The Pentagon will soon propose the first step in the effort by introducing the new system throughout its network of military laboratories. Lab employees would be reclassified into new career categories and pay levels, using a far more flexible pay structure similar to those used by large corporations. The new system would replace existing personnel reform experiments, called demonstration projects, at the labs.
Dov Zakheim, Defense comptroller, said the Pentagon’s immense size and unique mission require a system better suited to its needs than the 50-year-old Title 5 rules governing most federal civilian employees allow.
“We believe that we are in a unique situation,” he said. “We need to have a much more different, much more responsive civilian personnel management system.”
If approved by Congress, the conversion of all 642,000 Defense civilian employees to the new system would cut the Office of Personnel Management out of the Pentagon’s affairs, providing Defense broader latitude to manage its work force.
Coming on the heels of last year’s decision to grant the new Homeland Security Department authority to recraft its personnel rules, the move would reduce the scope of the General Schedule and Executive Schedule personnel systems by roughly half.
OPM currently oversees pay and benefits rules for most civilian employees, including those at Defense. Defense Secretary Donald Rumsfeld’s plan would transfer personnel control over Defense civilian employees to the Pentagon.
Doris Hausser, senior policy adviser to OPM Director Kay Coles James, said the agency has been provided only a “conceptual overview” of the Pentagon’s legislative proposal and that it appears to adhere to the administration’s general principles regarding personnel management reform.
But Defense leaders are not waiting for the administration or Congress before advancing their plan, and have already drafted a version of the plan for publication in the Federal Register. The draft notice, obtained by Federal Times, indicates the department intends to combine and expand eight existing demonstration projects under way at some Defense laboratories.
OPM is reviewing the draft plan to make sure it complies with current law and Congress’ intent when it gave Defense flexibility to try out alternative personnel practices at its labs, Hausser said.
The Pentagon plan, dubbed the Best Practices Project, places the lab workers into five career groups, each with a unique four-level salary schedule. The schedule provides managers wider latitude than the current system for paying personnel doing similar jobs, regardless of time in service or career experience. A Level 1 employee in the professional, administrative and management career group, for example, could earn up to $55,873 — as much as a GS-11 employee today — according to the draft notice. But a Level 1 employee in the business and administrative support career group would top out at only $30,471, or about the same as a GS-5 today.
Automatic, across-the-board pay increases would be eliminated, except for locality adjustments. Instead, managers would have far more flexibility to give steep raises to recognize employees with critical skills or exceptional performance ratings.
The new personnel system would create new criteria for promoting, reassigning and demoting employees. Employees seeking to move into a job with a higher pay scale would have to compete for that job, but competitions would not be held for employees moving to jobs with no higher earning potential or less earning potential.
The project also changes how employees are let go during a reduction in force. The current process places priority on protecting the jobs of those with most seniority; the new system would place greater priority on protecting the best performers or those who are veterans.
New employees hired into the system would be on probation for the first three years, instead of the current one-year probationary period. Some Defense laboratories already do this.
If approved by the administration, the Pentagon intends to publish the new lab personnel plan in the Federal Register and invite public comment.
Congress gave the Pentagon authority in 2000 to carry out personnel demonstration projects at Defense science and technology labs. The lab work force was downsized considerably during the 1990s, and the employees who are left are rapidly approaching retirement. Under the demonstration authority, Defense can offer higher salaries and bonuses than under the General Schedule.
To read the draft Federal Register notice outlining the Pentagon’s proposed personnel system for its laboratories, click on the links below. The files are large and could take a while to open depending on your Internet connection speed.