Defense tests new personnel system on laboratories

Proposed changes for personnel demonstration projects at Defense Department laboratories mark the first major step toward implementing a new civilian personnel system at the department.

An amendment published in the April 2 issue of the Federal Register asked for comments on a best practices plan that includes elements of 11 demonstration, or pilot, projects and alternative personnel systems. Once the final amendment is printed in the Federal Register, existing personnel demonstration projects will have to adapt to the measures, which include changes to pay-banding systems, classifications, hiring authorities, pay administration, pay-for-performance evaluation systems and reduction-in-force procedures.

"This is the first step in that process of putting all of DoD under one system, and this Federal Register notice will serve as the foundation for their future national security personnel system, which is proposed legislation," said Janice Lynch, demonstration project leader for the Office of Naval Research. "There would be drastic changes for all of the demonstrations."

The plan calls for Defense to move away from the General Schedule and create five career groups with corresponding pay bands. Employees would no longer receive step increases, within-grade pay increases or annual across-the-board raises.

Under the best practices plan, most Defense research laboratories would convert from a contribution-based system to a performance-based system, according to Tim Barnhart, president of FMP Inc., an Alexandria, Va.-based consulting firm that helps agencies with human resources challenges. According to Barnhart, many of the laboratories "pay their employees based on an assessment of the employee's contribution to the mission and business goals of the organization."

"It creates a traditional performance pay system, sort of like merit pay was," Barnhart explained. "Employees are paid for performing the job versus being paid what they are worth based on what they have contributed that year."

According to Barnhart, many Defense agencies may find that a performance-based system "boxes them in, is bureaucratic, and fails to build the human capital they desperately need."

"Contribution-based models pull employees out of their position boxes and place them in much larger mission and business boxes," Barnhart wrote recently in a white paper on contribution-based systems. "The message is not: Do what is in your position description, do it well, and we will reward you. The message is: Take initiative to bring about results that impact the mission and we will pay you whatever that is worth."

Navy's Lynch had concerns about how some elements of the proposed pay-banding structure would fit with her organization.

"One of the big benefits that we had in our science and technology demonstrations is that we had a dual track," Lynch said. "Individual performers could earn as much as supervisors and you got away from really good scientists, in order to get a pay raise, having to go into management positions. This reestablishes being able to get additional pay just because you are a manager."

At the Army's Communications-Electronics Command (CECOM), a special pay-band used to recruit and retain engineers and scientists might disappear under the new system, said Don Jenkins, associate director of the personnel demonstration project for one of CECOM's directorates.

"It's very competitive in our area . . . these are individuals that really, at a GS-13 salary, it's hard to keep them," said Jenkins. Under the CECOM demonstration project, scientists and engineers could be promoted beyond the GS-13 salary level. "If they could include some of our engineering subject matter experts up in there, that might help out," he added.

But in some areas, CECOM, which just completed its first full evaluation and raise cycle, would gain more flexibility than it already has under its demonstration project.

"It looks like you'd be able to promote within the pay-band, which we are not able to do now," he said. "There is a layering structure for supervisors, where their pay is based upon how many people they supervise-that doesn't have a lot of detail-but that has the potential of being good."

Officials at the American Federation of Government Employees said they are "wary about pay-for-performance."

"Some of these places where it seems to be successful, they were tried on very specific groups, where there were highly trained professionals who were given a lot of latitude to excel," said Jacqueline Simon, AFGE's public policy director. "The evaluation systems, to the extent that they are fair, involve a tremendous amount of managerial resources; they are filling out paper after paper after paper, page after page after page, to the extent that they are classifying and reclassifying these jobs."

Simon said the demonstration projects worked because they were so specific to the participating work groups.

"Before you rush to impose this on everybody, you've got to realize that sometimes the unique characteristics of the work group sometimes contribute to the success or failure," she said.