DEFCON NSPS Briefing Las Vegas, Nevada, Jan 05

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DEFCON NSPS Briefing Las Vegas, Nevada, Jan 05

• Green Slides DoD Expectations/Limits
• Red Slides Union Analysis/Concerns

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DOD--NSPS

• January 2005

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TIMEFRAME

• 30 days comment period
• 30 days meet and confer
• 30 days Congressional notice
• July 1 Labor Relations implementation
• LR sunsets 2009
• Spiral 1Up to 300,000 employees
• Spiral 1.1, 1.2 1.3 - every six months
• Sec Def must certify Spiral1 before Spiral 2

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Six Key Parameters

• High Performing Workforce
• Agile Responsive Workforce
• Credible Trusted
• Fiscally Sound
• Supporting Infrastructure
• Schedule

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High Performance Workforce

• Transparentclear and understandable
• Credibletrusted
• Performance and pay linked
• Ongoing feedback
• Simplified veterans preference
• Reward system for indiv. teams

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Agile Workforce

• Hire faster
• Easily down-sized Layoffs
• Flex to compete and contract out
• Easily deployable or moveable
• No unnecessary rules that restrict management
  action

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Credible and Trusted

• Fair transparent appraisal system
• Dialogue between supervisor employee
• Due Process assured
• LR that addresses right to bargain while meeting
  DOD mission
• Performance expectations and salary must be
  equitable and understood

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Fiscally Sound

• Conform to OMB fiscal guidance
• Cost Neutral
• 2004-2008 total comp cannot decrease below what
  it would have been
• System provides for cost discipline
• Manage human resources to budget at unit level

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Supportive Infrastructure

• Easy IT software
• Change communications training
• Technical training (pay pools, etc)
• Processing RIFS thru automated process
• Personnel data accessible
• Mass conversions into NSPS

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Other NSPS Requirements

• Collaboration with OPM and DHS
• May be reduced availability of training funds
  which demos indicated was necessarymust solved
  to meet statutory requirement for training and
  retraining on performance management system

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DHS

• Collective Bargaining
• Implementing regulations not negotiable
• Agency regulations not negotiable
• Contract provisions in conflict will be
  unenforceable

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DHS Collective Bargaining

• Permissive subjects made prohibitive

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DHS Collective Bargaining

• Management Rights
• No bargaining over procedures or arrangements for
  most management rights except for layoffs,
  discipline, promotion
• No bargaining over covered by

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DHS LR

• Labor Board appointed by Secretary
• Handles Negotiability and Impasses as one
• Handles bargaining related ULP's
• FLRA handles other actions

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DHS Adverse Actions

• Can arbitrate or MSPB
• Mitigation limited-wholly unjustified
• Performance actions
• With PIP-substantial evidence
• Without PIP-preponderance of evidence

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DHS Performance Management

• No requirement for written standards
• Evaluate assignments
• Evaluations could be changed by higher levels
  before you see to balance out, i.e. your
  manager deemed too easy with too many high
  ratings
• Can grieve arbitrate ratings using current
  standards

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DHS Pay Systems

• Regulations are very nonspecific
• Compensation Committee with Unions
• To work out more strategic questions
• Review annual survey data
• Secretary makes final decisions
• Northrup Grumman hired to advise
• No longer to use BLS salary datahire private
  company to provide salary data

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DHS Pay System

• Bait and Switch promise employees more money
  based on more market sensitive and if they
  perform
• 1st Criteria-Budget and Cost (OMB)
• Would not guarantee raises to match market. Pay
  Band would only adjust if entry rate of market
  increases.
• Questions over size of companies to be surveyed.

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DHS Pay System

• Pay Bands No grievance over placement
• Payout controlled by budget not performance.
• No guarantees like
• Outstanding---4
• Above Average3
• Average 1
• Pay Poolsmove money to favored groups

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DHS Pay System

• Likely effect for most people
• Lower salary increases
• Which will lead to a lower retirement

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Pay for Performance Issues

• Most supporters say if you cant put more money
  into playsystem will not succeed
• FAA ProblemsDiscrimination Lawsuits
• Top employees dont get base salary increases----
  only cash bonuses
• One employee calculated loss of 300,000 in lost
  retirement if retired for 25 years
• Top mgmt said employees should understand tight
  budgets of the agency (Sound Familiar?)

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No Pay for Performance Issues

• Remember Merit Pay in 1980s
• It was applied to managers onlyit was pay for
  performance with no new moneyjust move money
  around. Created uproar in management and after
  three attempted fixesit failed and was killed in
  early 90s. If it failed then, why resurrect it
  for everybody now?

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No Pay for Performance Issues

• DOD POINTS TO Pay Demos as evidence of Success
• SO I reviewed DODs own report and data
• Here is what I found.

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DOD Demonstration Report

• PURPOSE To Improve Effectiveness
• Found Limited impact on effectiveness
• Wave 1 Survey only 37 responded favorably
  that demo improved operations
• Wave 2 Survey only 27 responded favorably
• Wave 1 2 were demos grouped by start

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DOD Demonstration Report

• 12 demos and no measurable increase in
  effectiveness and only a small minority saw any
  improvement.
• Failed to meet the 1 Objective of Overhaul
• If no real difference, then why waste the time ,
  energy and resources and turmoil?

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DOD Demonstration Report

• 2nd Objective-Lift pay restraints to be more
  competitive in recruitment
• Found Demos did not see improvement in
  offer/acceptance ratios from pre-demonstration
  levels

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DOD Demonstration Report

• Performance Ratings Fairness
• Objective to improve with better Training and
  Communication since current systems called
  lousy and high quality performance system key
  to successful pay for performance program

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DOD Demonstration Report

• Performance Rating Fairness Comparison
• GS------68-73 fair and accurate
• Wave 1-55-61 fair accurate
• Wave 2 -55 67 fair (but 55 came in most
  recent survey year i.e.., getting worse)

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DOD Demonstration Report

• Rating Fairness Perception by Minorities
• Worse under new more flexible systems
• GS-Improved from 64 in 96 to 70 in 2001
• Wave 1 only 56 in 96 decreased to 49 in 2001
• Does greater latitude lead to increased
  favoritism and discrimination?

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DOD Demonstration Report

• Objective Improve perception of external pay
  equity
• Perception of pay inequality with surrounding
  employers increased between 96 and 01
• The competitive problem cannot be solved by this
  scheme. It takes !!!

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DOD Demonstration Report

• Objective Increased Organizational Commitment
• Found No difference between demo and non-demo
  employees

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DOD Demo Report

• Objective Critical retention would improve
• Found No discernable difference between demo and
  non-demo groups.

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DOD Demo Report

• DOD actually put more money into these demos to
  make them work to the degree some say they
  worked.
• However DOD has stressed that it will NOT have
  more money, but at best it will be budget neutral
  thereby generating far worse results than are
  depicted under the demos.