DoD: Pay and Performance

Managers will be able to tie employees' compensation to how competent they are-or aren't-under a demonstration project planned for up to 50,000 Defense Department acquisition professionals.

Under the Acquisition Workforce Demonstration Project, set to launch in July 1998, acquisition offices throughout DoD plan to do away with the General Schedule for civilian employees and redesign the way they evaluate employees' effectiveness. The new evaluation system could lead to substantial raises for strong performers and pay freezes for poor performers.

The demonstration project, which will be the largest ever undertaken in the federal government, was authorized by Congress last year.

Several agencies, including the De- fense Logistics Agency and the Defense Information Systems Agency, as well as the military services, are to participate in the demonstration project.

The project will revamp the civilian classification system by combining the 15 grades of the General Schedule into a few broad pay bands. Advocates of broad banding, which has been pilot-tested in smaller projects at the Defense Department and other agencies, see it as a way to simplify job classification and give managers more flexibility to reward good employees than is allowed under the General Schedule.

With a broad-band system, managers will be able to adjust employees' pay according to their effectiveness using a "contribution-based compensation and appraisal system" proposed under the demonstration project.

According to the draft proposal, the contribution-based system differs from the civil service system in that "instead of basing the appraisal on how well a specified job is done, the appraisal is based on the job done well."

Managers will evaluate employees by looking at how their efforts have furthered their organization's mission. By helping employees figure out how what they do affects the mission, managers can encourage employees to "think outside the box" of their job descriptions, the demonstration project's designers say.

"People are working harder and smarter" in the acquisition workforce, says Greg Giddens, the demonstration project's director. "We're doing business differently, but we're still managing our people the same way we've been doing it for a long, long time."

The way employees are currently classified, evaluated and compensated makes it difficult for managers to reward hard workers, Giddens says. Under the demonstration, managers will be able to reward people.

Managers will also be able to punish poor performers.

Under the demonstration, managers will meet with employees at the beginning of each year to discuss the organization's objectives. Throughout the year, managers will encourage employees to work more efficiently and go beyond the activities listed in their performance plans.

At year's end, managers and specially-designed panels will rate em- ployees' contributions. Employees whose contributions exceed the value of their pay will receive salary increases. Others will have their pay frozen.

"Managers have to take employee development very seriously," Giddens said. Managers also will have to learn to think in terms of the organization's mission, and not just in terms of the tasks and activities employees perform.

"It will be a struggle to get everyone in that mind-set," Giddens said.

In addition to broad banding and the contribution-based appraisal system, acquisition managers could get an exemption from having to use the Priority Placement Program, which gives laid-off workers preference for job openings, and could offer employees paid sabbaticals to further their expertise in specialized areas.

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