Panel endorses performance-based pay for Defense intelligence employees

An independent panel has concluded that the Defense Department should move forward with its performance-based pay system for civilian intelligence employees, after making significant adjustments in implementation to address issues such as employee mistrust of the ratings process.

The Defense Civilian Intelligence Personnel System is soundly designed and there is no evidence it contributes to problems with diversity, a panel of the National Academy of Public Administration found in a report to Congress and the Defense secretary. But in the rush to place employees at nine intelligence components under uniform policies linking pay to job performance rather than tenure, officials overlooked some management practices critical to DCIPS' ultimate success, the report said.

Among other issues, leaders showed uneven levels of commitment and failed to communicate how performance-based pay fit with the intelligence mission, the panel found. Training for supervisors focused too heavily on the mechanics of the system and did not place enough emphasis on leading cultural change, said Darlene Haywood, deputy project director at NAPA.

Officials also disseminated inconsistent messages about how DCIPS works, according to the report. For instance, dozens of employees from at least four intelligence components said they were told their performances were being rated on a bell curve, even though such a practice is prohibited.

"DCIPS design has a built-in series of checks and balances, but employee experiences with the rating review and quality assurance processes have led them to believe it is opaque and untrustworthy," the report stated.

The panel recommended a "more thoughtful, incremental and methodical approach" to implementation, better training, clearer communication with employees, creating a formal process for gathering feedback from workers, and establishing a program management office to increase accountability. The group urged Defense to address these issues expeditiously so it would be ready to phase back in the performance-based elements the fiscal 2010 Defense Authorization Act suspended pending the NAPA report. The report recommended a deadline of Nov. 1 for getting in place new policies and suggested the phase-in happen on a component-by-component basis, after each had made the necessary implementation reforms.

An initial version of the fiscal 2011 Defense authorization measure would extend the moratorium on DCIPS, but the Obama administration has come out against the freeze, noting it would prevent the Pentagon from taking "meaningful action" based on NAPA's findings.

The NAPA panel also favors lifting the suspension after determining a performance-based pay system is critical to successful intelligence operations.

"The panel concluded that a performance-based pay system that provides recognition for individual as well as collaborative performance can produce more robust discussion and better intelligence products that will significantly strengthen our ability to thwart attacks," wrote Jennifer Dorn, president and chief executive officer of NAPA, in the introduction to the report.

The Defense secretary has until August to respond to the report.

"The department is embracing NAPA's recommendations," said spokeswoman Lt. Col. Rene White. "We find the advice to be positive and sound, and in line with our intent to promote a system that helps better align individual and organizational performance to our mission."

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