Rebuild Pay-for-Performance System, Panel Says

In a report released Tuesday, the Defense Business Board recommended a “reconstruction” of the National Security Personnel System. The recommendation by the board’s “task group” was sent to Office of Personnel Management Director John Berry and Deputy Defense Secretary William J. Lynn. The report is the result of a Defense Department and OPM decision to review NSPS, which has been controversial since it was created during George W. Bush’s administration.

The document elaborates on recommendations made by the task group last month. “A ‘fix’ could not address the depth of the systemic problems discovered,” the report says. But then it adds: “The Task Group does not recommend an abolishment of the NSPS because the performance management system that has been created is achieving alignment of employee goals with organizational goals.”

Yet, the level of reconstruction the board suggests for NSPS could, in fact, result in a whole new system.

“It might,” Robert Tobias, a member of the three-person task group, conceded in an interview. “It should be reconstructed from scratch.”

Tobias, an American University professor and a former federal union leader, also pointed to a footnote in the 20-page report that says the group thinks the name of the system should be changed.

So, if the personnel system is reconstructed from scratch and its name is changed, what is left is a whole new system.

But because the panel talks in terms of reconstruction, instead of destruction, it has drawn the anger of organized labor, even though its members are not covered by NSPS.

“You got the diagnosis right, but you are way off on the cure,” John Gage, president of the American Federation of Government Employees, said in a letter to the board.

“The Task Group miscalculated the intensity of hatred toward the system and its name,” Gage added. In the letter, released at the union’s convention here, Gage asked why the Defense Department “isn’t holding those responsible for NSPS accountable and terminating them for this colossal failure.”

Gage was even put off by the report’s call for the reconstruction to include “a true engagement of the workforce in designing needed changes and implementation” and for the reestablishment of a Department of Defense “commitment to partnership and collaborating with employees through their unions.”

That was “an unintended insult,” Gage said. “The original law required collaboration from the onset, but DOD leaders and staff were dismissive and arrogant.”

The final report is much more extensive than the seven-page PowerPoint presentation that was the interim report. Where the interim document urged officials to “explore replacement of the current General Schedule classification system” that covers many federal employees, the final paper specifies areas in which the task group believes NSPS is better than the GS system.

“In fact, the GS system falls short in many of the areas in which NSPS has made progress such as aligning individual performance to organizational goals, making meaningful distinctions between performance, and encouraging performance discussions between employees and their supervisors,” the final report says.

The board said running two Defense Department personnel systems for civilians “is problematic on many levels,” and it suggested consideration of a new system for bargaining unit workers. Such a new system, the report said, should include a performance management mechanism, recognition of high-performing individuals, changes in the hiring process and pay for performance.

Those last three words — “pay for performance” — cause steam to erupt from union leaders’ ears. They want no part of NSPS or anything else that includes pay for performance.

“The recommendation to keep NSPS going in light of the program’s failed history is baffling to us,” said William R. Dougan, president of the National Federation of Federal Employees. “NSPS should be discarded once and for all.”