November 17, 2003

Selling the System

By Richard Haney and Glenn Sutton

As the Defense Department prepares to transform its existing personnel system, which covers more than 700,000 employees, to the new National Security Personnel System (NSPS) approved by Congress, the workforce is voicing - sometimes loudly - understandable concerns through union representatives, letters to newspapers, and other forums.

Fortunately, the experiences of the Acquisition Workforce Civilian Personnel Demonstration Project (AcqDemo) and other demonstration projects illustrate some important lessons that could ease the inevitable friction of implementing major HR reform:

Managers and supervisors in pay-for-performance demonstration projects typically express shock at how much of their time is required for performance assessment, payout determination and feedback to employees, especially in the first few years. Effective training and software support can help to shorten this learning curve and maximize returns for the time invested.

In government, as in the private sector, most supervisors learn how to supervise by trial and error on the job; little formal training is provided. In the General Schedule system, where annual pay raises are all but automatic, lack of supervisory skills is unfortunate, but not disastrous. But in pay-for-performance systems - as attitude surveys clearly show - supervisory competencies such as employee assessment and feedback are critical because pay is directly affected. Employees must know that supervisors are knowledgeable in NSPS procedures and fair in applying them, and supervisors must know how to coach employees on their performance in order to help them improve.

A pay-for-performance system that includes effective supervisor communication is very powerful. Of those AcqDemo employees assessed as poor performers in the first ratings cycle, less than 6 percent remained in that low zone three years later.

As NSPS rolls out, senior leaders at Defense will need some measures of which features are working as designed and which require fine-tuning before adoption by the total workforce. Although many of the NSPS features have been tested in previous demonstration projects, none of these projects approaches the scale of a departmentwide implementation.

As the AcqDemo experience shows, there will be challenges ranging from software incompatibilities to procedural misunderstandings and organizational differences in implementation. Evaluation techniques - including attitude surveys, focus groups, exit surveys, and analyses of performance assessment, payout, and personnel office data - provide a wealth of useful information for decision-makers and reassurance for participants that the department is concerned about fairness and equity.

Pentagon leaders would do well to base the planning and management of NSPS transition on the experiences of its successful demonstration projects. After all, if you're trying to change a culture, you need all the help you can get.