DOD adjusts to new pay rules

The federal government’s effort to move to a pay-for-performance model is still a work in progress as Congress, employee unions and agencies modify the rules. The most recent change occurred when Congress created new rules governing the Defense Department’s National Security Personnel System.

However, despite a still-fluid situation at DOD, the Office of Personnel Management recently issued a report that asserts that many agencies have come far in successfully using pay-for-performance systems.

President Bush signed the fiscal 2008 Defense Authorization Act Jan. 28. It includes language that restores collective-bargaining rights and appeal rights to DOD workers covered by NSPS and exempts blue-collar workers from switching to NSPS.

The law also restricts DOD’s ability to award performance-based pay under NSPS, limiting its scope to 40 percent of an employee’s pay increase. Workers with satisfactory ratings will receive 60 percent of the annual pay raise that most federal employees get.

Mary Lacey, NSPS program executive officer, said most of what Congress did was strike labor-relations portions of NSPS that DOD never implemented.

Lacey said DOD will continue its phased implementation of NSPS, converting 56,000 civilian employees to the system this spring and raising the total number of covered workers to more than 184,000.

DOD has no immediate plans to bring employees represented by labor unions into the system. Lacey said the department first has to rewrite regulations related to the technical design of NSPS.

“Until we go through [the rule-making process] and have a chance to talk with some of the unions on national-level bargaining, we’re not making any plans.”

DOD’s unions commended the changes in the NSPS law, but they said the system still is defective. “We believe these changes greatly improve the personnel system over its previous form, but NSPS is still far from perfect in our opinion,” said Richard Brown, president of the National Federation of Federal Employees.

Officials at the American Federation of Government Employees, while expressing approval of the changes, said NSPS is seriously flawed because of fairness, transparency and accountability issues. However, AFGE said it will drop its lawsuit over NSPS because employee rights issues were corrected in the new legislation.

Meanwhile, OPM said its latest research demonstrates how far the federal government has come “in successfully using performance-based pay to create a results- oriented performance culture attractive to the next generation of federal employees.” OPM found that more than 280,000 employees are covered by performance- based pay systems.

Colleen Kelley, president of the National Treasury Employees Union, countered by saying that many of those employees experience a slew of grievances, arbitration, litigation, high attrition rates and rock-bottom employee morale.

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