Under the new Defense personnel system, the cost of liberty is high.
When the Defense Department began moving its civilian workforce to a new personnel system almost two years ago, Pat Tamburrino knew managers would have their hands full. Many had little experience writing measurable job objectives or linking pay raises to performance.
Tamburrino was the executive director of one of the first organizations to convert to the National Security Personnel System-the Naval Sea Systems Command-which moved to NSPS in April 2006. Tamburrino expected that the new system would force him to spend much more time training and coaching employees. After all, it had been just two years since Congress had granted Defense the authority to create a brand new human resources system in the hope of empowering managers and enabling a more effective response to terrorism.
Under the old system, "performance reviews were of no value to the employee because they were done without any conscience," says Tamburrino, who is now an assistant deputy chief in the Office of the Chief of Naval Operations. "Managers didn't spend a lot of time setting objectives, and [employees] didn't get a lot of feedback from their bosses during the course of the year."
Recognizing such deficiencies, Defense has been moving employees into the system in waves, known as spirals, and training them and their bosses at every turn. So far, more than 110,000 white-collar civilian employees have transferred to NSPS; it's planned to eventually cover 700,000.
With a focus on flexibility, the system enables the department to link pay raises more closely to job performance and to move employees between jobs without competition or piles of paperwork. But above all, it seeks to increase managers' room to maneuver-a benefit that comes with significant cost.
Time and Training
So far, managers say, NSPS is requiring them to spend much more time coaching and rating employees. "It's not a simple system to implement," Tamburrino says. "You have to do a lot of training and coaching, and you have to invest a lot of time."
As a result, Tamburrino says he was telling first-line supervisors to anticipate spending 40 to 60 hours per employee in the first year of NSPS. But the amount of time devoted to managerial duties won't necessarily taper off once managers become more accustomed to the system. After all, if they are engaging in effective conversations with employees at least four times per year, he says, 40 to 60 hours is not unrealistic.
His assessment is consistent with Office of Personnel Management standards, which hold that all managers should spend at least 25 percent of their time performing supervisory duties. "That's two hours out of every eight coaching, mentoring, setting priorities and giving feedback," Tamburrino says. "It takes time."
According to Rachel Dondero, director of the Navy's executive personnel division, NSPS should be a large drain only for managers who weren't doing their duty before it. "We really are now doing what we should have been doing all along," she says.
Many managers agree that their greatest challenge is working with employees to craft performance objectives, keeping in mind that evaluations and pay increases hang on how well they meet those goals. Tamburrino says another challenge also comes into play during the rating process-many employees shy from boasting about their accomplishments.
"People don't like to brag about themselves, and as part of NSPS, when employees write their self-appraisals, they have to say 'I really did good stuff,' " Tamburrino says. "To get people to think about themselves like that is hard." Once employees grow accustomed to touting their work, managers must then disabuse them of the notion that high performance ratings will remain stellar from year to year. "Some years are boom years, and some are just normal years," Tamburrino says. "That's another thing we've had to convince people of; once you're [rated] a five, you're not always a five. That's a hard conversation to have with folks."
The managerial workload is heavy for high and low performers alike, says Darryl Perkinson, national president of the Federal Managers Association and a supervisory training specialist at Norfolk Naval Shipyard in Portsmouth, Va.
Each employee requires the same amount of attention and review. "Documentation is key to supporting those people you feel should get a little above and beyond the average pay raise," says Perkinson, who will move to NSPS in February. "But to be consistent, you have to put that level of effort forth for everyone." He says he looks forward to setting mutual job objectives with those he manages: "Everyone will know what the game plan is and where we're going."
Elizabeth Waldron-Topp, president of FMA Chapter 104 in California, also is a fan of pay for performance. She came to her post as a transportation-logistics manager at Edwards Air Force Base under the Defense acquisition demonstration project, which began in 1998 as part of a series of endeavors testing pay and personnel flexibility. In early 2007, she moved to NSPS. "I know from a personal standpoint, if we weren't under a pay-for-performance system, I wouldn't be working for the government," Waldron-Topp says. "I work very hard, and I want to be rewarded for those efforts."
Other managers aren't as open to NSPS. Some contend that the extra work required to grant employees relatively small sums of money isn't worth it. "Through everything that I've seen in class and have done, I've realized that the only thing that NSPS is doing is saving the government money," says a manager who requested anonymity. "It generates more anger and frustration than any motivation." Some also complain that it's expecting too much to force them to manage under NSPS along with older personnel systems. "We have a portion of employees under NSPS and all of our wage-grade employees under the old system," says another manager who requested anonymity. "It's unjust for the department to put us through that."
Waldron-Topp, who manages employees under four different pay systems, says juggling all the rules is difficult, but it hasn't altered her favorable view of NSPS. "What makes it so difficult is you can't be an expert in all the systems," she says. "But if everyone comes under the same pay system, it's going to be awesome."
Defense has taken a two-tiered approach to training managers: One focuses on "soft" skills, such as communicating with and coaching employees, and the other keys in on technical and functional capabilities, according to Mary Lacey, program executive officer for NSPS. "Many of our supervisors have allowed their [soft] skills to get rusty over the years," she says. "We've had to focus some energy on getting them back into their prime."
Training soft skills is more difficult, and requires face-to-face interaction, Lacey says. Thus, Defense is delivering it in the classroom. "Training soft skills generally is not done well on the Web," she says. "It usually requires the high-touch approach." Conversely, training in technical and functional skills is Web-based. It includes an introduction and explanation of NSPS, as well as instruction on developing performance standards and writing self-assessments, Lacey says.
She says Defense has not taken a one-size-fits-all approach to training. Understanding of performance management varies, Lacey says, so she allows organizations to tailor training to fit their needs. "We have some employees coming into NSPS where the only system they've been in their entire life is a performance-based pay system with broad pay bands," she says. "We didn't need to teach them all the basic pieces."
The goal of NSPS is to link performance more closely to mission, but managers must make sure employees' objectives aren't overly burdensome or restrictive, Tamburrino says. Managers learn the SMART rubric for setting employees' goals: simple, measurable, achievable, results-oriented and time-bounded.
While training programs have provided a strong foundation, Waldron-Topp says she has learned more by doing. "I'm seeing that until you go through an entire performance cycle, you really don't understand what you're being trained on," she says.
Meanwhile, to win over employees, Defense has added town hall sessions where they can voice questions or concerns that managers can address. The meetings also help managers assess understanding of the new system. "That's been a hallmark of NSPS: You learn, you evaluate and you adjust," Tamburrino says.
Despite the strong emphasis on training, one key element of NSPS remains uncharted territory-labor relations.
Unions and Defense have been entangled for more than two years in a legal battle over proposed labor rules. The nine-union coalition leading the fight-the United Defense Workers Coalition-has held that the rules go far beyond the original intent of Congress in creating the new system and limit collective bargaining rights.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia put a halt to the coalition's legal challenge in May, ruling that Defense has the legal authority to limit collective bargaining rights through November 2009. In August, the coalition's request for review of that ruling by the full D.C. Circuit was denied.
The court's ruling left the Pentagon with the authority to bring all its unionized workers into NSPS, but in December, some lawmakers expressed a lack of confidence in certain portions of the system, including labor relations. House and Senate negotiators voted to restore collective bargaining rights, which will require Defense to negotiate many of the core elements of the system. Lacey notes there is some complexity to collective bargaining at Defense, however, largely because the department holds so many bargaining units. "We want the ability to move forward and not have to bargain 1,500 times every once in a while on some things," she says. "There's not a lot to gain in having 1,500 different versions of a system."
But unlike what the Pentagon envisioned for the system, the sweeping changes will place labor relations and employee appeals back under Chapter 71 rules, which govern labor-management relations for federal employees. That means unions can negotiate the same range of issues as elsewhere in government, and Defense employees can appeal major disciplinary actions to the Merit Systems Protection Board, an independent agency that adjudicates disputes between employees and agencies.
And while the Pentagon is fully willing to bargain under traditional civil service law, there are certain things the department would prefer to negotiate at the national level, Lacey says, giving drug testing policy as an example. Unions say they aren't averse to such an approach and already have submitted proposals for a national-level bargaining strategy. "Our union has never been opposed to national- level bargaining or other similar common-sense reforms," says Richard Brown, president of the National Federation of Federal Employees. The legislation would allow unions and the Pentagon to negotiate certain policies on a national level, while also enabling unions to bargain over the implementation of the system at the local level.
John Gage, president of the American Federation of Government Employees, calls the labor changes an "acceptable compromise." AFGE was planning to appeal the D.C. Circuit's ruling to the Supreme Court, but with recent action in Congress, such an appeal will likely be unnecessary. The union has until Jan. 7, 2008, to appeal.
Meanwhile, the new legislation also is likely to hamper the Pentagon's plans for performance-based pay and, more immediately, the 2008 pay increase for NSPS employees. The Defense secretary holds the authority to determine raises, and the Pentagon has announced its intentions to establish a "more robust and credible pay system" in 2008. Thus, NSPS employees have been scheduled to receive 50 percent of the government-wide raise, with the remaining 50 percent linked to performance. Starting in 2009, the Pentagon plans to distribute all raises based on performance.
But the bill requires Defense to make some modifications to that plan, requiring that NSPS employees receive 60 percent of the annual governmentwide increase that other federal workers receive. The remaining 40 percent would be allocated to the performance pay pools and distributed based on performance. Despite the major changes to the personnel plan, the Pentagon is intent on bringing the majority of its white-collar employees into NSPS, and it might be only a matter of time before the General Schedule is yesterday's news at Defense and perhaps in the rest of government.
Scrapping the General Schedule entirely has been an administration priority. But as President Bush's term winds down, the future of NSPS and overall personnel reform is anything but certain.
Nevertheless, Lacey emphasizes that NSPS is about basic management principles that aren't the province of a single administration or political party. And based on those principles, she says, there's no reason NSPS should not move forward in 2009. "If you go back and take a look at the major interventions in DoD, this is the first that happened under a Republican administration," she says. "It's a management issue, not a political issue, and I would like to think that good management would be valued by any executive."