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National Security Personnel System
Standard Brief
September 2004
2PEO-NSPS
Significance
• Most significant change to the civil service since the CSRA of 1978
• Potential for impacting entire civil service
• Flexibilities never before afforded to the civil service system
3PEO-NSPS
Why NSPS?
• Current system inadequate to manage DoD civilian personnel in today’s environment
• Hiring too slow; recruiting adversely affected
• Outstanding performers paid the same as poor performers
• Limited flexibility to reassign
• Limited accountability
• NSPS needs to bring about essential change while preserving the core and enduring values of the civil service
4PEO-NSPS
Why Now? Change Drivers
• Demands historically placed on DoD and its civilians have elevated since 9/11 – with no ceiling in sight
• Quick and effective civilian personnel actions will free military personnel to support the war fighting mission– For example
• Hiring civilian mechanics allows military maintainers to keep equipment operational in a theatre of operation
• Adequately compensating/rewarding an engineer improves retention, retains critical skills and supports the war fighter
• Demonstration projects have been testing personnel flexibilities for years with much success
5PEO-NSPS
Background
• FY 04 NDAA signed in November 2003• Grants SecDef & OPM Director authority to establish DoD
HR System, Labor Relations, and Appeals & Grievance Process
• We were on a path to issue regulations and implement October 2004
• April 2004 Strategic Reset: Timelines adjusted to reflect more cautious, deliberate approach involving stakeholders, adapted Acquisition model
• NSPS Program Executive Office established – April 2004– Secretary Gordon England, Senior Executive– Mrs. Mary Lacey – NSPS Program Executive Officer– Mr. Brad Bunn – NSPS Deputy PEO
6PEO-NSPS
Guiding Principles
7 Principles1. Put mission first – support National Security goals
and strategic objectives2. Respect the individual; protect rights guaranteed by
law3. Value talent, performance, leadership and
commitment to public service4. Be flexible, understandable, credible, responsive,
executable5. Ensure accountability at all levels6. Balance HR interoperability with unique mission
requirements7. Be competitive and cost effective
7PEO-NSPS
Operational Requirements:Key Performance Parameters
• High Performing: Employees/supervisors are compensated/ retained based on performance/contribution to mission
• Agile & Responsive: Workforce can be easily sized, shaped, and deployed to meet changing mission requirements
• Credible and Trusted: System assures openness, clarity, accountability and merit principles
• Fiscally Sound: Aggregate increases in civilian payroll, at the appropriations level, will conform to OMB fiscal guidance; managers will have flexibility to manage to budget
• Supporting Infrastructure: Information Technology support and training and change management plans are available and funded
• Schedule: NSPS will be operational and stable in sufficient time to meet the LR system sunset date (Nov 09)
Big Picture
No Change from Title 5: - Merit system principles - Rules against prohibited
personnel practices - Benefits - Allowances and travel / subsistence expenses - Training - Leave and work schedules - Other personnel systems in
law - Current Lab Demos until FY
08 - Anti-discrimination laws - Veterans Preference basics
NSPS HR Considerations:
- Pay Banding (GS / WG) - Staffing
(internal / external) - Pay for Performance - Reduction in Force - Labor relations - Employee Appeals
Provisions Implemented:- VERA / VSIP authority- Reemployed Annuitants- Experts
Planned:- SES performance system
Continuing Responsibility for Component Policy and Execution:- Human resource management - Leader Development - Support tools- Work life programs - Mobilization and deployment - Workforce diversity - Reorganization planning - Career management - Workforce planning/Strategic recruiting
9PEO-NSPS
The Way Ahead
Summer/Fall 04
Jul 05
Winter 04Winter/Spring 05
Notional ScheduleNotional Schedule
Key: Implementation will be event, not timeline drivenKey: Implementation will be event, not timeline driven
Wor
king
Gro
ups
1st S
pira
l
Fede
ral R
egist
er
Chang
e M
gmt &
Tech
nica
l Tra
inin
g
Focus
Gro
ups
Stake
hold
er O
utre
ach
Mee
t & C
onfe
r
10PEO-NSPS
Implementation Challenges
• Changing culture from Entitlement to Performance– Pay linked to performance– Performance evaluations need to be specific and defensible
• Communicating and documenting performance goals• Providing professional feedback to employees
on performance
• Budgeting/Managing Costs
– WGI Buyout– Controlling pay increases within the bands– Ensuring performance is tied to business results
• Technology
– Systems for documenting and tracking performance
goals/pay models
11PEO-NSPS
CommunicationA Force Multiplier
A primary strategy for sharing the NSPS vision– Facilitates employee awareness & understanding– Demonstrates leadership’s support & involvement– Demonstrates openness and transparency of NSPS design
and process– Builds workforce trust & commitment– Leverages related implementation strategies
• Training• Media Relations & Legislative Liaison• Changes Readiness• Cultural Transformation
NSPS Website: www.cpms.osd.mil/nsps
12PEO-NSPS
How You Can Help
• Leverage NSPS transformation thru your leadership and involvement
• Get to know your Component/Activity NSPS Program Staff
• Stay ahead of the readiness power curve
• Stay informed
• Communicate the NSPS Vision
• Build trust – generate enthusiasm – inspire confidence
Make a Difference!
13PEO-NSPS
Summary
• Supports National Security goals and objectives
• Numerous opportunities for interested parties to be involved
• Provides historic opportunity - presents significant challenges
• Open and collaborative NSPS design process is underway
Objective: A DoD Human Resources environment promoting
employee growth, initiative, performance and accountability
that places the right person in the right job with the right
skills at the right time at the right cost
14PEO-NSPS
Back-up Slides
15PEO-NSPS
Major Elements
Labor Relations System 9902(m)
Compensation
Performance Mgmt
Hiring/Shaping
Employee Engagement
Applies throughout
DoD
Units under NSPS HR
Mgt System
Core Performance Mgmt, with
Pay for Performance
Labor Mgmt Relations
System 9902(m)
National Level Bargaining
Appellate Procedures
9902(h)
Fair Treatment and Due Process
HR Mgmt System 9902(a)
Pay, Staffing, Performance, &
Other Waiverables
16PEO-NSPS
Regulation Approach
Joint Enabling Regulations
(Federal Register Notice)
SECDEF/DirOPM
Joint Enabling Regulations
(Federal Register Notice)
SECDEF/DirOPM
System Design Optionsto Draft Regulations
System Design Optionsto Draft Regulations
DoD Implementing Regulations
DoD Implementing Regulations
OPMOPM
NSPS Senior ExecutiveNSPS Senior Executive
DoDDoD
OIPTOIPT
SAGSAGPEOPEO
17PEO-NSPS
Current Status
• PEO and Component Program Manager structure in place
• OIPT (PDUSD/PR and OPM co-chair) and Senior Advisory Group (SAG) established
• NSPS system and training design underway
• Involvement of key interest groups on-going
• Event driven milestones
• Workforce orientation & communication efforts on-going
19PEO-NSPS
Overarching Integrated Product Team – OIPT
• MEMBERSHIP:– Principal Deputy Undersecretary of Defense/Personnel
and Readiness and OPM Senior Representative – Co-Chairs
– Assistant Secretaries for Manpower and Reserve Affairs of the Army, Navy, and Air Force
– Secretary of Defense Representative– NSPS Senior Executive Representative
• Serves as the integrated management team – supports and advises both the Senior Executive and the PEO
• Provides overall policy and strategic advice
Focus Groups
Labor Relations WGAppeals WG
Design Process
Employee Engagement WGPerformance Management &
Pay Progression WGHiring, Assignment & Pay Progression WGCompensation WG
System Proposals PEOPEO
Joint Enabling Regs (FRN)
Joint Enabling Regs (FRN) DoD Implementing
RegsDoD Implementing
Regs
LaborLabor HR-PFPHR-PFP AppealsAppealsOIPT
Senior Executive
SECDEFSECDEFOPMOPM
Component PM’s
Component PM’s
Component PM’s
Component PM’s
Field ActivitiesField Activities
Field ActivitiesField Activities
“Component-managed” input to Working GroupsPre-screen
Focus Groups& Town Hall Meetings
Products
Meetings with Union Leaders
Flow
Flow
Flow
PEO Working Groups
PEO, OPM & CPMS Staff
Centrally Designed; Component Implemented
Flow
SAG
OIPT
20PEO-NSPS
Senior Advisory Group (SAG)
• Areas of concentration: system design considerations; policy and program issues; deployment phasing and support work like assessing implementing units; communications strategies near time of deployment
• Individual members also support their Component OIPT member and may raise issues to that official
• Line and HR Executives/Flag Officers from all Components, OPM
• Advises PEO on general conceptual, strategic, and implementation issues
• Members bring Component perspective, in DoD-wide interest
SAG
Focus Groups
Labor Relations WGAppeals WG
Design Process
Employee Engagement WGPerformance Management &
Pay Progression WGHiring, Assignment & Pay Progression WGCompensation WG
System Proposals PEOPEO
Joint Enabling Regs (FRN)
Joint Enabling Regs (FRN) DoD Implementing
RegsDoD Implementing
Regs
LaborLabor HR-PFPHR-PFP AppealsAppeals OIPT
Senior Executive
SECDEFSECDEFOPMOPM
Component PM’s
Component PM’s
Component PM’s
Component PM’s
Field ActivitiesField Activities
Field ActivitiesField Activities
“Component-managed” input to Working GroupsPre-screen
Focus Groups& Town Hall Meetings
Products
Meetings with Union Leaders
Flow
Flow
Flow
PEO Working Groups
PEO, OPM & CPMS Staff
Centrally Designed; Component Implemented
Flow
SAG
Focus Groups
Design Process
System Proposals PEOPEO
Joint Enabling Regs (FRN)
Joint Enabling Regs (FRN) DoD Implementing
RegsDoD Implementing
RegsIn
tegration
Team
Integ
ration Team
LaborLabor HR-PFPHR-PFP AppealsAppeals OIPTSAG
SECDEF
Senior Executive
OPMOPM
Component PM’s
Component PM’s
Component PM’s
Component PM’s
Field ActivitiesField Activities
Field ActivitiesField Activities
“Component-managed” input to Working Groups
Pre-screen
Focus Groups& Town Hall Meetings
Products
Meetings with Union Leaders
Flow
Flow
Flow
Labor Relations WGAppeals WG
Employee Engagement WGPerformance Management
& Pay Progression WGHiring, Assignment & Pay Progression WGCompensation WG
PEO Working Groups
PEO, OPM & CPMS Staff
Centrally Designed; Component Implemented
Flow
FlowRptngChain
22PEO-NSPS
Union Collaboration
• Meetings with union coalition members/others unions on-going
– First Meeting, 7 June• Rules of Engagement/Meeting procedures
– Second Meeting, 29 June• NSPS development process/schedule• Overall principles and concerns• Town Halls/Focus Groups
– Third Meeting, 25-26 August• Potential features of Labor and Appeals System
– Fourth Meeting, 9-10 September• HR Proposals
23PEO-NSPS
Focus Groups
• Topic Areas
– Performance Management/Pay-for-Performance– Classification and Pay Banding– Hiring and Assignment– Workforce Shaping and Downsizing– Employee Engagement and Appeals– Labor-Management Relations (N/A Employee Groups)
• Results– Varied Feedback/No conclusive trends
Thanks to all for a Job Well Done!
24PEO-NSPS
Focus Groups
• Purpose: To elicit perceptions/concerns about current HR system, as well as design ideas for NSPS
• Demographics
– *77% of groups had bargaining unit participation
– Over 10K comments received
– DoD Worldwide participation
Employee Supervisor Practitioner Total Groups/ Employees
DoD 52* 33 21 106/1000+
25PEO-NSPS
NSPS DesignWorking Groups
• Purpose: Identify and develop options for NSPS design• Working Groups began meeting 27 July• Group members include
– Military Components/Defense Agencies• Military and civilian supervisors/managers• HR/EEO Practitioners• Counsel/FM
– OPM
• Covered Program Areas– Compensation (Classification and Pay)– Performance Management– Workforce Hiring, Assignment, Pay Setting, and Shaping– Employee Engagement & Appeals– Labor Relations
• Status: Predecisional NSPS LR, Appeals & HR Design options have been posted on the web/presented to Congress and labor for feedback/input
26PEO-NSPS
NSPS Design Options
• Predecisional NSPS HR Design options have been posted on the web/presented to Congress and labor for feedback/input
• Design Features include processes to:
– Classify Jobs to Meet Dynamic Mission
– Offer Competitive Compensation
– Attract & Hire High Quality Applicants
– Develop and Retain High Performing Employees
– Reshape and Transition the Workforce
– Foster Effective Supervisor/Employee Engagement
27PEO-NSPS
Classification
Concern Option
Rigid/inflexible grade structure Pay Banding with Broad Salary Ranges
Limited latitude in adjusting work assignments
Simplified criteria for assigning positions to bands
Detailed PDs Minimize/simplify PD requirements; retain information needed for class/qual decisions
Complex classification decisions to determine grade
Define work by broad career paths;
Accommodate trainees (accomplishments vice timeframes);
Provide a dual-track for senior experts;
Establish Pay Ranges that reflect labor market; grant flexibility in setting pay
28PEO-NSPS
Compensation
Concern Option
Inability to offer competitive compensation to attract high quality candidates
Market-sensitive pay strategy;
Allow managers to offer competitive salaries
Cumbersome/restrictive qualifications and pay setting requirements
Continue to use 3Rs
29PEO-NSPS
Attract and Hire
Concerns Options
Cumbersome Process/complex rules are confusing to applicants
Establish new noncompetitive appointing authorities to simplify process and expand opportunities
Numerous/Confusing Appointing Authorities
Streamline and consolidate external appointing authorities
Unable to hire quickly Establish DoD direct hire authority to meet critical needs
30PEO-NSPS
Pay for Performance
Concerns Options
Emphasis on longevity vice performance; Employees are not incentivized to take risks/strive for excellence; Inability to grant significant pay increases to top performers
Progression through a pay band based on performance and/or contribution; elimination of automatic pay increases based on passage of time
Performance is not recognized in pay, awards, retention decisions
Establish performance as primary factor for decisions for pay adjustments, awards and RIF retention; provide procedural accommodations for specially situated employees
31PEO-NSPS
Reshape/Transition Workforce
Concerns Options
Unable to motivate employees to accept new and difficult work assignments
Allow base pay increases for reassignments to take more challenging assignment/relocation
Difficult to obtain optimal balance among military, civilian and contractor force
Streamline RIF procedures; leverage workforce shaping authorities to facilitate organizational transformation
32PEO-NSPS
Supervisor/Employee Engagement
Concerns Options
Lack of/inconsistent employee/supervisory dialogue regarding performance and conduct expectations
Establish and continuously communicate performance and conduct expectations
Acknowledge and reward high performance/good conduct
Inconsistent application of performance improvement/conduct discipline systems; lack of employee involvement
Streamline PIP
Use a progressive approach to correct performance problems
Prepare “just in time” written notices of marginal performance
33PEO-NSPS
Function Current System NSPS Desired
Structure Rigid job grade structure: 15 levels Employee works within job grade
level, or else personnel action req’d
Jobs banded to 3-4 levels Employee works to capability within range
mission needs Fewer personnel actions to process
Acquire Selection forced from ranked list of candidates
Constrained ‘direct hire’ authority 200 appointing authorities
Selection from highest group of Best Qualified/Highly Qualified/Qualified candidates
More flexible ‘direct hire’ authority Simpler appointing authorities
Distribute • Assign work/assign employee within grade level, specialty
Assign range of work/assign employee within broad band level
Sustain Highly structured pay system: normally start at first step of grade guaranteed progress by steps within
grade Performance rating has little impact on
pay or career progression.
Flexible pay system: entry/job change pay can be market sensitive within-band raises based on
contributions/performance
Separate Reduction in force: main factor length of service.
Reduction in force: stronger role for performance.
Comparing the Current & Desired
Designs will be finalized in a collaborative processDesigns will be finalized in a collaborative process
34PEO-NSPS
Key Milestones
• Proposed regulations to be issued in Federal Register – late 2004
• Federal Register process allows for official comment period
• NSPS law prescribes official collaboration with unions following Federal Register publication
• NSPS Spiral One – proposed for July 2005
• NSPS Spiral Two – proposed for Jan 2006
• Full NSPS implementation – July 2007/2008
35PEO-NSPS
Spiral One
• Components soliciting interested organizations for Spiral One with nominations due to PEO by Sep 14
– Should have an adaptive workforce climate and demonstrated acceptance of readiness for change
– Should have established methods to measure effectiveness of mission accomplishment and a strategic or business plan tied to HR practices
• Components will review nominations and make recommendations
• OIPT will decide organizations for Spiral One in October 2004
36PEO-NSPS
Demo Lessons Learned
• Communication is critical– Employees - Managers– Stakeholders - Congress– Media
• Training is essential
• Employee acceptance must be earned
• Supervisors set the tone
• Transition planning reduces risk
• Continuous assessment & evaluation pays off
37PEO-NSPS
Training Objectives
• Provide necessary skills & knowledge to enable employees, managers and HR personnel to successfully implement NSPS
• Fulfill requirements of Public Law 108-136
• Foster support and confidence in NSPS
• Facilitate the transition to a performance based, results oriented culture
38PEO-NSPS
Change Management
• What it is:A multi-layered process, instituted and supported by the leadership, to accomplish organizational transformation
• Leaders are the Linchpin• Critical to maintaining focus and direction
Must provide vision, purpose and direction throughout all phases
Must ease the transition from old to the new Must ensure the workforce is committed & capable Must enable others to act Must sustain commitment
Effective leadership won’t ensure success, but without it, failure is guaranteed
39PEO-NSPS
Leveraging Change Readiness
Stages of Readiness– Stage 1: Unaware – Uninformed and uninvolved– Stage 2: Aware – Why are we doing this? What’s in it for me?– Stage 3: Understand – I understand why, but I’m skeptical– Stage 4: Buy-in – I believe this can work – this could be a
good thing– Stage 5: Commitment – This works! -- This is better than the
old way!
Effective change requires forward progression DoD employees – most at Stage 2 Multi-level communication strategies facilitate “getting to green”
40PEO-NSPS
Civil Service Merit Principles• Recruit qualified individuals from all segments of society; select and advance
employees on the basis of merit after fair and open competition• Treat employees and applicants fairly and equitably without regard to political
affiliation, race, color, religion, national origin, sex, marital status, age, or handicapping condition. Do not violate their privacy or constitutional rights.
• Provide equal pay for substantially equal work; reward excellent performance• Maintain high standards of integrity, conduct and concern for the public
interest• Use the workforce effectively and efficiently• Retain employees on the basis of his/her performance. Separate employees
who cannot/do not improve their performance to meet required standards• Educate and train employees when it will result in better organizational or
individual performance• Protect employees from arbitrary action, improper political influence, and
personal favoritism• Protect employees against reprisal from lawful disclosures of information in
“whistleblower” situations like when the employee reasonably believes there is illegal activity, gross waste of funds, abuse of authority, substantial danger to public health or safety.
41PEO-NSPS
Program Executive Office Contact Information
• Program Executive Officer
Mary E. Lacey
(703) 696-7770 Ext. 166
mary.lacey@cpms.osd.mil
• National Security Personnel System Website:
http://www.cpms.osd.mil/nsps
42PEO-NSPS
Notional Monthly Spiral Implementation Schedule
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O
NSPS Design Collaboration Discussions Incl 30-30-30LR, Appeals, HR Mgmt Systems
LR SystemAppeals Process
HR System
IT Systems DCPDS/DCPS & ComponentNSPS Implementation
DoD implementing regs Component policies and regs
Site DeploymentDefine Prog Content & Strategy (incl FM matters, T&E plan, support net)
Change ManagementTraining (Functional HR) TBD-Components
IOC Date for LR System
IOC 1st Spiral HRS/Appeals Unit T&E Preparation - Mass Transfer 1st Cycle (6 mo) 2nd Cycle (12 mo)Pay-out 1st
Validation T&EDate for 2nd Spiral Second Spiral Roll-Out 1st Cycle - 10 months?
Pay-out
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O
NSPS Design Collaboration Discussions Incl 30-30-30LR, Appeals, HR Mgmt Systems
LR SystemAppeals Process
HR System
IT Systems DCPDS/DCPS & ComponentNSPS Implementation
DoD implementing regs Component policies and regs
Site DeploymentDefine Prog Content & Strategy (incl FM matters, T&E plan, support net)
Change ManagementTraining (Functional HR) TBD-Components
IOC Date for LR System
IOC 1st Spiral HRS/Appeals Unit T&E Preparation - Mass Transfer 1st Cycle (6 mo) 2nd Cycle (12 mo)Pay-out 1st
Validation T&EDate for 2nd Spiral Second Spiral Roll-Out 1st Cycle - 10 months?
Pay-out
Draft Regs to Federal Register
43PEO-NSPS
NSPS Financial Matters
• NDAA: NSPS limitations relating to pay– Compensation rates adjusted at same rate, proportion as for military– FY04-08: amount allocated for compensation of employees in units
under NSPS not less than if not converted to NSPS– FY09+: allocation formula must ensure that in aggregate, employees
are not disadvantaged in terms of overall amount of pay available as result of conversion to NSPS
• Broad issues:– Civilian pay/allocation formula– Budgeting for above: appropriation variations– NSPS cost-discipline – Effect on FY05 budget year and FY06 year of execution
• Affordability of 1st, 2nd Spiral size– Cost-benefit analysis in terms of organizational performance– Per capita cost metric for human resource management
44PEO-NSPS
NSPS Financial Matters, 2
• Paying for “Do No Harm”• Human Resource Mgt system design implications:
– Effects of/Controls for flexibility in pay setting (market-sensitive)– Performance raises: base pay AND bonus
• Amounts (percentages) and relative proportions• Fencing• Flexibility/Effects in setting proportions, pay pool controls • “Speed bump” policies for pay compression
– Compounding effects on benefits costs– Cost/timing of buy-in conversion incentive (within grade ‘share’)
• Investment costs to develop, field, train for, assess new system– HR and DFAS/Pay– Collateral systems that use HR data/categories
• Preventative costs to educate, assure fairness, address discrimination complaints involving pay for performance
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