Obama gives the heave-ho to DOD pay for performance

Critics laud the move, calling the program unfair and dysfunctional

The National Security Personnel System, the Defense Department's effort to tie salary to job performance, is on its way out. On Oct. 28, President Barack Obama signed the National Defense Authorization Act for the 2010 fiscal year, which includes provisions to kill the program.

The DOD employees working under NSPS — more than 200,000 — will revert to the General Schedule system, according to the bill’s provisions.

Many NSPS critics praised the move because they contend that the system was unfair and dysfunctional.

Randy Erwin, legislative director at the National Federation of Federal Employees (NFFE), said the NSPS policy stripped employees of their right to collectively bargain pay rates, which can be aided by union backing. Officials familiar with the situation, speaking on background, said the program also allowed managers to play favorites and abuse the system, a charge with which Erwin agreed.

Congress restored collective bargaining rights in 2008 and made other changes to the system intended to assuage its critics.

However, many criticisms remained. “There is evidence that pay for performance was discriminatory and used as a way to take money from lower-paid employees and routed it to higher-paid employees,” Erwin said.

The system's proponents had championed it for being flexible and giving managers more freedom to reward their best employees. In 2008, Mary Lacey, then program executive officer for NSPS, reported that the highest-rated employees in the system got raises averaging 10 percent under NSPS. Across the board, she said, raises under NSPS averaged 5.4 percent. 

About the Author

Amber Corrin is a former staff writer for FCW and Defense Systems.

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