Legislation authorizing Defense funding for fiscal 2012, passed by the House on Thursday, would encourage the department to use employee performance rather than job tenure to determine incentive pay under its new performance management system.
Congress repealed the National Security Personnel System in the fiscal 2010 Defense authorization law, giving the department until Jan. 1, 2012, to roll back the controversial pay-for-performance system completely. Lawmakers also authorized the department to make changes to its performance management, workforce incentives and hiring flexibilities.
"Such incentives could include both monetary (such as quality step increases or cash awards for performance) and noncash awards," this year's Armed Services Committee authorization report states. "In addition, the department should develop measurable personnel performance metrics and consider whether professional certification programs are appropriate."
The fiscal 2012 authorization also would extend a requirement that the Pentagon submit progress reports to Congress and acknowledges that further legislative change may be necessary for Defense to implement a fair and transparent performance appraisal system.
Labor unions representing Defense civilian employees have been in negotiations with agency officials to design a replacement for NSPS. According to Matt Biggs, legislative and political director for the International Federation of Technical and Professional Engineers, the process could be complete in September, but limited funding to provide performance incentives could delay implementation for several years.
"With the current budget situation, there's no money for anything," he said. "Labor and management will probably come up with a really good system that won't be funded."
The process also has created conflict with the American Federation of Government Employees, which pulled out of talks in March after one union representative was removed from the negotiating team.
According to AFGE, Defense denied Julie Sheehan, an Air Force employee, permission to participate on the design team responsible for the NSPS overhaul in retaliation for her organizing and collective bargaining efforts. She has since been subject to accusations of poor job performance and placed on a performance improvement plan. Labor officials called the actions "union busting."
AFGE's buy-in is critical to the project's success, Biggs said, adding that the final performance management system could be an example for the Office of Personnel Management to roll out governmentwide.
The fiscal 2012 authorization bill also would prohibit Defense from awarding raises to poor performers. According to the committee report, this would affect just 1 percent of the department's 700,000 civilian workers. An incentive is necessary to encourage employees to improve their performance, the committee wrote.
"They're getting out in front of themselves," said Biggs. "If management does their jobs properly, they can already deny poor performers a raise. It pretty much takes the power out of management's hands."