DOD, DHS progress with personnel reforms

The Defense and Homeland Security departments are making headway on personnel reforms, despite resistance from federal labor unions, court challenges and legislative intervention by congressional Democrats, top human resources officials at DOD and DHS said today.

'We're well into the implementation,' said Mary Lacey, program executive officer for DOD's National Security Personnel System (NSPS), at a Leadership Breakfast in Washington sponsored by Government Executive magazine.

Marta Perez, chief human capital officer at DHS, also spoke. She said department officials 'feel very confident that we have designed what I consider a state of the art performance-management system and we are confident about our ability to roll it out.'

Under both departments' personnel reform plans, employees are being converted from the General Schedule pay system, which provides automatic raises, to results-based systems where performance appraisals determine compensation.

At DOD, Lacey said, about 113,000 civilian employees, mostly those in white-collar, general service positions, are now covered by NSPS' HR provisions. About 10,000 of those workers received the first compensation adjustments under the new system in January. The average pay increase was 3.7 percent, but the 'highest performers' merited increases of 10 percent to 11 percent, she said.

DOD has not deployed the labor-relations portions of NSPS, which are still tied up in court. 'In fact, we're not even spending any money to prepare to implement them at the moment,' she said.

In May, the U.S. Court of Appeals for the District of Columbia Circuit reversed a ruling last year by a lower court that found that parts of NSPS were illegal. In its 2-1 decision in the case, the appeals court said the way NSPS was designed provided appropriate due process and protections for employees. A coalition of DOD unions has asked the appeals court to reconsider its decision.

The labor relations pieces of NSPS are also the target of a House-approved amendment to the fiscal 2008 Defense appropriations bill that would prevent DOD from funding them until the collective bargaining and labor rights regulations are overhauled.

At DHS, meanwhile, courts also have enjoined the labor relations components of its plan but officials are currently negotiating changes in those regulations with DHS labor unions, Perez said.

Despite such impediments, personnel reforms and the pay flexibilities that go with them are critical to DHS' future, she said. 'They are really key to our ability to attract and retain talent,' she said.

Perez and Lacey agreed that extensive training for managers and employees is crucial to making pay reform work.

'Before we convert any employees, they receive extensive training to familiarize them not only with the nuts and bolts of [NSPS] but what it means to them and how it changes what they do day to day,' Lacey said. 'They have extensive discussions with their supervisor so they can understand the framework of what they do and how it impacts the accomplishment of the organization's mission, goals and objectives,'

The two officials also concurred that personnel reform cannot happen overnight.

'There is a need to understand that it is just going to take time for these changes to take hold,' Perez said.

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