamlined, efficient appeals process that provides deference to DoD’s critical national security mission, while preserving employee protections and due process.

Expedited appeals process, using MSPB administrative judges (AJ), with improved procedures

Provides for DoD review of decisions Single burden of proof standard: preponderance Mitigation by MSPB permitted only with proper

consideration of mission impact Judicial review retained

September 2005 10

HR Design Highlights

Staffing—the right person, in the right place, at the right time

DoD Hiring Authorities Ability to streamline the hiring process Pay setting flexibilities DoD qualification requirements Veterans’ Preference rights protected

RIF—streamlined, mission responsive

Less Disruption More Emphasis on Performance Bump and retreat combined into displacement Veterans’ Preference rights protected

September 2005 11

HR Design Highlights

Classification—simple, flexible

Career Groups Pay Schedules Broad Pay Bands Simplified Classification Guidance DoD Series

Compensation—performance based, market sensitive

Rate range adjustments Performance pay out Local market supplement No change to incentive awards

Performance Management—linked to Agency mission

High Performing workforce Pay increases Includes conduct and professional demeanor Standard performance factors

September 2005 12

Performance Management

Performance management system designed to: Foster high-performing culture; Encourage employee engagement and robust

communication, and Enhance overall effectiveness of DoD

Supervisors work with employees to establish performance goals and expectations, aligned with mission-related goals

Performance objectives need to be specific, measurable, acceptable, realistic and timely.

Ongoing feedback and communication between supervisor and employees

September 2005 13

Who is Affected by NSPS?

NSPS Human Resources System (Pay, performance, hiring, RIF, adverse actions, and appeals provisions) Vast majority of DoD employees eligible for coverage:

initially apply only to selected General Schedule employees in Spiral One organizations with certain categories excluded (e.g., intelligence personnel, Defense Labs)

Employees in special pay/classification systems (e.g., wage grade) will be phased in later

NSPS Labor Relations System Applies to all employees and labor organizations

currently covered by Chapter 71 of title 5 Will be implemented across entire Department when

final regulations are effective

September 2005 14

NSPS Training

Target audiences Employees Senior leaders, managers, supervisors, pay pool

managers/administrators HR and LR practitioners

Dual focus Functional training on NSPS system Soft Skills

Learning objectives Educate employees about NSPS Teach skills and behaviors necessary to implement and

sustain NSPS

Promote a culture that focuses on results, values performance, rewards contributions, and promotes

excellence

September 2005 15

Implementation Plan

Spiral One Rollout – GS, GM, AcqDemo employees; CONUS only Spiral 1.1 – 69,000 Spiral 1.2 – 48,000 Spiral 1.3 – 152,000 Total Spiral One – 269,000

Spiral Two – rest of workforce including WG employees

Spiral Three – DoD laboratories should legislative restrictions be eliminated

September 2005 16

Conversion Adjustment – WGI Buyout

January 2006 Pay Adjustment for Spiral 1.1

Protection of Pay Pool Funding

Department Financial Policy Decisions

September 2005 17

Next Steps

Publish Regulations and move into Continuing Collaboration on Implementing Issuances

Roll out training to key audiences

Support Components with implementation activities

Prepare for integration of additional Spirals

September 2005 18

Summary

A modern, flexible, and agile human resource system Responsive to the national security environment Preserves employee protections and benefits

“ 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

January 2005

September 2005 19

Questions ?

www.cpms.osd.mil/nsps

September 2005 20

Most Frequently Asked Questions

Will employees lose pay under NSPS? No Employees will not lose pay upon conversion to NSPS;

some will have a pay increase What happens to the January (general) pay

adjustment (GPI)? Funds will be paid out as a result of:

Performance payout process Rate range adjustments Local market supplements Advancement in developmental positions

What about the January 06 GPI for Spiral 1.1 employees? Spiral 1.1 employees will receive the January 06 GPI

Employees must have been under the new system long enough to be evaluated properly before GPI can be placed at risk

September 2005 21

Most Frequently Asked Questions (Cont’d)

What about within grade increases?Under proposed regulations

Employees will receive a prorated buy-out for within grade increases when they are placed into the system

After that, those funds will become part of the monies available for performance payouts or the other increases mentioned above

How will DoD insure the money is really paid out to the employees?DoD is currently developing a financial policy to

insure these funds are protected

September 2005 22

Most Frequently Asked Questions (Cont’d)

Will veterans’ preference for RIF and hiring go away? NoNSPS preserves veterans’ preference.

Will seniority and veterans’ preference count in the event of a reduction in force (RIF)? YesSeniority is still a factor in RIF. Veterans’ preference eligibles are still retained

over non-veterans in RIFGreater emphasis on performance in RIF retentionPerformance ahead of length of service

Tenure groupVeterans’ preferencePerformanceLength of service

September 2005 23

Most Frequently Asked Questions (Cont’d)

Will there be a process for employees to challenge their performance rating? YesAdministrative reconsideration process in

implementing issuancesBargaining unit employees may use either the

administrative reconsideration process or a negotiated grievance procedure.

Will there be a process where employees can exercise their fundamental rights to grieve or appeal unfair decisions or adverse actions? YesEmployees will continue to retain critical rights

such as merit systems principles, due process, whistleblower protections, and protection against prohibited discrimination and prohibited personnel practices.

September 2005 24

Most Frequently Asked Questions (Cont’d)

Is the proposed appeal system an impartial process? Yes It retains MSPB administrative judges as initial

adjudicators of employee appeals and adverse actions

Employees retain right to petition full MSPB for review of the record of a final DoD decision

Will DoD continue to have bargaining units and employee unions? YesThe implementation of the NSPS labor relations

system will not eliminate unions or bargaining units. Employees will still be able to participate in labor organizations and to bargain collectively.

September 2005 25

Back Up Slides

September 2005 26

Compensation Architecture

Notional Career Groups Standard Career Group Engineering and Scientific Career Group Medical Career Group Investigative and Protective Services Career Group

Pay Schedules Professional and Analytical Technician/Support Supervisory

Pay Bands Entry Journey Expert

September 2005 27

Pay Band Illustration

Sample NSPS Pay Band Structure

Career Group APay Schedule 1 (nonsupervisory)

Level 3 – Senior Expert

Level 2 – Full Performance Level

Level 1 - Entry/Developmental Levels represent rate ranges associated with ranges of work in career group

Rates (minimum/maximum) may be set and adjusted based on market factors

Separate pay schedules may be established for certain occupations, where market or other conditions warrant

$ $ $ $ $

September 2005 28

Notional NSPS Pay Schedulesand Career Groups

Professional and Administrative174,052 (56%)

Technical and Support102,428 (33%)

Supervisor35,129 (11%)

Standard Pay SchedulesTotal Population

311,609

Technician and Support19,663 (25%)

Supervisor8,556 (11%)

Engineering and Scientific Career Group Total Population

79,338Professional51,119 (64%)

Physician742 (3%)

Technician and Support14,151 (61%)

Supervisor1,155 (5%)

Medical Career GroupTotal Population

23,031Professional6,983 (30%)

Protective Services17,208 (68%)

Supervisor3,326 (13%)

Investigative and Protective Services Career Group Total Population

25,377Investigative4,843 (19%)

439,355(DoD white collar workforce)

September 2005 29

Standard Career Group

September 2005 30

Engineering and ScientificCareer Group

September 2005 31

Medical Career Group

September 2005 32

Investigative and ProtectiveServices Career Group

September 2005 33

Investigative and Protective Services Career Group (cont.)

September 2005 34

Local Market Supplements AbsorbSpecial Salary Rates

Special Salary Rate Strategy

Sunset as many as possible without distorting pay ranges

Basic pay bands will accommodate many special salary rates

“Tailored” local market supplements will be set to accommodate residual special rates

September 2005 35

Hypothetical Example

Engineering and Scientific Career Group

World Wide Base Rate + Market Pay = Total Pay

Professional Engineer and Scientist

San Francisco Market Rate 25%

Mechanical Engineer

San Francisco Market Rate 32%

Electronic Engineer

San Francisco Market Rate 42%

Engineer Technician

San Francisco Market Rate 22%