GovernmentExecutive.com

In the first of two sets of public hearings taking place on Thursday and Friday in Virginia on the viability of the Defense Department's National Security Personnel System, the review board focused on the impact of pay on performance, trust between managers and employees, and the quality of training for supervisors.

"There is little evidence that pay for performance on its own improves organizational performance," said John Crum, director of the Office of Policy and Evaluation at the Merit Systems Protection Board. According to Crum, the amount of money at stake in federal pay-for-performance programs is far too small to motivate employees, and for such systems to be effective, 20 percent to 30 percent of salary would have to be at risk in any given year.

Board member Robert Tobias asked Brad Bunn, the program executive officer for NSPS, whether it was necessary to overhaul the pay system to convince employees to perform better, rather than simply strengthening performance management. Tobias is a former president of the National Treasury Employees Union who now teaches at American University.

Bunn said linking pay to performance management was a key driver in encouraging employees, supervisors and high-level managers alike to spend additional time on performance management activities and to take those efforts more seriously. But Bunn acknowledged that while his office tracked the number of Defense Department employees who improved their performance ratings from year to year, it did not track whether employees and their organizations became more productive when they were included in NSPS. Federal union leaders seized on that admission during their testimony to mount pointed critiques of the system.

The differences of opinion between management officials and employee representatives were sharply drawn throughout the hearing. The first set of witnesses -- which included Crum, Bunn and Brenda Farrell, the Government Accountability Office's defense capabilities and management director -- suggested it was too early to draw a conclusion about whether NSPS had succeeded or failed. But the second panel -- which included National Federation of Federal Employees President Richard Brown, American Federation of Government Employees President John Gage, and Federal Managers Association President Darryl Perkinson -- said the system was irretrievably broken. Both panels agreed that the way officials implemented NSPS fostered mistrust between employees and management, and they said Defense had been unable to achieve full employee buy-in.

Rudy de Leon, the review board's chair, carefully avoided making sweeping statements about NSPS, but said the original decision to package the personnel system with provisions designed to erode collective bargaining "served to greatly damage the strong sense of partnership and commitment that had existed between labor and management in previous administrations." He suggested NSPS was a symptom of a larger decline in labor-management relationships at federal agencies, which could be corrected by a resurrection of the labor-management partnership councils created by President Clinton and disbanded by President Bush.

Brown warned the panel "should not underestimate the extreme distrust DoD workers have for NSPS," given that initial approach, and said that even over time, those workers' opinions were "not likely to be swayed by minor policy changes" to the system.

Farrell said GAO was concerned that Defense lacked a comprehensive plan to address employees' lack of trust in the rating and pay pool systems, noting that the longer employees were covered by NSPS, the less they thought of it.

A number of witnesses said that beyond the issues with NSPS' origins, employees were struggling to trust supervisors to perform fair and useful evaluations, and supervisors were having trouble adjusting to the time and skills required to manage employees much more actively.

Bunn said the training programs his office had designed for managers focused not only on how to handle the NSPS rating process, but on basic management tasks ranging from mentoring employees to assigning resources. Defense had a cadre of supervisors who took those positions on the basis of technical competence rather than an aptitude for leading other employees, he noted, adding that it would take a significant culture shift to either prepare those supervisors to manage effectively or move them to positions more suited to their talents. Michael Bayer, the third member of the review board, asked Bunn whether supervisors had been reassigned or fired because of their inability to adapt to their new duties under NSPS. Bunn said his office did not track such reassignments, but he was sure they had occurred.

Tobias appeared skeptical that managers or rank-and-file Defense employees would ever truly accept the major culture change NSPS requires. "Why do you assume that these folks will change?" he said. "These are people who have been around for a while -- 20 years, 25 years. Why will they change?"