September 11, 2006 Department of Defense Mrs. Mary Lacey Program Executive Officer APEX Orientation...

September 11, 2006

Department of Defense

Mrs. Mary LaceyProgram Executive Officer

APEX Orientation Program

September 2006

DoD’s Flexible and Responsive Civilian Personnel System Performance management system that:

Values performance and contribution Encourages communication Supports broader skill development Promotes excellence

Streamlined, more responsive hiring process

Flexibility in assigning work

Preservation of employee benefits, rights, and protections

Preservation of rights to join a union

Tools for a more effective and efficient workforce

What is NSPS?

September 2006

Who is covered by NSPS?

NSPS Human Resources System

Vast majority of DoD employees eligible for coverage Initially applies only to selected GS/GM and Acquisition

Demo employees Employees in special pay/classification systems (e.g.,

wage grade) will be phased in later

Certain categories excluded (e.g. intelligence personnel, Defense Labs listed in NSPS law)

NSPS Labor Relations System Designed to apply to all employees and labor

organizations currently covered by Chapter 71 of title 5

Vast majority of DoD civilian employees

September 2006

AFGE v. Rumsfeld

Feb 27, 2006, District Court concluded that: DoD and OPM satisfied their statutory obligation to

collaborate in developing the system DoD lawfully had the authority to depart from chapter 71 in

establishing a new labor relations system New rule fails to ensure that employees can bargain

collectively National Security Labor Relations Board does not meet

Congress' requirement for "independent third party review" of labor relations decisions

Process for appealing adverse actions fails to provide employees with "fair treatment" as required by Congress

District Court permanently enjoined adverse actions, appeals, and labor relations

Department of Justice filed Notice of Appeal on April 17 and first appeal brief on August 10

September 2006

Where We Are 2½ years of joint design and development Spiral 1.1 implemented on 30 April 2006

Human Resources provisions Over 11,000 CONUS GS employees in 12 organizations across

the Department Successful IT conversion and payroll interface

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

Lessons Learned Workshop, June 21-22 2006 Announced Spiral 1.2 – over 66,000 employees

Human Resources provisions CONUS and OCONUS – two pay schedules (GS and APS) Conversion October 2006 – Jan 2007 Rating Cycle through September 2007 Performance payout in January 2008

September 2006

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+

September 2006

Major Design Elements

Classification Jobs in broad “pay bands” based on work nature and competencies

Compensation Pay directly linked to performance and mission accomplishment

Performance Management Linked to agency mission Job objectives and contributing factors influence rating Meaningful distinctions in employee performance Employee development with ongoing feedback and dialogue

Staffing Flexibility to respond to mission changes The right person, in right place, at the right time

Workforce Shaping Emphasis on performance

September 2006

Classification

Simple – Flexible Based on natural career groups, typical career progression and compensation Sunset special salary rates

Career Groups Establish new groups as needed Combine current groups if differences become unimportant Add, combine, eliminate, and/or move occupations

Pay Schedules and Bands Stratify occupations within career groups Reflect distinctions in occupations

Types of work Education requirements Career progression Pay practices

Investigative & Protective

20,5524%

Science & Engineering

101,01219%

Standard380,880

73%

Medical20,371

4%

September 2006

Compensation Philosophy

Performance based - market sensitive

Allows adjustments to market – be competitive

Salary increases tie to performance – not time on job Largely sunset special rate supplements

Move to market sensitive pay over time

Adjust career group, pay schedule, occupation, and/or pay band local market supplement pay differently than rest of government by exception for now

Establish analysis capacity this FY

September 2006

Performance Management System

Results-oriented, mission-focused Clear and understandable (fair, credible, and transparent) Direct link between pay, performance and mission accomplishment Reflect meaningful distinctions in employee performance Robust (capable of supporting pay decisions) Job objectives – the “What” – primary focus Manner of performance – the “How” – contributing factors that

influence the objective rating Supervisors are rated on at least one supervisory objective Monitor and develop employees Rate and reward performance

September 2006

Managing Performance

Supervisors know their employees, what they contribute, and how they spend their time

Understand that employees have different needs, motivations, and expectations about their work and work relationships

Your workforce has Role Models, Valued Performers, and Unacceptable Performers: your employees know that!

September 2006

Employee Motivators

What Managers Thought

1. Good wages2. Job security3. Promotion opportunities4. Good working conditions5. Interesting work6. Loyalty from

management7. Tactful discipline8. Appreciation9. Understanding attitude10.Feeling “in” on things

What Employees Said

1. Appreciation2. Feeling “in” on things3. Understanding attitude4. Job security5. Good wages6. Interesting work7. Promotion opportunities8. Loyalty from

management9. Good work conditions10.Tactful discipline

September 2006

Staffing & Workforce Shaping Philosophy

Staffing Right person –right place – right time

Develop capabilities to meet tomorrow’s threats Appointing authority for DoD Easily hire for critical needs Pay flexibility

Obtain and keep talent for mission needs Be competitive

Work Force Shaping Streamlined, mission responsive Performance based Less disruptive to employees and mission

Honor Veterans’ Preference

September 2006

In accordance with the NSPS statute:

“To the maximum extent practicable, for fiscal years 2004 through 2008, the overall amount allocated for compensation of

the DoD employees who are included in the NSPS may not be less than the amount that would have been allocated for compensation of such employees if they had not been converted to NSPS.”

Civilian pay accounts are not being increased, but you will have choices you didn’t have before.

Resource Management and Funding

September 2006

Senior Executive FM Policy Decisions

Conversion Adjustment Employee’s basic pay will be set at their current base

rate plus a pay adjustment equal to the amount earned to date toward their next WGI

January 2007 Pay Adjustment Grant equivalent of GS across-the-board pay increase

and locality pay increase for those employees with a current rating of record of Level 2 or above.

Pay Pool Funding Floor Department-wide funding floor set at DoD historical

average (2.26%) for continuing pay Components have discretion to set bonus portion of the

pay pool

Protection of Pay Pool Funding Components certify that pay pool funds were used only

for compensation of civilian employees

September 2006

Why Pay Pools Are Important

Provides mechanism for ensuring multi-level accountability and responsibility

Ensures decisions regarding compensation and rewards receive higher level review

Provides transparency Validates decisions made at the individual level

within the context of organization and mission Preserves the integrity of the performance

management system

September 2006

Evaluating NSPS in the Organization

PerformancePerformance

Utility of performance plans

Pay pool effectiveness and

fairness

PayPay

Pay flexibility and candidate quality

Roles and effects of control points

Hiring and Hiring and AssignmentsAssignments

Quality of newcomers

Ease of assignment change

&&PlanningPlanning

People and their

People and their

interaction

interaction

MissionMission

Fund

ing

Fund

ing

September 2006

Leadership Focus

Leadership Commitment and Communication Be present and vocal, build workforce trust Reinforce NSPS value - ease transition - facilitate buy-in

Strategic Alignment of Performance to Mission Alignment starts with you

Goals and objectives aligned with mission Results demonstrated and measurable Realistic expectations for self and others Respectful relationships with responsibility understood and

accepted Resource Management and Funding

Financial management not same as pay pool management Develop compensation strategies/establish decision

making authority Training

Early and often, and again

Commitment and involvement – your keys to success

September 2006

Summary

A modern, flexible, and agile human resources system Responsive to the national security environment Preserves employee protections and benefits

Stimulates an environment where employees are encouraged to excel, challenged with meaningful work, and recognized for contributions Transitions to a culture where feedback and coaching is essential Encourages employees to take ownership of their performance and successes

“NSPS is a win-win-win system… a win for our employees, a win for our military and a win for our Nation.”

Honorable Gordon R. England NSPS Senior Executive

September 2006

NSPS Website

QUESTIONS?www.cpms.osd.mil/nsps

September 2006

Spiral 1.1 vs 1.2

Spiral 1.1

11,124 employees

CONUS only

Single pay schedule (GS)

Single implementation date (30 Apr 06)

NBU (7777 and 8888)

Spiral 1.2

66,558 employees

CONUS and OCONUS

Two pay schedules (GS and APS)

Conversion window (Oct 06 – Jan 07)

NBU (7777 and 8888)

September 2006

Spiral 1.1 Components

Army 2,348

Navy 4,354

Air Force 3,142

Fourth Estate 1,280

Total 11,124 civilians

September 2006

Spiral 1.2 Components

Army 14,373

Navy 8,495

Air Force 36,706

Fourth Estate 6,984

Total 66,558 civilians

September 2006

Spiral 1.2 Workforce Concentrations

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

UK, GE, IT

KO, JA

100+

200+

1,000+

September 2006

Classification Architecture

STANDARD CAREER GROUPPay Schedules

Professional/Analytical Tech/Support Student Employment Supervisor/Manager

73% of DoD white collar workforce

INVESTIGATIVE & PROTECTIVE SERVICES CAREER GROUP

Pay SchedulesInvestigative Fire Protection Police/Guard Supervisor/Manager


SCIENTIFIC & ENGINEERING CAREER GROUP

Pay Schedules Professional Tech/Support Supervisor/Manager


MEDICAL CAREER GROUPPay Schedules

Physician/Dentist Professional Tech/Support Supervisor/Manager


September 2006

$25,195 - $60,049

$38,175 - $85,578

$74,608 - $124,904Professional/AnalyticalPay Schedule

Technician/SupportPay Schedule

Supervisor/ManagerPay Schedule

$31,209 - $60,049

$55,360 - $106,186

$77,793 - $124,904

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

$16,352 - $36,509

$31,209 - $54,649

$46,189 - $71,965

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

$16,352 - $60,049

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

Standard Career Group

22

22 11

22 11

33

33

11

11

StudentPay Schedule

PlusPlusLocal Local MarketMarket

SupplementSupplement







33

September 2006

Scientific & Engineering Career Group

$25,195 - $60,049

$38,175 - $85,578

$74,608 - $124,904

ProfessionalPay Schedule



$31,209 - $60,049

$55,360 - $106,186

$74,608 - $124,904

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

$16,352 - $36,509

$31,209 - $54,649

$46,189 - $71,965

$62,740 - $85,578

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

33 22

11

44 33

22

22 33

11






SupplementSupplement11

September 2006

$85,000 - $175,000

Medical Career Group

Physician/DentistPay Schedule

ProfessionalPay Schedule

$25,195 - $60,049

$38,175 - $101,130

$74,608 - $124,904


$16,352 - $36,509

$31,209 - $54,649

$46,189 - $71,965

$15,000 35,000 55,000 75,000 95,000 115,000 135,000


$25,000 60,000 95,000 130,000 165,000 200,000 225,000

$110,000 - $225,000

$31,209 - $60,049

$55,360 - $106,186

$77,793 - $124,904

$100,000 - $200,000

$25,000 60,000 95,000 130,000 $165,000 200,000 235,000

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

$25,000 60,000 95,000 130,000 165,000 200,000 225,000

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

33

11 22

33 22

11

11 22

44

33

33 22 PlusPlus

Local Local MarketMarket








September 2006

$25,195 - $60,049

$38,175 - $85,578

$74,608 - $124,904

InvestigativeInvestigativePay Schedule

Fire ProtectionFire ProtectionPay Schedule

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

$16,352 - $36,509

$46,189 - $71,965

$62,740 - $101,130

$31,209 - $54,649

11 22

33 44

33

11 22





Investigative & Protective Services Career Group

September 2006

$16,352 - $36,509

Investigative & Protective Services Career Group (cont.)

$31,209 - $54,649

Police/Security GuardPay Schedule


$31,209 - $60,049

$55,360 - $106,186

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

$15,000 35,000 55,000 75,000 95,000 115,000 135,000

$77,793 - $124,904 33

11 22

22 11





September 2006

Compensation

Performance-Based Pay Annual pay raises or bonuses based on performance High-performing employees can get higher pay raises Employees must perform at “Valued Performance” (Level 3) or higher to get any

increase

Rate Range Increases Nation-wide salary adjustments, may vary by pay band Employees must perform at “Fair” (Level 2) or higher to get any increase

Local Market Supplement Increases Similar but not identical to locality pay - addition to base pay Based on geographic or occupation market conditions In given area, can differ from one occupation to another Employees must perform at “Fair” (Level 2) or higher to get any increase

Other Features Rate ranges and local market supplements are reviewed annually 6% minimum salary increase for promotions Eligibility for salary increase for reassignment/reduction in band

Pay bands replace General Schedule

September 2006

What Constitutes Compensation

+

General Schedule

+Bonuses-----------------------

Cash Awards

Worldwide Base Rate

=

Adjusted Salary

CONUS

Locality Pay

All GS employees in covered locality get same %

Special

Rate Supplement

Based on occupation/geographic locality

OR

=+

NSPS

Worldwide Base Rate

Performance

Based Bonuses----------------------------------

-

Cash Awards

+

PerformanceBased PayAdjustment

Local Market Supplement

Variable by career group, pay schedule, occupation,

&/or pay band Adjusted Salary

+

StepIncreases

+

September 2006

Civilian Personnel Funding Allocations

Title 5

• Within-Grade Increases• Quality-Step Increases• Promotions Between Grades• Chapter 45 Incentive Awards

NSPS

• Performance-Based Payouts (Pay Pool)- Salary Increases- Bonuses

• Promotions Between Bands• Reassignments• Accelerated Compensation for Developmental Positions (ACDP)• Extraordinary Pay Increases (EPI)• Organizational Achievement Recognition (OAR)• Chapter 45 Awards

September 2006

• WGIs **

• QSIs **

• Promotions

• Annual Bonuses

• Portion of GPI ***

SECDEF Decisions(Outside Pay Pool)

• Rate Range Adjustments *

• Local Market Supplement (LMS) *

Chapter 45Incentive Awards

(Outside NSPS)

• Special Act

• On-the-Spot

• Time Off

* Funded by annual January pay increase** Does not exist under NSPS*** Portion remaining after funding Rate Range Adjustments and LMSNOTE: - Organizations can add additional dollars for either salary increases, bonuses or both

- Extraordinary Pay Increases (EPIs) and Organizational/Team Achievement Recognitions (OARs) are funded from other sources (NOT from pay pool)

Performance-Based Pay(Inside Pay Pool)

[may be Continuing and/or Bonus]

Moneyhistori-cally spent

Pay Overview

1 2 3Element

September 2006

Base Pay Increase Funding Floor

Statutory requirement to not disadvantage employees

Certified annually by Components to SecDefJanuary 2007 => Not less than the amount historically spent*

Full GPI used for rate range increases and LMS

January 2008 => 2.26% across DoD GPI can split between rate range increases,

LMS and pay pool funding

January 2009 => By formula to be established by SecDef GPI can split between rate range increases,

LMS and pay pool funding* Funds for base pay increase floor = Pay pool element 1

+ Reassignment/salary increases + Salary increases from any ACDP, OAR and EPI

* Funds for base pay increase floor = Pay pool element 1 + Reassignment/salary increases + Salary increases from any ACDP, OAR and EPI

September 2006

Pay Pool Funding Sources

Pay Pool Fund

$

Element 1Fixed percentageDoD-wide / Component Minimum (%)*

Element 2Remaining portion of General Pay Increaseset by DoD (%)

Element 3Annual bonusesComponent discretion (%)

(Total Element %) X (Total Base Salaries)

*Derived from DoD-wide multi-year historical data and is imposed to protect civilian pay accounts and to meet the statutory requirement to NOT disadvantage employees.

September 2006

Lessons Learned

Performance Management Refine strategic plan Develop and cascade performance goals and objectives Close performance appraisals 30 days before conversion Protect pay pool funds

Communication Communicate often and clearly Use multi-media and employee engagement groups Allow employees to vent

Training Take full advantage of training opportunities Use instructors with federal HR experience Partner with in-house trainers

Senior leadership is critical

September 2006

Lessons Learned

Program Management Allow sufficient time to plan and implement Use the readiness tool Involve stakeholders early

Line Managers, Financial Managers, Public Affairs Officers, General Counsel, Human Resources experts, et al

Avoid reorganizations, RIFs, or mass changes prior to conversion

Records Management Start quality control and data correction early

September 2006

Alignment Matters

The Core Align work with mission and/or organizational goals Communicate and understand how employee contributions tie

to mission and organizational goals Acknowledge and reward performance Distinguish levels of performance so that those who are

contributing are rewarded appropriately

The Keys Relationships are clear and transparent Responsibility is clear and accepted Results are demonstrated and measurable

The Experience – over 25 years in DoD Communication and training are critical Evaluation assures accountability Transformational change must happen at every level

September 2006

Training and Communication

Training Leadership involvement sets the tone Establish expectations, make NSPS “real” Tailor to meet organizational needs Do not shortchange employees by thinking they will

“get it” – organizational transformation takes time Training not a panacea – needs to be supported by

other activities

Communication Make communication a priority – be inclusive Open and frank discussions are critical Let people talk about how the change affects them Calibrate expectations

September 2006

Impact of DHS Court Decision

Court of Appeals ruled in favor of unions on almost all significant issues: DHS regulations do not provide core framework for collective

bargaining found in chapter 71 of title 5 DHS regulations cannot change role of the FLRA

Court of Appeals ruled that appeals mitigation standard is not yet ripe for appeal

While NSPS regulations are similar to DHS, there are statutory differences that may affect result of our appeal before the same court

DHS and DoD cases do not involve the human resources elements

DHS will not seek rehearings before the DC Circuit Court but reserves the decision whether to appeal to US Supreme Court

September 2006

Pay Pool Manager Training

2-1/2 day facilitated workshop Includes time for component specific planning session

Target audience Pay pool managers and sub pay pool managers Trainers and facilitators

Topics Dynamics, processes and procedures for effective

management

Dates Sites Number July 11 – 13 Southbridge, MA 90 July 25 – 27 Rockville, MD 225 August 8 – 10 Palm Springs, CA 200 August 15 – 17 Southbridge, MA 150

September 2006

Pay Pool Training Support Tools

Brochure – Pay Pool Management at a Glance Available through component training offices On the NSPS web site

Manager’s Notebook In development

Participant and Instructor Guides

Pay pool simulation data

Pay Pool Automated Training Tool being developed

September 11, 2006 Department of Defense Mrs. Mary Lacey Program Executive Officer APEX Orientation...

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