| Comment Number: | OL-10512211 |
| Received: | 3/16/2005 11:48:05 PM |
| 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:
Pay and Pay Administration—Subpart C ---Performance-Based Pay--- The pay pool is funded by the historical amount of awards, increases, and promotions granted under the GS system. However, if the employees in the pay pool were historically under-graded, under-promoted, and/or under-awarded in relationship to their performance and contribution to the organization, the pay pool will be underfunded. For example, in my previous organization, a five step rating system was replaced with a pass-fail system. End-of-cycle awards, once prevalent, ceased altogether despite the organization being widely recognized as high performing. Lower value “on-the-spot” awards were promoted. Dollars shifted from awards to establishment of new positions.// Historically, employee salary expense has been seen by uniformed leaders as an operations and maintenance cost to be managed. As with other costs, the goal has been to pay as little as possible. That is compounded by the fact that federal salaries have been below market levels for years. This is the perverse effect of tight budgets on performance-based pay.// With a fixed dollar budget, the obvious fact is that an above-average increase for one employee reduces the money available for increases for others. Salary budget management is sometimes referred to as a “zero sum” game, since each plus has to be offset with a minus. “The performance payout [in NSPS] is a function of the amount of money in the performance pay pool and the number of shares.” The value of each share is inversely related to the total number of shares assigned in the pay pool – the more the shares, the less the value of each share. A high performing employee receives a greater performance payout among a pool of low performers than among a pool of high performers. Seek a low performing team, and stand out from the crowd? This perversity is contrary to the overall objective of NSPS to improve the overall performance of an organization.// “Subject to DoD guidelines, pay pool managers will have the discretion to determine the proportion of an employee’s total performance payout paid as an increase to basic pay or as a bonus.” The value of the performance payout decreases dramatically as it shifts from an increase in basic pay to a bonus, yet it gives the appearance of being a fixed amount. In this context, the proportion allotted to a bonus is really a denied increase to basic pay. A bonus is not a bonus; it is inferior to an increase in basic pay. Yet the performance rating is the same regardless of the allocation between the two. This presents a budget management opportunity for the organization at the expense of the employee.// To maintain a “zero-sum” budget, some organizations have adopted variations of a "forced distribution system" in which only a predetermined percentage of employees are eligible for the largest pay increases, a certain percentage are designated as poor performers, and the rest fall somewhere in between. This is fundamentally invalid. It presumes that any sample (pay pool) is representative of the agency’s population of employees. Worse yet, the distribution could be established by some preconceived or broad generalization.// There was no acknowledgement that many of the raters will be uniformed personnel or other personnel whose pay is not subject to NSPS. Some uniformed personnel do not buy into the notion of cash awards, since they cannot receive them personally. Some even resent monetary rewards that are a part of the federal system.// --Pay Administration-- The NSPS grants authority to place new hires and reinstated employees anywhere within a pay band up to the maximum with no similar flexibility for current employees. The NSPS emphasizes recruiting highly qualified employees to the DoD almost to the exclusion of retention of highly qualified employees. Rather, an overemphasis has been placed on achieving control over poorly performing employees.