| Comment Number: | OL-10510554 |
| Received: | 3/16/2005 10:26:01 AM |
| Subject: | Notice of Proposed Rulemaking, Request for Comment |
| Title: | National Security Personnel System |
| CFR Citation: | 5 CFR Chapter XCIX and Part 9901 |
| No Attachments |
Comments:
Subpart C (Pay and Administration) Sections 9901.341 – 345 (Performance-based pay) Federal Register Pages 7582-7583 I concur with the proposed changes to the Department of Defense (DoD) personnel system and I applaud the DoD’s plans to make it more efficient. However, I see one potential problem area that I believe needs to be effectively addressed before the new National Security Personnel System (NSPS) is implemented. I understand that the new NSPS will provide for pay increases and bonuses to be paid for superior job performance, while eliminating automatic longevity-based Within-Grade-Increases (WGIs), also known as “Steps”. This change is commendable and should motivate most conscientious DoD employees to excel at their job performance. However, I also learned from my previous experience as an employee in the Department of the Treasury that pay increases and bonuses for superior performance have little to no effect on motivating employees unless the pay increases and bonuses: 1) are based upon receipt of superior performance appraisals for pay increases and formal sustained superior performance awards for pay bonuses, which both require detailed supporting justification, 2) are substantiated with measurable employee accomplishments that are verified by management, 3) can only be submitted by supervisors and approved by managers, 4) are limited in number to not more than the top 50% of all employees within an organization, 5) are based upon impartial, supportable assessments of individual job performance using objective and quantifiable measures of productivity and quality, and 6) are of sufficient monetary amount (at least 5% of the employees annual salary) to motivate an employee to provide more than the minimum amount and quality of work required by his/her job description. Here is a real-world illustration of the potential problems with the proposed pay increase and bonus provisions. When I was an employee of the U.S. Customs Service (USCS), the USCS management at the port where I work instituted an annual monetary award pool of approximately $250,000 for its superior performers. The local chapter of the National Treasury Employees Union (the bargaining agent representing U.S. Customs Service employees) supported the concept and participated in the combined management-labor award review board that reviewed and approved nominations for the monetary awards. However, several developments quickly emerged that completely corrupted the integrity of the process and its outcomes. First, nominations were accepted from anyone within the organization, so naturally not only did supervisors nominate their favorite employees (regardless of whether they were actually superior performers or not), but employees also nominated each other for monetary awards in blatant “quip pro quo” arrangements between themselves. Not surprisingly, the award review board was overwhelmed with nominations and had to prematurely declare an early deadline for submission of nominations. Second, the criteria for approving the award nominations were vague and ambiguous, not objective or measurable, and as a result the vast majority of nominations for monetary awards were approved without credible support. Some awards were even approved based upon fraudulent justifications fabricated by the nominees and without any verification of the alleged accomplishments. Third, since there were no numerical limits on the number of nominations that could be approved, an absurdly high percentage of the nominations were approved, resulting in approximately 650 employees out of a bargaining unit of approximately 1000 employees receiving monetary awards for supposed “superior performance”. This is a 65% approval rate, which is illogical and unsupportable, since it is statistically impossible for 65% of a population of 1000 employees to be “above average”, let alone be “superior” or “outstanding”. Clearly, the nomination and approval process was manipulated and corrupted by supervisors, employees and the union alike to ensure that the maximum number of employees received a share of the “loot”. As a result, the monetary award pool of approximately $250,000 was distributed in small “share” portions among the 650 employees, most of which received monetary “share” awards ranging from $250 to $500, which was roughly equivalent to 0.5% to 1% of their annual salaries. This was a pittance and did nothing to motivate employees to excel in the years that followed, but it did convince them that they were entitled to receive shares of any future monetary awards regardless of the quality of their future job performance. The $250,000 would have had a more positive impact on overall employee performance if it had been awarded to the top 10% of the organization’s employees (100 employees), who would have each received an average award amount of $2500. Overall, the program was a failure with respect to motivating employees to excel and a gross waste of taxpayer dollars, and it accomplished nothing more than spreading one quarter of a million dollars around to the majority of the employees, most of whom did not even deserve the additional money. Finally, the most important lesson that I learned was that in order for a pay increase or bonus to have the desired effect on employee performance, it must cross a psychological threshold that creates a “lottery winner” effect, meaning that the amount of the pay increase or bonus must be so large and significant that it provides the employee with substantial additional income comparable to winning a lottery. While the DoD certainly cannot afford to provide pay increases and bonuses of a million dollars to each of its superior employees, it can take steps to ensure that the pay increases and bonuses received are both psychologically significant and financially beneficial ($250 to $500 is neither). I therefore recommend that the NSPS implementing regulations provide for a standard pay increase or bonus of either 5% of the employees annual salary, or a fixed amount of not less than $1250, whichever is greater. The reason that $1250 should be the minimum pay increase or bonus amount is because an amount of $1250 will actually result in a net pay increase or bonus amount of only $1000 after federal income tax is withheld, and a net amount of less than $1000 will not have any effect on an employee’s motivation because it will not be perceived as being worth the additional effort. The bottom line is that if the DoD wants to use money to improve an employee’s job performance, then it has to offer an incentive amount of at least $1000 after deduction of income taxes. Please take these comments into consideration during your deliberations on the subject proposed NSPS regulations.