(Charles Dharapak/AP)

The Defense Department on Friday will begin another overhaul of how it evaluates its civilian federal employees, this time with the support of employee unions whose opposition doomed the previous program.

The first stage of the new Defense Performance Management and Appraisal Program involves about 15,000 employees at a dozen relatively small components and headquarters functions, including several in the national capital area. Over the next two years, the large majority of the 750,000 employees in the Defense Department civilian workforce will have their performance rated under that system.

The intent is to “create a fair, credible, and transparent performance appraisal process throughout the Department,” said a Pentagon memo announcing the program’s and the entities in the first phase. “This program will link individual performance to Department of Defense values and organizational mission; will ensure ongoing recognition and communication between employees and supervisors throughout the appraisal cycle; and will be critical to effective mission accomplishment and increased employee engagement.”

Federal employee performance ratings are used in decisions on promotions, financial awards, advancement up the steps of the pay ladder, and discipline, including reassignment, demotion and firing.

Because the Defense Department is the largest federal employer, its policies are watched for possible application across the federal workforce. Federal agency awards and disciplinary policies have come under heightened scrutiny from Congress recently.

The new ratings program, part of a broader personnel initiative called New Beginnings, differs greatly from the National Security Personnel System, a pay-for-performance system installed by the George W. Bush administration that at one time applied to more than 200,000 employees. Unions representing Defense Department employees opposed that program from the outset and successfully pushed for its repeal in late 2009, when both the White House and Congress were under Democratic control.

The repeal law ordered that Defense Department management collaborate with employees and their unions in crafting a new ratings system, among other requirements. That resulted in a series of town-hall meetings and labor-management working groups, with much of the design work concentrated in the past two years. The department outlined the program last spring and issued detailed guidance in early February.

“The process has been fantastic and should be used again, this type of collaboration,” said Pete Randazzo, president of the National Federation of Federal Employees local at the Naval Postgraduate School in Monterey, Calif., and a union co-lead on the design team. “I think there was an unprecedented attention to detail into what is necessary to change the culture in DoD.”

“New Beginnings is about a cultural change,” said Don Hale, president of the American Federation of Government Employees local at the U.S. Military Academy at West Point, N.Y., and chairman of an AFGE committee that oversees Defense Department personnel policies for the union. “It’s about employee engagement and employee involvement in decisions that are made today and also in the future.”

The system features three ratings levels, corresponding to Levels 1, 3 and 5 of the five-level rating system commonly used in the government — in ascending order, unacceptable, fully successful and outstanding. Employees will be involved in writing their performance expectations, which must meet certain standards, and can write self-assessments at the end of a cycle that the supervisor would have to consider in setting the final rating.

Supervisors will have to monitor performance continuously and formally meet with employees at least three times in the 12-month rating cycle. Supervisors also must watch for training or development assignments that will benefit employees and must warn them if their performance is falling below the fully successful level and help them improve.

“We’re not focusing on the rating — we’re focusing on the communication between the first-level supervisor and the employee,” Randazzo said. “What this could and should lead to is a culture change within DoD where we have an engaged workforce that is coming to work each day and feeling as though they’re part of the organization and wanting to contribute. That’s the design behind this, not that rating on the 365th day.”

Said Hale: “I’m excited about it because I think that [federal employees] finally have an opportunity to show our value in a way that people will understand and appreciate. Our goal is to work hand in hand with management to provide the best support for our warfighters, while protecting the rights of workers. There’s no reason that can’t be done amicably.”

The program is to roll out in phases so that nearly all Defense Department employees will be under it by October 2018. Most of those who will be excluded are already under separate rating and reward systems, such as those at senior levels and those in parts of the department operating under special personnel rules.