Personnel and Readiness

APEX 23 Orientation Program

Transforming DoD’s Personnel Paradigams

September 11, 2006

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Our Focus

• We are engaged in a long, irregular war• The All Volunteer Force is our paradigm• Cost of manpower will rise more rapidly

than budget• We will complete transition to an

Operational Reserve• Civilians can play a larger role• Operations will be integrated• Geographic focus is on Mideast,

South/Southeast Asia, East/Northeast Asia

Personnel and Readiness

Military Recruiting, Retention and

Compensation

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Per

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Benchmarks

High School DiplomaGraduates

Category I-IIIA

ASVAB Misnorming, 1977-81.

• For past 20 years, Services exceeded DoD quality benchmarks

• But lessons learned in early years of AVF show how important recruiting resources are to achieving numerical and quality goals

DoD Recruit QualityActive Duty Enlisted

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Recruiting Situation (Active Duty)YTD Accession Achievement

(Thru August 2006)

Quantity Quality

Active Duty Enlisted Recruiting (Preliminary Through August)

Accessions Goal Percent of Goal

% High School Diploma Graduate (HSDG);

DoD Benchmark = 90 percent

% Scoring at / above 50th

Percentile on Armed Forces Qualification;

DoD Benchmark = 60 percent

% Scoring at / below 30th

Percentile on Armed Forces Qualification;

DoD Benchmark = 4

percent

Army 72,973 70,200 104% 81.2% 61.4% 3.7%

Navy 32,589 32,589 100% 94.6% 74.7% 0.0%

Marine Corps 28,620 28,353 101% 95.7% 68.4% 1.1%

Air Force 28,256 28,124 100% 98.0% 78.3% 0.0%

DoD Total 162,438 159,266 102% N/A 91.0% N/A 69.0% N/A 1.7% N/A

G

G G G

G G G

G G G

G

G

G

G

G

• All Services will make recruiting goals in 2006

• Army below HSDG benchmark

• Army DEP starting FY2007 will be low ≈ 14% (vs. 25-35%)

R

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• Retention of sufficient numbers of quality people by skill and grade is essential to the sustainment of a ready, well-trained & experienced force

• Services have seen great success in retention since the start of the war on terrorism but while retention will be challenged, we expect continued success in the future

FY2001 FY2002 FY2003 FY2004 FY2005 FY2006Annual % Annual % Annual % Annual % Annual % Mission YTD thru August 2006

Initial 101% 102% 110% 108% 103% 104%

Mid-career 102% 102% 106% 104% 103% 94%

Career 102% 105% 100% 109% 129% 108%

Initial 100% 105% 110% 97% 98% 92%

Mid-career 99% 102% 105% 100% 92% 99%

Career 96% 97% 102% 102% 100% 111%

First term 100% 103% 100% 101% 103% 111%

Subsequent NA 126% 94% 137% 138% 123%

First Term 102% 131% 110% 115% 108% 117%

Mid-career 92% 104% 92% 93% 116% 116%

Career 95% 100% 100% 102% 106% 109%

Air Force

Active Enlisted Retention

Army

Navy

Marine Corps

Active Retention Trends

7Defense Advisory Committee on Military Compensation (DACMC) Recommendations

• Change non-disability retirement system (i.e. vesting)

• Revamp Basic Pay table to better reward performance and to support longer career profiles where desirable

• Change housing allowances/other allowances (remove discrepancies in pay unrelated to performance)

• Consolidation, simplification and enhancement of Special and Incentive Pays

• Revise the health benefits for retirees system--more closely align benefit’s value to retiree with its cost to the Department of Defense

• Periodic evaluation of quality-of-life programs to ensure they are cost-effective and adequate

• Review of Reserve Component pay/benefits to ensure equality to Active Component members

Personnel and Readiness

National Security Personnel System

(NSPS)

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What is NSPS?• Streamlined and more responsive hiring process• Modern compensation system based on pay for

performance and market based pay; performance management system that:• Values performance and contribution • Encourages communication• Supports broader skill development • Promotes excellence

• Flexibility in assigning work• Preservation of employee benefits, rights and protections• Preservation of employee collective bargaining rights

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Major Design Elements of NSPS

Human Resources (HR) System• Classification - Simple, flexible pay banding structure• Compensation - Performance-based, market-sensitive• Performance Management - Linked to agency mission; results oriented;

annual pay increase based on performance rating• Staffing – more flexible authorities to allow SECDEF to act quickly to

respond to mission needs: the right person, in the right place, at the right time

• Workforce Shaping - Streamlined, mission-responsive reduction in force procedures

Adverse Actions and Appeals - Enjoined• Mission oriented disciplinary system with streamlined processes to

quickly resolve disputes

Labor Relations System - Enjoined• Collective bargaining approach that recognizes unique national security

mission of DoD• Reduced scope of bargaining• Streamlined bargaining process aimed at quicker resolution of labor

disputes and focus on mission

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Spiral 1: Where We Are • Two and a half years of joint design and development

• “Spiral Development” approach, with Program Executive Office leading effort; oversight by DepSecDef

• Partnership with Office of Personnel Management• Aggressive, comprehensive communications strategy

• Spiral 1.1 implemented on 30 April 2006 • HR provisions only: pay banding, pay for performance, staffing, reduction in force• Approximately 11,000 non-bargaining unit employees• 12 organizations spread across the Department

• All employees, supervisors, and managers trained (web based orientation & classroom training, with focus on performance management)

• Spiral 1.1 Performance Management• Workforce trained in HR Elements and Performance Management• Performance plans linked to organizational goals and objectives • Rating cycle through October 2006• Performance payout in January 2007

• DoD announced Spiral 1.2 – over 66,000 non-bargaining unit employees• Conversion window October 2006 to January 2007• Workforce trained in HR Elements and Performance Management• Rating cycle through September 30, 2007• Performance payouts in January 2008

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Spiral 1.1 and 1.2 Workforce Concentrations

Source of chart data throughout: Unless otherwise noted, DCPDS, as of 11 May 2006, start of Spiral 1.1.

US, AK, HI

DC, DE, NJ, VA

100+

200+

1,000+

5,000+

Over 77,000 employees under NSPS by January 2007; larger population than most Executive Branch Departments and all Independent Federal Agencies

Personnel and Readiness

The Operational Reserve: Trends in Reserve Force

Management

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Total Force Contributions

68.3 M Duty Days

5.3 M Duty Days

0.9 M Duty Days 13.5 M Duty Days 12.7 M Duty Days

41.3 M Duty Days

62.0 M Duty Days

65.3 M Duty Days

44.2 M Duty Days

FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05

DESERT SHIELD / STORMCONTRIBUTION

ONE / OEF/ OIF CONTRIBUTION

NOTE: DATA SHOWS“DIRECT SUPPORT” ONLY, NOT “INDIRECT SUPPORT” (e.g., RECRUITING, USPFO, MOST AGR SUPPORT).

NOTE: DATA SHOWS“DIRECT SUPPORT” ONLY, NOT “INDIRECT SUPPORT” (e.g., RECRUITING, USPFO, MOST AGR SUPPORT).

RC CONTRIBUTIONS INCLUDING HAITI, BOSNIA, SWA, KOSOVO PRCs

All Reserve Components (e.g., includes USCGR)

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Reserve Force Mobilization StatisticsCurrent Selected Reserve Members Ever Mobilized for ONE/OEF/OIF

Data as of: April 30, 2006

Members Mobilized Once for ONE/OEF/OIF

301,111Members Not Mobilized

for ONE/OEF/OIF

447,543

Members Who Served More than Once in

ONE/OEF/OIF

74,458

Not Mobilized – 54.4%Mobilized – 45.6%

Total Members currently serving in the SelRes 823,112

Total members mobilized for ONE/OEF/OIF 375,569 45.6%

Total members who have served once in ONE/OEF/OIF 301,111 36.6%

Total members who have served more than once in ONE/OEF/OIF 74,458 9.0%

Total members not mobilized for ONE/OEF/OIF 447,543 54.4%

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The New “Operational” Reserve

Concept:

The new guard and reserve will be organized, trained and equipped to support operational military mission requirements to the same standard as the Active component. Individuals and units will be tasked to prepare for and participate in missions, across the full spectrum of operations, in a cyclic or periodic manner that provides predictability for service members and their families and employers.

Key attributes:• Limits involuntary mobilization to predictable and sustainable rates (e.g., one year in every six) • Reduces the need for involuntary mobilization during the early stages of a rapid response operation• Provides a range of participation opportunities and enhances volunteerism

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New Availability and Service Paradigm

STRATEGIC RESERVE

Full Time365 Days

Traditional Reservists

38 Days

• Separate systems; difficult to transition between them.

• RC employed using multiple authorities. • Mobilization or “workarounds” needed for extended duty beyond minimum obligation.• Multiple management organizations.

OPERATIONAL RESERVE

Continuum of Service

• Single system with enhanced ability to move between full-time and part-time status. • “Rheostat” capability to manage contingent workforce.

•Enhanced ability to access “volunteers” and attract civilian participation.•Reduced need for involuntary mobilization.

• Potential to merge duplicative structures.

Full Time365 days

Variable RC Pool39-365 days

Traditional Reservists

39 Days

InnovativePrograms0-39 days

Personnel and Readiness

Transformation: A Journey, Not A Destination