Panel recommends reform of Pentagon pay system

This story was updated to reflect the latest news.

A draft report from the task force assigned to review the Pentagon's pay-for-performance system recommends reconstructing the controversial program instead of eliminating it.

The three-member panel on Thursday presented its preliminary findings on the National Security Personnel System, calling on the Obama administration to continue the existing moratorium on employee conversions into NSPS until it can correct several weaknesses.

The group said NSPS is too complex and lacks transparency, and urged the Defense Department to continue exploring ways to implement a workable pay-for-performance model for its civilian employees.

"Reconstruction is a level of effort and sophistication which goes beyond fixing," former Defense deputy secretary Rudy deLeon, the head of the task force, said at the meeting. "It's going to require a significant amount of diagnosis."

Specifically, the task force said the personnel system's paybands were too broad and the possibilities for promotion limited. The group, which presented its findings in a PowerPoint document, said Defense should have implemented NSPS with more cooperation from federal employee and manager groups.

"It was too much, too fast," deLeon said.

The panel submitted its draft recommendations to the Defense Business Board, an independent advisory board for the department.

Congress also has weighed in on NSPS. The fiscal 2010 Defense authorization bill, passed by the House in June and now under consideration in the Senate, contains language that would require Defense to make the case to Congress for reforming NSPS or begin dismantling the system within one year.

The task force will present its final report on the pay-for-performance system to the administration later this summer.

Bob Tobias, former president of the National Treasury Employees Union and a member of the task force, said after Thursday's meeting that the performance management aspects of NSPS had value, even if the pay pools -- the panels that tie performance reviews to raises in the system -- were flawed.

NSPS critics blasted the panel's report, claiming it was inadequate and didn't go far enough to eliminate the system.

John Gage, president of the American Federation of Government Employees, said he was frustrated with the report, and any attempt to salvage the NSPS was hopeless.

"The report is very superficial. It diagnoses the disease, but it certainly didn't prescribe the cure," Gage said. "This system is not just bad in its implementation. It's really fatally flawed in the philosophy behind it."

He dismissed the panel's calls for greater collaboration between policymakers and labor groups, noting the legislation authorizing NSPS contained similar language that he said was ignored. He also said increased transparency isn't enough to fix NSPS.

"The sunshine will cook it," Gage said.

Gage said his union will continue to push for the elimination of NSPS, but that he was willing to talk with administration officials about alternative performance management systems, including linking pay to performance.

Other union leaders agreed.

"We believe the best course of action is to abandon this failed personnel system once and for all, not to try to restructure it," said William Dougan, president of the National Federation of Federal Employees, in a statement. "The thought of starting over on NSPS is comical. If the recommendation is to scrap NSPS as it exists today, we should not bother creating a new NSPS in its place. We should start with an entirely new concept altogether."

NSPS also has critics on Capitol Hill.

NSPS Program Executive Officer Brad Bunn said he would work with policymakers to implement reforms.

"I can't say I'm surprised by the recommendation," Bunn said. "The NSPS was set up from the beginning to change over time."