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| Message: | Prospects for pay reform dim with NSPS By GREGG CARLSTROM November 02, 2009 The Obama administration’s personnel chief, John Berry, appears to be putting governmentwide pay-for-performance on the back burner in the wake of Congress’ decision to terminate the Defense Department’s controversial National Security Personnel System. The Pentagon has until Jan. 1, 2012, to rescind or replace NSPS under the Defense Authorization Act, signed last week by President Barack Obama. Berry declined to discuss how the end of NSPS affects his pay-for-performance plans, though he told Federal Times last week that pay for performance is not an immediate priority for OPM. “My primary focus right now is on our three short-term goals ... improving veterans’ hiring, reforming hiring and recruitment, and work-life and wellness programs,” Berry said. “Pay for performance ... obviously we are aware that we need to wrestle with that issue.” The Defense Authorization Act didn’t kill the idea of pay for performance. In fact, legislators want Defense Secretary Robert Gates to submit a proposal for a new pay system. Several lawmakers, including Sen. Daniel Akaka, D-Hawaii, have called for the department’s pay system to be reformed. Experts say the department could decide to keep elements of NSPS, like its performance appraisals, and design a new system that links the appraisals more effectively to pay. “There’s been a general endorsement, including by this administration, of pay for performance as a principle,” said a former senior Defense Department official who worked on the NSPS program. “So now the administration faces a strategic choice. Does it want a governmentwide system? ... Or will it devise a [Defense]-specific proposal?” All of this will mean a scramble for policymakers and human resources managers, at Defense and OPM, who will need to choose a new pay system within the next 26 months. If the administration wants to pursue a pay-for-performance system — at Defense or across the government — it will face several major obstacles. One is the calendar: The new system needs to be in place by 2012, which means the White House needs to send a legislative proposal to Capitol Hill by early 2011. That leaves just over one year to develop a sweeping new pay system — a tall order, according to many experts. The administration could lengthen that timeline by simply returning Defense employees to the General Schedule. Then it could develop a pay-for-performance system on its own schedule. But proponents of pay for performance caution against that. “There are only so many transitions you can put the workforce through,” the Defense official said. The administration will also have to overcome opposition from employees, labor unions and other critics of NSPS. Many of them accused the department of linking pay and performance before it had properly figured out how to measure performance. “They wanted to show that it worked. They moved too quickly,” said John Palguta, vice president for policy at the nonprofit Partnership for Public Service. “Had they focused more on the performance management part before they got to the pay part, it would have gone more smoothly.” The Obama administration will have to overcome similar skepticism if it plans to expand pay for performance across the entire government. The National Treasury Employees Union doesn’t represent any Defense employees. But Colleen Kelley, the union’s president, told Federal Times she was happy to see NSPS terminated because she was worried about a similar system taking hold across the government. “As long as the system was on the books, there remained a danger that elements of it could be adopted throughout government,” Kelley said. “This demonstrates that any system created without the input of employees and their representatives is doomed to fail.” Robert Tobias, an American University professor and a member of a three-man panel that reviewed NSPS for the department, said the administration should use the next few months to talk with unions and other stakeholders before announcing a new system. “The first thing is, you’ve got to get buy-in from the union folks, and from employees,” Tobias said. The former Defense official agreed, and said the administration would have to rebrand the program. “If I were the Obama administration, I don’t think I would ever utter the phrase ‘NSPS’ again,” the official said. If the Defense Department opts not to pursue a new pay-for-performance system, experts say, it will likely return its employees to the General Schedule — either as it exists today, or a modified form. Labor unions and management organizations have been pushing for that approach. Bill Bransford, general counsel for the Senior Executives Association, said the GS system already gives managers the flexibility to link pay and performance. “I think the whole government has had a pay-for-performance system for decades,” Bransford said. “For poor performers, there’s a mechanism for dealing with them. ... They can be fired. And for good performers, there’s a way to reward them. To an extent we’ve always had a pay-for-performance system.” Palguta endorsed the idea of a modified GS system for the department; he said there would be too many obstacles to implementing a newly designed pay-for-performance system such as NSPS. But Palguta said the GS system would need significant changes, particularly to the grade system, which he described as an “inflexible” arrangement that requires Defense — and other agencies — to “force-fit every position into a rigid framework.” A revamped GS system should also allow agencies to offer different salaries for jobs in different categories or different geographic locations. Unions and management associations are also concerned about what happens to highly paid NSPS employees under the General Schedule. High-performing employees might be transferred back to the GS at Step 10, the top step at each grade. That could make it impossible for them to receive step increases. A modified GS system would also need a better way for managers to track the performance of their employees. The authorization bill Obama signed last week directs the department to create a performance appraisal system for all Defense employees. Experts say that system could resemble the performance appraisal system created by NSPS. http://www.federaltimes.com/index.php?S=4352552 | ||||
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