For Many Defense Workers, a Day With Some Merit

By Stephen Barr
Friday, January 25, 2008

It was a pay day that attracted more interest than usual.

The new performance-based pay system at the Defense Department provided thousands of civilian employees with their first raises yesterday, and the majority did as well or better than federal employees under the government's traditional pay system, officials said.

The average pay raise under the National Security Personnel System was 5.9 percent plus a bonus that equaled 1.7 percent of base pay, officials said. The combination provided an average 7.6 percent boost in compensation.

Most federal employees are covered by the decades-old General Schedule, which provided a 2.5 percent across-the-board raise plus a geographic-based adjustment. The average GS raise was 3.5 percent this year, but Washington-Baltimore employees received a 4.49 percent raise.

About 110,000 Defense civilians are getting their raises under the new system, known as NSPS. Many of them received the raise yesterday, and others will see it in their paychecks next week, officials said.

The NSPS employees work at military bases and in the department's agencies around the world. The system includes thousands of employees at the Washington Navy Yard, Fort Belvoir, the U.S. Army Military District of Washington and the Pentagon.

At the urging of the Bush administration, the Defense Department began work on the NSPS about four years ago and has implemented it in phases. The administration has contended that the General Schedule rewarded longevity rather than performance, and that too much of the federal payroll goes to across-the-board, mostly automatic pay raises, instead of being tilted toward the best workers.

But many Defense employees are wary of the NSPS, in part because a portion of their pay raises is determined through job evaluations by their supervisors and managers. Some of the employees are skeptical that the NSPS can be administered fairly, and others are concerned that their raises will fall behind the General Schedule increases.

The 2008 raise should provide employees with a better sense of how they may fare under the NSPS. Last year, only 11,000 employees had been covered by NSPS long enough to receive performance-linked raises.

The system uses a five-level rating scale that provides the best workers with the highest raises. Mary Lacey, the NSPS program executive, said 5 percent of the 110,000 employees received 10 percent raises for superior job performance. At the other end of the scale, 0.2 percent got no raise because their work was deemed unacceptable.

The majority of the NSPS employees -- 57 percent -- fell in the middle, Level 3, called "valued performer." At that level, employees receive three adjustments to their pay: a raise linked to their pay band, or occupational grouping; a locality increase; and a performance increase.

But some of the valued performers did not keep with up the General Schedule increase. Lacey said 5,425 of the Level 3 employees, along with those rated at two lower levels, unacceptable or "fair," did not receive raises as large as those of their GS counterparts.

The Pentagon did not have data yesterday showing the average NSPS salary for the Washington area or the dollar value of a typical Level 3 raises.

Currently, the NSPS only applies to non-union employees, in part because of a lawsuit filed by unions challenging workplace rules and because of congressional concern about a Pentagon plan to curb collective bargaining rights. A defense bill awaiting President Bush's signature would ensure Defense Department unions can continue to bargain on behalf of workers under regular civil service law.

Lacey said she was pleased by yesterday's pay results. "It is hard work for everyone. It is important work," she said. "Just the fact that people are talking about it to me is a good sign. It means they are paying attention and taking it seriously."

A Flight From Stocks

This week's roiling stock market led to stepped up activity in the Thrift Savings Plan, the 401(k)-type retirement investment plan for government employees.

From noon last Friday through noon Tuesday, employees filed 40,029 orders to transfer money, moving $2.59 billion from one fund to another, the TSP said. On Wednesday, plan participants filed 21,273 orders and transferred $1.29 billion.

A majority of the transfers were out of stocks and into bonds and government securities, typically seen as less risky investments.

The TSP was closed Monday for the federal holiday. In the three weeks before the holiday, requests to transfer funds ranged from 7,000 to 17,000 a day. The plan has about 3.9 million participants.

Talk Shows

Michelle Corum and Dan Shoemaker of U.S. Investigations Services will be the guests on "FedTalk" at 11 a.m. today on http://federalnewsradio.com and WFED radio (1050 AM).

David Norquist, chief financial officer at the Department of Homeland Security, will be the guest on the IBM "Business of Government Hour" at 9 a.m. tomorrow on WJFK radio (106.7 FM).

Stephen Barr's e-mail address is barrs@washpost.com.