DOD, OPM issue proposed rules for NSPS

The Defense Department and the Office of Personnel Management have proposed rules for DOD's National Security Personnel System, including changes in compensation and performance management.

The Defense Department and the Office of Personnel Management today issued proposed regulations for DOD’s National Security Personnel System. The proposed rules, published in the Federal Register, include modifications to NSPS’ compensation structure and performance-management processes. The proposed regulations are designed to bring NSPS into line with changes that Congress made to the new personnel system in the national defense authorization law for fiscal 2008. The law included language that restored collective-bargaining rights and appeal rights to DOD workers covered by NSPS and exempts blue-collar workers from switching to NSPS. It also restricted DOD’s ability to award performance-based pay under NSPS, limiting the system's 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 receive. The proposed regulations also reflect lessons learned from DOD’s experience in implementing the system over the last two years, that department's officials said. In the area of compensation, the proposed rules would remove the link between increases in the minimum rate in a given pay range and across-the-board increases in pay. The change would give management the flexibility to make adjustments to pay that reflect market rates for certain occupations, DOD officials said. In addition, the proposed rules would retain the flexibility that management needs to set pay in a given range,  but would also impose limitations in pay increases that cannot be exceeded without higher-level review. Among other proposed changes, pay for employees moving to NSPS from other pay systems would be set using “adjusted salary”—which includes locality pay or other special rates — instead of base salary. The revised regulations are also intended to improve fairness and equity in performance management. For example, the new rules would require a higher-level review of performance expectations. “This review would help ensure that assigned employee objectives are reviewed for appropriateness and consistency in and across the organization,” officials said. “This safeguard at the beginning of the performance management process helps to ensure equity at the end of it when performance payouts are paid from a common pay pool fund,” they added.The new rules would also give employees the right to request a review of their performance ratings and provides salary increases for employees who do not meet the minimum period of performance due to an approved paid leave status. In issuing the proposals, officials said that despite the significant modifications that Congress made last year to NSPS, the law “continues to promote a performance culture in the which the performance and contributions of the DOD civilian workforce are linked to strategic mission objectives and are more fully recognized and rewarded.” Comments on the proposed rules are due by June 23, officials said.
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