New Pay Scheme, Tied to Performance, Begins at Defense Department

By Stephen Barr
Monday, May 1, 2006

About 11,000 Defense Department civil service employees go to work today under a new salary system -- the pioneers in an ambitious effort to more closely link pay raises to occupations, locations and job performance.

Gordon R. England , the deputy defense secretary, signed a directive to implement the National Security Personnel System on Friday afternoon at the Pentagon.

The directive, which took effect yesterday, sets up new rules and practices for pay, employee evaluations, job classification, job assignments and layoffs.

The NSPS has been more than two years in the making and may prove to be the most significant change in federal workplace rules since the 1978 Civil Service Reform Act. Administration officials hope the NSPS will make it easier to reward the department's best workers and to weed out poor performers.

The changes at Defense, and a similar effort at the Department of Homeland Security, grew out of dissatisfaction with personnel red tape and the feeling, after the Sept. 11, 2001, terrorist attacks, that national security agencies should be able to quickly hire experts and deploy employees.

"This is a critical time for America," England said before signing the directive. "The current security context is much more varied and more uncertain than at any time in the past.

"Today, the Department of Defense needs the right people in the right places and working in the right way to meet these challenges. As our military forces are reoriented to better address the changing landscape, the civilian workforce, too, needs to become more agile, adaptable and fully integrated in the efforts of our military forces."

The 11,000 civil service employees selected for the first phase of the NSPS work at 12 Defense agencies, including the Naval Sea Systems Command, the Air Force Audit Agency, the Defense Threat Reduction Agency, the Joint Warfare Analysis Center, the Tricare Management Activity, and headquarters and civil service personnel offices.

Eighty to 85 percent of the employees will receive a one-time raise, which will average $962, when they convert from the 15-grade General Schedule to new career groupings.

The raises will cover "within-grade" increases that would have been due to soon eligible employees.

The audience at Friday's signing ceremony included several officials who helped design the NSPS, including David S.C. Chu , a Defense undersecretary; Michael L. Dominguez , an assistant secretary of the Air Force; Mary E. Lacey , the program executive officer for the NSPS; and Brad Bunn , the deputy NSPS program officer.

Defense officials are eager to move employees away from the General Schedule, which they portray as an industrial-age relic focused on rewarding longevity rather than excellence, and into the NSPS, which promises to more closely link pay raises to what employees do and how well they perform and varies pay by occupation and local labor market.

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