National Security Personnel System Standard Brief September 2004

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

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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


“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


Design Process

Employee Engagement WGPerformance Management &

Pay Progression WGHiring, Assignment & Pay Progression WGCompensation WG





Regs

LaborLabor HR-PFPHR-PFP AppealsAppeals OIPT

Senior Executive

SECDEFSECDEFOPMOPM

Component PM’s

Component PM’s

Component PM’s

Component PM’s



“Component-managed” input to Working GroupsPre-screen


Products


Flow

Flow

Flow

PEO Working Groups



Flow

SAG

Focus Groups

Design Process





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



“Component-managed” input to Working Groups

Pre-screen


Products


Flow

Flow

Flow


Employee Engagement WGPerformance Management

& Pay Progression WGHiring, Assignment & Pay Progression WGCompensation WG

PEO Working Groups



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

[email protected]

• 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

Documents

National Security Personnel System Standard Brief September 2004