[Federal Register: December 21, 2007 (Volume 72, Number 245)]
[Notices]
[Page 72776-72802]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21de07-132]
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OFFICE OF PERSONNEL MANAGEMENT
Personnel Demonstration Project; Pay Banding and Performance-
Based Pay Adjustments in the National Nuclear Security Administration
AGENCY: U.S. Office of Personnel Management.
ACTION: Notice of approval of a demonstration project final plan.
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SUMMARY: Chapter 47 of title 5, United States Code, authorizes the U.S.
Office of Personnel Management (OPM), directly or in agreement with one
or more agencies, to conduct demonstration projects that experiment
with new and different human resources management concepts to determine
whether changes in human resources policy or procedures would result in
improved Federal human resources management. The National Nuclear
Security Administration (NNSA) and OPM will test a pay banding system
in which within-band pay progression is based on performance. The final
project plan has been approved by NNSA, the Department of Energy, and
OPM.
DATES: This demonstration project will be implemented on March 16,
2008.
FOR FURTHER INFORMATION CONTACT: National Nuclear Security
Administration: Rosa Benavidez, Demonstration Project Leader, (202-586-
1622), Office of Human Capital Management Programs, 1000 Independence
Ave., SW., Washington, DC 20585. U.S.
Office of Personnel Management: Patsy Stevens, Systems Innovation
Group Manager, U.S. Office of Personnel Management, (202) 606-1574,
1900 E Street, NW., Room 7456, Washington, DC 20415.
SUPPLEMENTARY INFORMATION:
1. Background
In May 2006, NNSA responded to OPM's solicitation of interest in
undertaking a demonstration project to experiment with and test the
concept of performance-based pay increases. NNSA already had
substantial experience with such a mechanism. NNSA's enabling statute
(National Defense Authorization Act for Fiscal Year 2000, Pub. L. 106-
65, as amended) provided the NNSA Administrator with the authority to
establish not more than 300 scientific, engineering, and technical
positions as necessary to carry out the Administrator's
responsibilities, and to appoint individuals to these positions and fix
their compensation without regard to title 5, United States Code
(U.S.C.) [hereafter in this notice referred to as the ``NNSA excepted
service system'']. In developing an employment system to support this
authority, NNSA opted for pay banding and designed a performance-based
pay system. NNSA has made full use of its excepted service system
authority and considers pay-for-performance a highly effective tool to
attract, reward, and retain high performers. OPM's solicitation was
opportune. NNSA now desires to test the feasibility of expanding pay-
for-performance among the ranks of its larger General Schedule (GS)
workforce. At the same time, NNSA sees the demonstration project as an
opportunity to streamline the traditional position classification
system that governs GS positions by banding together one or more GS
grades. NNSA had done similar banding when it established its excepted
service system some years before. When NNSA submitted its official
proposal to OPM in August 2006, pay banding was a vital part of the
plan.
2. Overview
The NNSA Demonstration Project proposal was approved by OPM and
publicized in the Federal Register on February 28, 2007. With OPM's
preliminary approval given, and knowing that NNSA would receive
critical comments from the public and have about 6 months to refine its
plan, NNSA's Administrator asked the agency's top program managers to
re-examine projected career paths and proposed pay bands to ensure they
effectively met the varying mission requirements and management needs
found in NNSA's primary nuclear weapons, nuclear nonproliferation, and
naval reactors propulsion programs. NNSA's Office of Human Capital
Management Programs facilitated this re-examination. The agency's top
managers were briefed on the various management and mission
implications of the project, and discussions with managerial
stakeholder groups were held to elicit insights and perspectives on how
to ensure the project makes credible and meaningful contributions to
enhancing the overall excellence of NNSA's twenty-first century
workforce.
Meanwhile, there was a 30-day public comment period immediately
following publication of the proposed demonstration project plan in the
Federal Register, culminating in a public hearing on April 4, 2007,
held at the Department of Energy (DOE) headquarters in Washington, DC.
A total of 55 individuals, mostly NNSA employees, one NNSA sub-
organization, and one labor organization, submitted written comments
and questions. Two additional individuals provided comments and asked
questions at the public hearing. Many of these commenters offered
multiple comments and questions. A total of 170 different comments and
questions were received, with some of them duplicative. Comments
covered a number of different management and human resources topical
areas, and in some cases, pertained to more than one topic. Two broad
topics relating to pay bands and pay-related issues received the
largest number of comments and questions by a considerable margin.
There were 45 comments on pay-related issues and 39 on issues relating
to pay bands. Other topical issues earning numerous comments/questions
included staffing (17), position classification (14), management
accountability (14), excepted service (10), employee relations (7),
employee equity (6), performance management (5), and reduction in force
(4). An additional 25 comments and questions did not fall into one of
the above topical areas. Every comment and question received was
extremely important, as each helped to focus NNSA's top leadership
during the Administrator's re-examination of the project plan and
helped the leadership to better understand the long-term management and
employee implications of the project. Public comments and questions
often served as a catalyst to raising additional questions on the part
of top management. As a result of public comments received, NNSA has
made a number of substantive refinements to its plan and a few
clarifying editorial and textual changes as well.
3. Summary of Comments and Responses
Comments are arranged into 11 broad topical areas that correspond
to the topics identified in the previous section and are presented not
in an order dictated by the number of comments received, but in an
order that reflects the logic of the project's design scheme and
contents; i.e., in a topical order beginning with pay banding and
devolving through pay, position classification, staffing, performance
[[Page 72777]]
management, employee matters, and management matters. NNSA's responses
are generic summaries relative to the major issues raised by comments/
questions, rather than point-by-point responses.
(a) Career Paths and Pay Bands
There were several comments about proposed career paths, several
comments about the constituent job series in each career path, several
comments about proposed pay band pay rates, many comments about the
lack of pay band symmetry across career paths, and many comments about
the structure of proposed pay bands relative to the pay band structure
in NNSA's excepted service system.
(1) Career Paths
Comments: Several commenters wondered why NNSA didn't establish a
supervisory career path to recognize and reward supervision or have
more targeted and occupationally narrower career paths, as the Defense
Department's National Security Personnel System does.
Response: In designing proposed career paths, NNSA wanted to take
the broadest approach that made sense, given the nature of the work
performed and the nature of the occupations requiring this work. The
broader the design approach, the more employees are treated alike and
the simpler it is to administer pay banding. Employee equity and
systemic simplification are central goals of this project. In deciding
on the original career path proposal, NNSA opted to essentially build
its career paths around OPM's white-collar ``PATCO'' categories with
one exception. The PATCO scheme encompasses extremely broad groupings
of white-collar occupational categories, largely based on differences
in the nature of work and the essential job knowledge required to
successfully perform the work (for instance, whether work
accomplishment requires certain educational attainments, or analytical
ability, or subject-matter competencies, and so on). OPM defines each
distinct occupational job series according to whether work is
professional (``P''), administrative (``A''), technical (``T''),
clerical (``C''), or falls into a miscellaneous others (``O'')
category. NNSA's original proposal simply lumped into two broad primary
career paths all ``professional'' occupations and all
``administrative'' occupations, respectively, while combining all
``clerical'' and ``technician'' occupations into a third composite
career path, irrespective of whether positions in these career paths
possessed classifiable supervisory duties. There is no distinct PATCO
category for supervision. The notable exception to this extremely broad
general approach was an extremely narrow fourth career path, which
covered only the GS-084 Nuclear Material Courier occupation.
Notwithstanding the inclusion of only one job series, this career path
covers a sizable block of employees. There are about 300 couriers
scattered throughout the United States.
In light of the comments received regarding career paths, NNSA's
top managers have reconsidered and refined certain elements of the
original proposal, including career paths. NNSA has reconstituted its
two primary career paths into an Engineering and Scientific Career Path
and a Professional, Technical, and Administrative Career Path and is
establishing a fifth career path for interns enrolled in NNSA's Future
Leaders Program.
The most populous jobs in NNSA are engineering, followed by
scientific. As of August 2007, there were 205 GS-801 employees, 64 GS-
840 employees, and another 24 employees in positions classified in
other GS-0800 occupations. There were also 64 GS-1301 employees and 7
in other GS-1300 occupations. All together, there were 364 General
Schedule employees in engineering and scientific occupations, in
complement to the additional 425 engineering and scientific employees
appointed under NNSA's excepted service system authority and through
two other DOE excepted service authorities. Because engineering and
scientific employees perform work vital to NNSA's primary nuclear
weapons, nuclear nonproliferation, and naval reactors missions, and
because this cadre--engineers and scientists serving under either the
General Schedule or the excepted service system--predominates in NNSA
in comparison to other professional occupations (e.g., foreign affairs
specialists, industrial hygienists, attorneys, and the like), the
agency's top managers have decided to reconstitute the Engineering and
Scientific Career Path to exclude other ``professional'' occupations.
These other professional occupations are now incorporated into the
reconstituted Professional, Technical, and Administrative Career Path.
Future Leaders are recruited with academic achievement and
diversity in mind and traditionally have been appointed under several
competitive and excepted service authorities, with varying conditions
of employment and advancement opportunities unique to each respective
appointing authority. Establishing a Future Leaders Career Path, into
which all interns will be appointed and advanced, and making all
participants subject to pay banding will be of great benefit to NNSA
and the interns. Not only will the human capital management practices
attendant to these employees be standardized, but so will development
and advancement opportunities--one set of rules and expectations for
all Future Leader interns.
In lieu of a supervisory career path, or a supervisory pay
differential, NNSA will seek to recognize and reward supervisory
performance by providing supervisory bonuses as described in the
project plan.
(2) Occupational Series in Career Paths
Comments: Several commenters wanted to know how NNSA decided which
job series to assign to which career paths. In particular, there were
questions relating to why certain ``administrative'' occupations were
treated separately from ``professional'' occupations, since in the
opinion of some commenters, the work accomplished in NNSA, regardless
of whether performed, for example, by an engineer or program analyst,
or an accountant or budget analyst, was pretty much the same.
Response: As explained in the response immediately above, NNSA's
original career path proposal conformed generally to OPM's PATCO
categories. OPM assigns each authorized job series to one of these
categories for definitional and pay purposes. In constructing its three
broad career paths in the original proposal, NNSA simply used the same
PATCO series assignments as does OPM. In light of comments received
regarding the proposed demonstration project plan, NNSA has
reconsidered and refined certain elements of the original proposal,
including the constituent job series that make up respective career
paths. For instance, only professional positions whose occupational job
series are found in OPM's ``GS-0800 Engineering and Architecture
Group'' and ``GS-1300 Physical Sciences Group'' are to be included in
NNSA's redesigned Engineering and Scientific Career Path. After further
reflection, NNSA could not agree that such professional occupations as
GS-510 accountants, GS-690 industrial hygienists, and GS-905 attorneys,
employees who primarily ``support'' the main missions of NNSA, belonged
in the same career path as engineers and scientists, those who do the
pre-eminent mission work of NNSA. Further, it was not felt that GS-130
foreign affairs specialists, with their significantly
[[Page 72778]]
``non-technical'' knowledge base, albeit professional employees who
perform primary mission work, should be grouped in the same career path
as engineers and scientists. Similarly, such professional occupations
as GS-1102 contract specialist and GS-1515 operations research analyst
are to be included in NNSA's redesigned and expanded Professional,
Technical, and Administrative Career Path.
(3) Pay Rates
Comments: Some commenters pointed out that the pay rates associated
with NNSA's proposed pay bands were lesser in value than corresponding
pay rates found in the demonstration projects and alternative personnel
systems of other Federal agencies, or even in comparison with the pay
rates in NNSA's own excepted service system. Several commenters felt
this rendered NNSA uncompetitive in the labor market versus these other
systems, and several considered lower pay rates unfair and not
consistent with the principle of ``equal pay for equal work.''
Response: NNSA looked at two basic occupational questions in
considering these comments:
1. Historically, has NNSA been able to attract and retain critical
skills to carry out important work within the traditional GS grade and
pay structure?
2. Is NNSA losing employees to pay-banded agencies with enhanced
pay rates?
In looking at the first question, what NNSA found was that there is
no directly correlative data relating to ability ``to attract and
retain critical skills,'' but there is plenty of anecdotal information.
NNSA experiences instances of recruitment difficulty in two basic
circumstances, (1) when a local private employer successfully competes
for a top prospect by offering a higher starting salary than NNSA can,
and (2) at locations that are considered geographically isolated and
remote, and where top candidates are scarce. But despite these
instances, NNSA has not experienced a general pattern of recruitment
difficulty because NNSA's important national security work has an
intrinsic attraction to prospective candidates, and because NNSA makes
selective good use of Government-wide recruitment incentives. The
second question was answered through a straightforward analysis of the
data: NNSA is not losing current employees to any significant degree to
agencies with enhanced pay rates, such as to the National Security
Personnel System (NSPS) in the Department of Defense. In fact, during
the past two years, NNSA has gained 13 employees (not including senior
executives) from NSPS, while losing only 9 to NSPS.
Based on these findings, NNSA's initial approach to establishing
pay band pay rates is affirmed. NNSA remains committed to its
demonstration project principle to construct pay band thresholds and
boundaries, and associated pay rates, consistent with OPM's official
classification criteria and the Government's prevailing pay structure.
While the notion of pay rates in excess of the current rates
permissible under the traditional GS pay system is attractive to many
managers and employees, implementing enhanced pay rates on a broad
scale is not compelling now on the evidence in hand. Nor is NNSA
prepared at this time to undertake systematic occupational market
studies to validate the need for enhanced pay rates or to develop NNSA-
only position classification criteria and standards, which are
prerequisites to obtaining OPM's approval to institute enhanced pay
rates. However, we note that the demonstration project includes an
authority to establish special staffing supplements, in lieu of
locality payments, in order to increase pay when necessary to address
serious recruitment and retention difficulties associated with a
particular category of jobs.
(4) Pay Band Structures
Comments: Perhaps no other topic generated so many comments and
often conflicting opinions. Many commenters felt that NNSA's proposal
failed to live up to the project's goal to achieve greater parity with
NNSA's own excepted service pay-banded system, not only due to
differences in pay band pay rates but also due to differences in how GS
grades were to be bundled. Others took strong exception to the
differences in proposed pay-band structures for ``professional'' and
``administrative'' positions, feeling that because, in their opinions,
such work was of equivalent value to NNSA, it was unfair not to have
identical pay bands, while others took a contrary view, feeling that
engineers and scientists should not be in the same career path as other
professional and administrative occupations. Still others offered that
when NNSA proposed only single-grade pay bands (such as a GS-13 pay
band, a GS-14 pay band, and a GS-15 pay band in the proposed
``administrative'' career path), this defeated the purpose of pay
banding, that in fact it was not ``pay banding'' at all but just more
of the same bureaucratic classification practice. Some commenters
proposed their own pay band structures. Several commenters suggested
that NNSA establish supervisory pay bands with higher pay rates to
recognize the value of supervision and to incentivize the voluntary
movements of technical employees into leadership positions.
Response: NNSA found much to agree with in the many comments
received on this topic. These comments led NNSA to reconsider the
proposed pay-band structures, while recognizing that no matter what
NNSA did in response to comments, there was no practical way to
reconcile all viewpoints or satisfy everyone's concerns. Consequently,
NNSA revised some, though not all, of its earlier pay-band structures,
where the work and employee promotional patterns supported doing so.
NNSA agreed that the exercise of supervision compounds the complexities
and value of a position's work and should be recognized in some way.
NNSA is therefore adopting a supervisory bonus mechanism as part of its
performance policies.
In reconsidering NNSA's fundamental approach to pay bands, NNSA
weighed the various and often competing arguments, only to affirm in
the end the original approach. Upon closer study, NNSA found that lying
just beneath the surface of a seemingly attractive ``equity'' argument
on behalf of identical pay bands was the more powerful reality that all
work is not equivalent in grade value across occupations and
organizations, that in fact there can be meaningful differences in the
inherent level of work performed by professional and administrative
employees, and that fulfilling the principle of ``equal pay for
substantially equal work'' actually results in pay band structures that
reflect these meaningful differences. Positions attributable to a given
career path will have traditional grading patterns, and employee
recruitment and promotion patterns, in common with other positions in
the career path, but not in common with positions in other career
paths.
Consequently, NNSA not only revised its career paths but is
revising the attendant pay band structures, as follows:
I. Engineering and Scientific Career Path: Encompasses all
professional positions classified in the GS-0800 and GS-1300 job
series, subdivided into the following pay bands:
Pay Band I (GS-5 through GS-8)
Pay Band II (GS-9 through GS-11)
Pay Band III (GS-12/GS-13)
Pay Band IV (GS-14/GS-15)
II. Professional, Technical, and Administrative Career Path:
Encompasses all OPM-recognized professional occupations, except GS-
[[Page 72779]]
0800 engineers and GS-1300 scientists, requiring positive education
requirements, and all other subject-matter, business, and
administrative occupations characterized by a traditional two-grade
interval pattern of grade progression. All positions encompassed within
this career path are subdivided into the following pay bands:
Pay Band I (GS-5 through GS-8)
Pay Band II (GS-9 through GS-12)
Pay Band III (GS-13/GS-14)
Pay Band IV (GS-15)
III. Technician and Administrative Support Career Path:
Encompassing technician, secretarial, assistant, and clerical
occupations, and similar positions characterized by a traditional one-
grade interval pattern of grade progression. All positions encompassed
within this career path are subdivided into the following pay bands:
Pay Band I (GS-1 through GS-4)
Pay Band II (GS-5 through GS-8)
Pay Band III (GS-9)
IV. Nuclear Materials Couriers Career Path: Encompassing all
positions classified into the GS-084 job series, subdivided into the
following pay bands:
Pay Band I (GS-8 through GS-10)
Pay Band II (GS-11)
Pay Band III (GS-12)
Pay Band IV (GS-13)
V. Future Leaders Career Path: Encompassing the positions of all
interns enrolled in NNSA's 2-year Future Leaders Program, in various
engineering, scientific, professional, technical, and administrative
occupations. All positions encompassed within this career path are
subdivided into the following pay bands:
Pay Band I (GS-5 through GS-8)
Pay Band II (GS-9 through GS-11)
Pay Band III (GS-12/GS-13) \1\
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\1\ Although all Future Leaders will have career ladders to pay
band III in either the Engineering and Scientific Career Path, or
the Professional, Technical, and Administrative Career Path, a
control point equating to the salary of GS-12 step 10 will be
established for those Future Leaders with a Masters Degree in
business-related and administrative fields to enable these
individuals to be converted from band III of the Future Leaders
Career Path to band II of the Professional, Technical, and
Administrative Career Path upon successful completion of the 2-year
program.
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The arguments in favor of readjusting NNSA's original pay-band
proposals were several. (The only pay bands not altered from the
original are those associated with career path III.) The readjustment
in the Engineering and Scientific Career Path not only better reflects
the pre-eminent work done in NNSA by engineers and scientists, but is
more consistent with the actual promotional patterns found in the
demographics of the workforce. Most General Schedule engineers and
scientists in NNSA are either at GS-14, or GS-15, with development
patterns that often see GS-14 positions advance to GS-15 levels of
work. Such advancement occurs traditionally under both competitive and
noncompetitive promotional procedures, when such traditional job
factors as Guidelines, Complexity, Scope and Effect, and others, have
evolved under the weight of natural employee growth and maturation to
the highest levels creditable (e.g., levels 2-5, 3-5, 4-6, and so on)
under respective engineering and scientific standards and guides. In an
agency with highly technical national security missions and one-of-a-
kind nuclear weapons, nonproliferation, and naval reactor propulsion
programs, it is not surprising to find engineering and scientific
positions expanding in scope and responsibility due to recognizable
increases in technical job expertise and project authority, which so
often accrue to such positions over time. Out of 364 GS engineers and
scientists, there are 147 GS-14 and 148 GS-15 positions that are graded
in almost every case, including many classified supervisors, on their
paramount non-supervisory work assignments.
Similarly, agency program managers, agreeing with many of the
comments received on this subject, questioned the validity and
effectiveness of the separate single-grade ``bands'' at the GS-13, -14,
and -15 levels previously proposed for the now reconstituted
Professional, Technical, and Administrative Career Path. As NNSA looked
at the actual distributions of professional, subject-matter, and
administrative positions that would be covered within this broad career
path, as well as relevant employee promotional patterns, NNSA realized
that this path's pay-band structure also required adjusting. The new
pay-band patterns in this career path are more consistent with the
demographics of the actual workforce today; the majority of positions
found in this career path are graded at GS-13 and GS-14, about 640
encumbered positions at this writing. Combining GS-13 and -14 into band
III therefore makes better sense to NNSA than the original proposal
did, given the relationship between these two grades among the many
occupations covered by the career path. Generally, the main difference
in NNSA between GS-13 and GS-14 in actual classification practice is
that the Supervisory Controls and Guidelines factors are credited one
level higher at GS-14, the two factors most readily influenced by the
greater freedom from supervision and guidelines that invariably comes
to a position through seasoning, through greater maturity of judgment,
and through a derivatively more confident and authoritative incumbent
performance. Combining these two grades into a single pay band,
covering the majority of employees serving in positions in this
important career path, shifts the focus of employee pay advancement
from position classification and merit promotion criteria to
performance-based criteria, one of the chief goals of this
demonstration project. This shift in pre-eminence from classification
and promotion criteria to performance also occurs, of course, in the
examples of other pay bands in other occupational career paths, and
serves in the aggregate to underscore how pay-banding intrinsically
enhances the potential effectiveness of a performance-based pay system.
A review of actual promotional patterns supports combining GS-13
and -14 into one pay band. Of the 328 GS-14 employees serving in
occupations that will be covered by the Professional, Technical, and
Administrative Career Path, 80 were promoted from NNSA GS-13 positions
in the same occupational series and line of work.
With respect to the Nuclear Materials Couriers Career Path, NNSA's
Office of Human Capital Management Programs worked diligently with the
top managers from the Office Secure Transportation, the NNSA
organization in which the couriers are assigned, to arrive at a pay-
band pattern that better met both management's mission needs and
employee advancement expectations. In developing pay bands for the new
Future Leaders Career Path, the Future Leaders Program Manager was
heavily consulted.
(5) Comparisons With NNSA Excepted Service System Pay Bands
Comments: Many commenters questioned why NNSA proposed pay bands
for General Schedule engineering and scientific positions that did not
correspond to the pay band structure in NNSA's own excepted service
system, pointing out, in their opinions, that the work was identical.
Response: To understand the different pay band structures between
General Schedule and NNSA's excepted service system engineering and
scientific positions, the fundamental distinction between these two
systems must be understood. While it is true that many current excepted
service system engineers and scientists are former General Schedule
engineers and scientists, and that both General
[[Page 72780]]
Schedule and excepted service system employees can currently be found
working in the same facilities and offices, what needs to be kept in
mind when comparing the two systems is the very nature of the
authorities through which respective employees are appointed and paid.
The NNSA Act (P.L. 106-65, as amended) gives the Administrator the
authority to appoint employees to scientific and engineering positions
and to pay them without regard to title 5, United States Code, when the
Administrator deems it necessary to accomplish his statutory
responsibilities. By design, these positions are established in unusual
occupational circumstances (either extreme difficulty of work, or
extreme difficulty in recruitment), and do not represent the
engineering and scientific work common to many occupational settings in
NNSA. Furthermore, excepted service system employees in concept have
been held to a higher performance threshold (as befitting a
performance-based pay system) than their General Schedule counterparts,
which NNSA believes has resulted in an overall improvement in
excellence and mission accomplishment--the reason NNSA now seeks to
expand the applicability of pay-for-performance. At the same time,
these excepted service system employees do not possess traditional
civil service entitlements, such as ``career status,'' or certain
protections having to do with reduction in force and other employment
matters--a key design difference between the two systems. Although it
is true that NNSA could request that OPM approve pay rates exceeding
those traditionally associated with GS grades under the authority of
the demonstration project, as discussed in subsection C above, NNSA is
not now prepared to undertake systematic occupational market studies to
validate the need for enhanced pay rates or to develop NNSA-only
position classification criteria and standards.
(b) Excepted Service
Comments: There were other comments comparing the demonstration
project to NNSA's existing excepted service system, aside from concerns
relating to proposed pay bands and pay rates. A number of commenters
expressed the view that NNSA's current General Schedule employees be
permitted the opportunity to volunteer for the demonstration project,
just as General Schedule engineers and scientists had the opportunity
to volunteer to enter the NNSA excepted service system at the time of
its inception a few years ago. Similarly, others suggested that NNSA
provide an opportunity for current excepted service employees to
volunteer for the demonstration project, and in essence, volunteer out
of the excepted service system. There were various reasons given for
this latter suggestion. The absence of ``career status'' (and the
resulting inability to apply for many of NNSA's promotional
opportunities), and the absence of ``second-round'' RIF protections,
were mentioned. Also, some excepted service employees feel topped out
in terms of pay potential.
Response: Providing an opportunity to volunteer in or out of the
demonstration project, or the excepted service system for that matter,
is not tenable today. Because NNSA is experimenting with a pay-banding
and pay-for-performance system that, were it to be successful, would
replace entire segments of the General Schedule workforce, allowing
employees to volunteer to participate in the demonstration project
would be unwieldy to manage, impractical to administer, and, more
compelling, not in the best interest of efficient Government.
Furthermore, NNSA intends to continue to make full use of its unique
excepted service employment authority in those circumstances and for
those purposes that the NNSA Act envisions. From a practical
standpoint, excepted service employees who have not previously competed
for competitive appointment and who do not already have career status
will have to apply for demonstration project positions through an
appropriate appointing authority.
(c) Pay and Pay Pools
Comments: This was the other topical issue receiving many comments.
The most frequent pay comment, by far, had to do with the issue of
annual comparability pay increases, locality pay, and the effects of
performance on these annual pay events. NNSA had proposed one pay pool
from which general pay adjustments and performance-based pay increases
were to have been funded and paid out all at one time, and many
commenters felt the plan was unclear in describing the
interrelationships among these pay events. Other comments concerned (1)
the effects of budgetary constraints on the amounts and timing of
payouts; (2) the apparent lack of pay-setting guidelines with respect
to hiring new employees and promoting existing employees; (3) the
apparent lack of a financial incentive for an NNSA employee to be
reassigned to another NNSA job or location to fill a critical need; (4)
the pay implications of supervisory incompetence, caprice, or
favoritism in appraising employee performance; and (5) the effect of
pay banding on premium pay for overtime work for the courier workforce,
the payment of night differential for work performed beyond the first-
40-hour tour of duty, and other pay matters relating to the unique
irregular work schedules of the couriers.
Response: NNSA agrees that the original proposal was not as clearly
presented as it should have been, and furthermore, has reconsidered
certain mechanical features of its pay provisions, making several
changes to the plan accordingly. NNSA will establish two pay pools, one
from which to fund annual general pay adjustments and the second from
which to fund performance-based payouts. Each pay pool will have its
own payout schedule, though in close proximity to the end of the
calendar year and to each other. In conjunction with establishment of
two pay pools, NNSA is increasing the maximum number of shares for
performance payouts, from 3 shares to 4. NNSA is also changing the
share distribution pattern (number of shares linked to performance
level) from 3-2-1-0 to 4-3-2-1-0. An employee with a Significantly
Exceeds Expectation (level ``5'' performance under NNSA's performance
management program) may receive 3 or 4 shares, an employee with a Fully
Meets Expectations (level ``3'' performance under NNSA's performance
management program) rating and no critical element rate at the Needs
Improvement level may receive 1 or 2 shares, and all other employees
receive 0 shares. As under the original proposal, any increased
locality pay or staffing supplement percentages will be applied on top
of eligible employees' adjusted base rates outside of the pay pool
process.
Furthermore, NNSA will provide a limited flexibility to increase an
employee's pay upon accepting an intra-pay band reassignment. These
changes, along with NNSA's pay-setting guidelines, will be described in
detail in NNSA's Demonstration Project Policies and Procedures Manual,
which shall be published in accompaniment to this project plan. The
pay-setting guidelines will ensure that the use of demonstration
project pay flexibilities will be judicious and appropriate. NNSA's
administration of the demonstration project will be under OPM's
continuous oversight, with rigorous evaluations of pay-setting and
other project provisions and applications. Supervisors will be afforded
extensive training to ensure they have the competence to make fair
[[Page 72781]]
and valid employee appraisals, and they will be held accountable for
doing so during their own performance appraisals. As for the courier
workforce, pay banding will have no effect whatsoever on their tours of
duty, their administrative work schedules, or on their eligibility
under current law and regulation to receive premium pay, night
differentials, and other pay benefits and incentives.
(d) Position Classification
Comments: Several commenters wondered how upholding the use of
OPM's traditional position classification criteria and standards will
lend itself to streamlining the ``cumbersome, labor-intensive, and
difficult to comprehend'' system, as the project plan calls it. They
imply that part of the problem with the present system is just these
criteria and standards, and they don't see how NNSA will be able to
reduce documentation requirements, eliminate use of the Factor
Evaluation System format (which typically increases the length of
position descriptions threefold), or reduce traditional procedural
steps. Others wondered how NNSA's pay-banding system would safeguard
equal pay for equal work when a selecting official will be free to set
pay for a new appointee anywhere in a band. Some noted that current
employees might be penalized in comparison to a new hire's potential
for a pay increase, as pay increases for internal promotees are limited
to 8 percent, and this limitation may actually offer an employee less
money than customarily received when moving from one GS grade to the
next during a conventional promotion. Others were concerned about the
effect on an employee's existing promotion potential in a traditional
career-ladder position when converting to a pay-banded position, when
that potential falls outside the band of the position to which the
employee converts. One person asked what impact there would be on the
conversion to pay banding of a position currently graded outside the
proposed maximum band range of a given career path. Others were
concerned about the right of employees to appeal their placement into a
career path and pay band.
Response: The comments in this topical area, while more process
oriented than comments in other topical areas, underscore the need to
clarify just how position classification works in a pay-banding
environment. The comments, especially those about career ladders and
equal pay for equal work, warrant more discussion.
In general, OPM's position classification standards and guides
remain the single most concise and valuable analytical tools with
respect to defining occupations and evaluating assignments of white-
collar work, not only in the Federal sector, but in general. They
remain models for other levels of Government, and even private
industry, to emulate in developing their own local job-evaluation
schemes. OPM's standards and guides do not in themselves contribute to
the classification system's breakdown and inefficiency. Rather, it is
the towering emphasis today on compensation as a tool for attracting
and retaining the best talent in a hypercompetitive labor market that
has hammered the rigid grade-bound classification system into a
contorted and broken program. All the hammering has brought resistance,
inertia, and resignation among managers and classifiers alike. Pay
banding, in bundling several grades and pay rates together into one
band when appropriate, will go a long way to lift the deadly onus off
the classification program. But this is only the start of the
classification program's streamlining. There will be a number of
genuine and potentially significant opportunities under the
demonstration project to simplify the administration of the
classification program. Not delegating classification authority to
managers, as most other demonstration projects and alternative
personnel systems have done, is a significant simplification. Job
analysis is no less sophisticated than are most other technical
disciplines in the modern workplace. Efficient classification practice
requires substantial training and years of seasoning. NNSA believes
that it makes far better sense not to expend countless resources and
endless hours trying to train and encourage supervisors to become
seasoned classifiers, but rather, to hone their skills as leaders of
the men and women they supervise and to retain classification authority
and skills in the personnel office. Furthermore, there is nothing in
OPM's existing doctrines and requirements that will not permit the
simplification of position description formats or the synopsizing of
traditional evaluation documents. Add pay banding to the flexibility
that already exists, and there is a significant opportunity to
streamline. Pay banding can group two or more levels of traditional
work and associated pay rates into one pay band when appropriate,
thereby compressing expanses of work and pay rates into fewer
classification units and easing attendant classification practices and
protocols, with less documentation, particularly when future automation
comes on line.
It is true that successful streamlining doesn't happen by itself
and won't happen overnight. NNSA has considerable design and
development work to do in building an effective pay-banding
classification system, but not having to develop its own classification
standards and guides will contract NNSA's design and development
challenges immeasurably. This system will be built around demonstration
project career paths and will feature two unique concepts, the ``core
pay band descriptor'' and the ``core position description.'' A
descriptor is a generic benchmark description used to illustrate the
ranges of complementary work levels within a pay band. The assignment
of a specific position to a particular pay band will be made on the
basis of a core pay band descriptor. Core pay band descriptors will be
based on the OPM job family standard and functional classification
guide that most directly corresponds to the work encompassed within an
occupational series. A core position description is simply an
abbreviated benchmark description of a common set of core duties and
responsibilities typical of large numbers of positions within each
career path and pay band across NNSA's various organizational and
functional settings. NNSA will publish its pay-banding classification
policies in its companion document to this project plan, NNSA's
Demonstration Project Policies and Procedures Manual, and will
supplement these policies with handbook guidance as needed. This
guidance will more fully describe NNSA's streamlined pay-banding
classification system and will better describe the simplified position
description concept with samples. Briefings tailored to managers,
employees, and the personnel staff, respectively, will also be
developed to accompany the development of the system and application of
NNSA's classification policies.
The compressed occupational construct of a pay band renders
concerns about undermining the civil service system's classification
principles unfounded, as several gradations of work are possible within
a given pay band. In essence, pay banding assumes that different
employees in the same career path, job series, and pay band of a
properly classified position can operate at differing levels--within
reason--due to variations in incumbent maturity (seasoning), and
performance. In this circumstance, equal pay for substantially equal
work is not compromised, even though one
[[Page 72782]]
employee may be earning higher pay than another employee in the same
pay band. In a fundamental respect, this is really no different than
the disparities in pay that occur between employees in the same
properly classified GS-13 position where one employee is earning a GS-
13, step 2, rate and another is earning a GS-13, step 9, rate.
The 8 percent limitation on a pay increase as a result of internal
promotion is a standardized policy that will apply in most situations.
Most other pay-banding systems set similar controls on pay increases.
NNSA considered a higher percentage, and even considered a range of
percentages, from lower to higher, but decided on the fixed 8 percent
minimum increase to mitigate the opportunity for disparate employee
treatment at such an important career event. While NNSA expects most
internal promotion actions to adhere to this standard, like most rules,
there will be the flexibility to allow an exception, with proper
justification, and higher-management approval. This flexibility will be
described in detail in the staffing and pay policies that will be
published in accompaniment to this project plan.
There will continue to be ``career ladders'' under NNSA's pay-
banding system, though instead of grade intervals, there will be band
intervals. A ``laddered'' position is simply a position advertised
during recruitment at a certain level of full performance that is
filled through selection and appointment at a lower pay band. NNSA is
developing staffing policies that will ``grandfather'' employees who at
the time of conversion to the appropriate pay band have not reached
their promotion potential. These employees will be eligible for an in-
band pay increase similar to a promotion increase under the General
Schedule system until they reach their full promotion potential. ``Full
promotion potential'' is a traditional position classification and
personnel staffing concept that will continue to have validity under
NNSA's demonstration project, and it means the highest grade, or pay
band, of a career-ladder position for which an incumbent previously
competed under the Government's merit system principles and an agency's
merit promotion plan. Once an NNSA employee who converted to pay
banding under this demonstration project receives an in-band pay
increase or a promotion that takes him or her to a pay level equivalent
to the highest GS grade in the formerly applicable career ladder, the
employee will be considered to have reached the full performance level,
and the grandfather provision will cease to apply. Future in-band pay
increases for such an employee would then be based solely on
performance, consistent with all other demonstration project employees.
Of course, just as a GS employee is not guaranteed a career-ladder
promotion without the supervisor's certification, the promotions and
special grandfathered in-band increases for demonstration project
employees will not be guaranteed, and they will be issued new
performance plans with each pay increase. Only current NNSA employees
who convert at the inception of pay banding will be afforded the
benefit of having their career ladders grandfathered. The specific
terms and conditions of this benefit will be published in the policies
and procedures manual that will implement this project plan.
As NNSA prepares to implement the demonstration project, NNSA is
reviewing current position classification outcomes, and potential
discrepancies and inconsistencies, with the intent to correct any that
are found prior to implementation to assure a smooth conversion
process.
Under the demonstration project, employees retain their traditional
position classification appeal rights. A classification appeal is a
formal request by an employee in writing for a review of the official
job series, pay band, or pay system, of the employee's current position
to correct what the employee believes is an erroneous classification.
Any employee in a position covered by chapter 51 of 5 U.S.C., and by
NNSA's Demonstration Project, can file a classification appeal.
(e) Staffing
Comments: Most of the 17 staffing comments crossed over into other
topical areas already treated, such as the structure of relative pay
bands across career paths, and the impact of employee conversion to pay
banding on pre-existing promotion potential as a result of having
successfully competed for a career-ladder position. Other comments
concerned such issues as pay-setting and band and grade assignment upon
converting to a pay-banding position from a GS position, and vice
versa, upon converting back to GS from pay banding. Many commenters
pointed out that the language in the February 28 Federal Register
notice pertaining to such practical staffing and pay matters was vague.
One person expressed concern at the quality of applicants under pay
banding, should candidates only need to meet the minimum qualification
requirements associated with the lowest grade level in a multi-graded
band, and believed that the candidate screening process would suffer as
a result.
Response: It is understandable that many commenters found NNSA's
proposed project plan vague and unclear in parts. NNSA's demonstration
project plan, in both its proposed and final incarnations, is designed
to mainly answer the ``what'' of a matter, not the ``how.'' This is why
there have been many references in these responses, as well as
throughout the text of the project plan, to a policies and procedures
manual. But this response is not to dodge the issues. Most of the
comments received during the public comment period have been invaluable
in guiding NNSA's development of its companion policies and procedures.
By design, a demonstration project is an experiment. Frankly, there is
more than one way to execute and effect almost any feature of this
experiment, and though modeling previous successful experiments and
viable alternative personnel systems can be extremely useful, there are
still mechanical subtleties and finer points of interpretation in
matters of pay banding, staffing, and pay that NNSA must come to terms
with. Having said this, it can be said after the past 6 months of
rigorous development and refinement, that NNSA has gained competence
and sureness about how to effectively execute the innumerable features
and applications of this project. With respect to questions about
conversion, NNSA GS employees will be converted to the career path and
pay band that is equivalent to their current job series and grade,
irrespective of pre-existing promotion potential, as discussed in the
preceding subsection. In no case will an employee lose pay upon
conversion; in fact, at conversion, most employees will receive an
increase in pay reflecting the prorated value of their next scheduled
within-grade increase (WIGI) based on the amount of time they have
served in their respective waiting period.
The project plan gives NNSA authority to establish the rules
governing pay-setting for employees who convert out of the
demonstration project and move to a GS position. Those technical
conversion-out rules will be provided in NNSA's manual of implementing
policies and procedures and will be forwarded to other Federal agencies
should an NNSA pay-banded employee move to a GS position in another
agency. In general, demonstration project employees moving to a GS
position will be converted to a GS-equivalent grade and rate before
they leave the demonstration
[[Page 72783]]
project and thus will be treated as GS employees under GS pay-setting
rules.
NNSA is also developing staffing guidelines to aid managers,
selecting officials, and personnel office staff on processes to use in
evaluating candidate qualifications, and to identify the more qualified
candidates from among applicants. We expect that this will take time as
we train staff, develop operating procedures, and evaluate their
effectiveness. This will be true of most other operational features and
applications of the project. It will be some time following project
implementation and employee conversion before NNSA is proficient in
most demonstration project matters, though NNSA is taking great pains
and care to ensure that start-up and transition are implemented as
smoothly as possible.
(f) Performance Management
Comments: Most of the several comments received on performance
management concerned the adaptability of NNSA's existing performance
management program to the demonstration project. There were concerns
expressed about the timing of implementation--too soon--about the
readiness of NNSA's supervisors to fulfill their responsibilities to
appraise their subordinates fairly--not ready--about the subjectivity
of NNSA's four-level rating scheme--can't make distinctions--and so on.
A labor union suggested ways to improve NNSA's appraisal program.
Response: The project is scheduled to be implemented on March 16,
2008. Once implementation occurs, there will be complete instructions
on what to expect, and how to proceed, midway through the rating year
as it will be. As NNSA prepares to implement the demonstration project,
agency management holds many of the same reservations as did
commenters. When NNSA was established seven years ago as a separately
organized agency within DOE, NNSA inherited a variety of then existing
performance management programs, between headquarters and a multitude
of field offices. Four appraisal cycles ago, NNSA consolidated and
standardized all GS and equivalent appraisal programs into one. At the
onset of each new rating year since then, NNSA has made changes in its
program based on the lessons learned from the previous rating cycle. As
NNSA's program has evolved from year to year, it has been necessary to
conduct focus groups and supervisory training. This upcoming year,
during the transition to the demonstration project, will be no
exception. And NNSA thinks this is a good thing. It is doubtful there
would ever be an ideal time to embark on such a project. NNSA believes
waiting for such a time will be a precious opportunity lost. By design,
the demonstration project is an experiment. Many things are supposed
and anticipated, but few things are known for sure in advance. They
need to be tried and tested. This NNSA intends to do, realizing that it
is likely that there will continue to be a need for improvements in
design and execution for the next several years to come, not only
concerning the existing performance management program, but to the
demonstration project as a whole.
(g) Reduction in Force
Comments: There were several questions concerning the mechanics of
reduction in force (RIF) under the demonstration project, and the
impact on employee RIF entitlements. One person asked whether
demonstration project employees and excepted service employees would
compete together in a RIF. Another asked whether employee protections
would be lessened under the demonstration project. A third person asked
specifically whether there would be ``bumping'' rights.
Responses: Not only will there be bumping rights for demonstration
project employees, but all other traditional employee protections are
retained under the demonstration project. There is only one substantive
change from traditional rules, having to do with a further subdivision
of an NNSA competitive area by career path. Currently in NNSA, the
decision to undertake RIF is made by the Administrator, respective Site
Office Managers, the Service Center Director, and the heads of the
Naval Reactors Offices in Pittsburgh, PA, and Schenectady, NY.
Consequently, each of these management officials is considered to be
the head of a competitive area for RIF purposes. (The Administrator has
actually delegated the authority to take and direct personnel actions
to these officials, while retaining this authority for all headquarters
components, except Naval Reactors, which has a unique dual reporting
arrangement with the Secretaries of Energy and Navy.) What this means
from a practical management standpoint is that Site Offices, the
Service Center, and the Pittsburgh and Schenectady Naval Reactors
Offices are considered to be under separate administration for RIF
purposes, while the Administrator remains the head of the headquarters
competitive area. The existing competitive area standard in NNSA under
current Federal regulation, and DOE policy, is ``a subdivision of the
agency under separate administration within the local commuting area
[5CFR351.402].'' The concept of ``local commuting area'' further
defines the competitive area standard. Regulations permit agencies to
subdivide competitive areas according to commuting area, the geographic
proximity within which normal patterns of applicant recruitment and
worker commutation can be expected to occur, even when the management
official with the authority to take and direct personnel actions is
located elsewhere. This is what NNSA does currently, and this part
won't change under the demonstration project. Therefore, employees in
one NNSA competitive area would not now compete with employees in
another competitive area, nor would employees in different commuting
areas within the same competitive area compete with each other. Under
the demonstration project, NNSA will institute one additional
competitive area subdivision, by career path, so that the employees in
one career path would not compete with employees in another career path
in a given RIF. NNSA's non-demonstration project employees, such as
bargaining unit employees at headquarters, or all excepted service
employees, are not affected by this competitive area change. They
continue to be subject to traditional RIF rules, and applicable
collective bargaining agreements, and would not compete with
demonstration project employees in a given RIF.
(h) Employee Relations
Comments: The several comments in this topical area concerned
whether employees have the right of appeal, or to grieve, their
performance ratings, and whether employees whose ratings are less than
Fully Meets Expectations will have an opportunity to improve.
Response: The demonstration project has no direct bearing on NNSA's
performance management program, though the program continues to be
refined based on lessons learned from previous rating cycles. Under
NNSA's performance management policies, employees whose ratings are
less than Fully Meets Expectations are provided structured
opportunities to improve their performance. An employee who is
dissatisfied with an official rating can request a reconsideration,
under NNSA's policies and procedures.
(i) Employee Equity
Comments: Commenters generally felt that the demonstration project
will actually produce contrary results. Instead of encouraging workers
to
[[Page 72784]]
higher levels of excellence, it will actually discourage workers who
benefit now from the employment stability that the traditional civil
service system provides. They suggested that the net effect of basing
pay increases on performance will allow for faster pay progression in
the short-term, with the ultimate effect of increasing salary costs to
such a degree that there won't be sufficient funds to properly reward
employees in the future. Two persons agreed with basing pay increases
on performance, but had concerns about the equity of the process, and
disagreed that performance pay increases should be combined with the
annual comparability pay adjustment.
Response: NNSA shares some of these same concerns, and views these
concerns as challenges. Perhaps the biggest challenge the agency faces
is earning and keeping the trust of its employees during this time of
profound change, while ensuring that the demonstration project is not
perceived as a disincentive. Perhaps the next biggest challenge is
ensuring that supervisors are properly trained in their key
responsibilities under the demonstration project, and that they are
held accountable when they don't uphold these responsibilities. And two
other significant challenges are ensuring that there are adequate cost
controls in place, and that ample funds are appropriated to support
meaningful levels of performance-based pay increases. NNSA does not
minimize the significance of these challenges, but does not shrink from
them either.
As already discussed, NNSA is establishing two pay pools, and will
administer annual pay adjustments and performance-based pay increases
separately.
(j) Management Accountability
Comments: A uniform thread runs through the many comments submitted
on management accountability. Commenters expressed disbelief that
managers will be held accountable for not rendering objective and fair
performance ratings, and some said they have yet to see measures put in
place, or actions taken, to assure accountability. One person wanted to
know how OPM will oversee accountability and conduct ongoing
evaluations.
Response: Chapter 47 of title 5 requires an evaluation of the
results of each demonstration project and its impact on improving
public management. This project plan has been revised to include
additional details about the project evaluation. In addition, NNSA will
be held to scrutiny under DOE's human capital management accountability
regimen. Aside from these layers of oversight, NNSA is dedicated to
changing the management culture. One of the Administrator's highest
goals is to make NNSA an Employer of Choice. NNSA will encourage
openness between managers and employees, will provide extensive
training to supervisors, will institute a regimen of employee
communications, and will hold supervisors accountable through the
performance management process. Supervisors, like everyone else in
NNSA, will be held to higher standards.
(k) Other
Comments: The comments in this category did not fall neatly under
any other topic, and mainly reflected employee anxiety, or asked
extremely process-oriented questions that will be responded to via
other media. A general concern in various comments was the desire for
more specificity. In some cases, NNSA has made changes that provide
more specific information. (See section 4, ``Changes to Demonstration
Project Plan.'')
Two specific comments warrant NNSA's response: a letter from a
labor organization, and a thoughtful comment about the merit system
principles.
Response: The labor organization offered an extensive critique of
recent pay-for-performance initiatives in Government, and then offered
suggestions concerning NNSA's proposal. NNSA shares the union's deep
concern for the welfare of affected employees, and for advancing the
public's interest in protecting nuclear security. NNSA will consider
all suggestions for improving the demonstration project, and for making
it a success. Should NNSA decide to apply the demonstration project to
its bargaining unit employees in the future, it will honor its
collective bargaining obligations.
One person expressed concern that NNSA and OPM were not giving due
adherence to the statutory merit system principles [5 U.S.C. 2301]. We
disagree. As explained earlier, NNSA is relying on OPM's position
classification criteria and standards and is adhering to the
classification principle in 5 U.S.C. 5101(1) of ``equal pay for
substantially equal work,'' which is akin to the merit principle in 5
U.S.C. 2301(b)(3) of ``equal pay should be provided for work of equal
value.'' NNSA has a profound regard for the merit system principles and
has taken great pains in the design of this project to safeguard these
principles. We note that the merit principle in 5 U.S.C. 2301(b)(3)
also states that ``appropriate incentives and recognition should be
provided for excellence in performance.'' Thus, the performance-based
pay features of this demonstration project support this merit
principle.
4. Changes to Demonstration Project Plan
What follows is a list enumerating the substantive changes to
NNSA's demonstration project, and major textual changes to the plan.
The page numbers referenced are those found in the February 28, 2007,
Federal Register Notice. Some of the changes have been described in the
preceding responses to specific comments. Other changes provide
additional detail, provide clarification, or correct technical
problems.
(1) Page 9038: The Table of Content is revised to reflect the
addition of three new sections, III.A. 3., ``Position Classification
Appeals,'' III.D., ``Supervisory Bonuses'', and VII., ``Project
Modification.''
(2) Page 9039: The ``executive summary'' is rewritten to reflect
NNSA's final project goals.
(3) Page 9040: NNSA has decided to create separate pay pools for
comparability adjustments and performance payouts.
(4) Page 9041: August 2006 data is superseded with August 2007 data
in the table, ``Covered Employees by Occupational Series and Grade.''
(5) Page 9042: The design principles are rewritten to eliminate
ill-defined and inadequately developed principles.
(6) Page 9043: Career path and pay band structures are revised,
consistent with the NNSA's response herein under the ``pay band
structures'' subsection.
(7) Page 9043: A new section III.A.3., ``Position Classification
Appeals,'' is added.
(8) Page 9044: The pay increase preclusion for maximum rate
employees who receive less than an SEE performance rating is modified
to permit a 50 percent increase.
(9) Page 9044: A locality rate cap 5 percent higher than the
statutory pay cap is provided for top-rated performers in the upper
range extension.
(10) Page 9044: The section ``rate of basic pay upon promotion'' is
clarified.
(11) Page 9044: The date of performance-based pay adjustment is
changed to ``the first day of the last full pay period in each calendar
year.''
(12) Page 9044: The pay retention provisions in the section ``other
pay administration provisions'' are modified to provide 100 percent of
the annual comparability pay adjustment for up to
[[Page 72785]]
2 years for employees who are reduced in band through no fault of their
own.
(13) Page 9045: NNSA clarifies that it may request that OPM
establish a new staffing supplement for a category of NNSA employees.
(14) Page 9045: The performance-rating reconsideration process is
to be referenced, rather than stipulated, in the plan.
(15) Page 9046: There are to be two pay pools.
(16) Page 9046: The share distribution pattern (linked to levels of
performance) is revised to take into account the effect of the
establishment of separate pay pools for comparability adjustments and
performance payouts and to provide additional flexibility.
(17) Page 9046: The section ``pay adjustments'' is modified to
reflect the impact of establishing two pay pools, with staggered
payouts.
(18) Page 9047: The section ``employees who do not receive a pay
adjustment'' is modified to eliminate general references to employee
notification and redress procedures, which will be handled through
NNSA's own performance-rating reconsideration process.
(19) Page 9047: The mechanism for withholding a pay increase from
an employee who receives a less than fully Meets Expectations rating is
modified; in the unlikely event that an employee whose basic pay is
frozen as a result of a less than Fully Meets Expectations rating moves
to another demonstration project position with a different locality pay
schedule or staffing supplement, the employee's frozen base and
locality pay or staffing supplement would be adjusted in accordance
with NNSA's Demonstration Project Policies and Procedures Manual.
(20) Page 9047: A new section III.D., ``Supervisory Bonuses,'' is
added.
(21) Page 9048: A new section VII, ``Project Modification,'' is
added.
(22) Page 9049: Several changes are made and citations are added in
the ``waiver of laws and regulations required'' segments.
Linda M. Springer,
Director.
Table of Contents
I. Executive Summary
II. Introduction
A. Purposes and Approach
B. Problems with the Present System
C. Changes Required/Expected Benefits
D. Participating Organizations
E. Participating Employees
F. Project Design
III. Personnel System Changes
A. Pay Banding Classification and Pay System
1. Establishment of Career Paths and Pay Bands
2. Position Classification
3. Position Classification Appeals
4. Minimum Qualifications Requirements
5. Elimination of Fixed Steps
6. Rate Range
7. Rate of Basic Pay Upon Initial Appointment
8. Rate of Basic Pay upon Promotion
9. Rate of Basic Pay in Noncompetitive Lateral Actions
10. Other Pay Administration Provisions
11. Staffing Supplements
B. Performance Appraisal
1. Program Requirements
2. Supervisory Accountability
3. Reconsideration of Ratings
C. Performance-based Pay Increases
1. Pay Pools
2. Performance Shares
3. Performance Pay Increases
4. Employees Who Cannot Receive a Performance Pay Increase
D. Supervisory Bonuses
E. Reduction-in-Force
IV. Training
V. Conversion
A. Conversion to the Demonstration Project
B. Conversion to the General Schedule System
VI. Project Duration
VII. Project Modification
VIII. Project Evaluation
IX. Costs
X. Waiver of Laws and Regulations Required
A. Title 5, United States Code
B. Title 5, Code of Federal Regulations
I. Executive Summary
This project was designed by NNSA in consultation with OPM. The
goals of this demonstration project are to--
(1) Improve hiring by allowing NNSA to compete more effectively for
high quality employees through the judicious use of higher entry
salaries;
(2) Motivate and retain staff by providing faster pay progression
for high-performing employees;
(3) Improve the usefulness and responsiveness of the position
classification system to managers;
(4) Increase the efficiency of administering the position
classification system through a simplified pay-banded application of
the current General Schedule grade structure, and reduce the procedural
steps and documentation requirements traditionally associated with
classifying positions;
(5) Eliminate automatic pay increases (i.e., annual adjustments
that normally take effect the first day of the first pay period
beginning on or after January 1) by making pay increases performance-
sensitive, so that only Fully Successful (known as ``Fully Meets
Expectations'' in NNSA) and higher performers will receive pay
adjustments, and the best performers will receive the largest pay
adjustments;
(6) Integrate with, build upon, and advance the work of several key
human capital management improvement initiatives and projects currently
underway in NNSA, including--
a. Advancing the ongoing refinement of NNSA's four-year old
enterprise-wide performance management program, which currently
features a pilot for automating yearly performance ratings, to the next
logical level, encompassing performance-based pay adjustments,
b. Achieving greater parity, though not complete harmony, with
NNSA's mature excepted service pay-banded and pay-for-performance
system (e.g., will have lower pay band maximum rates; no automatic pay
increases, etc.),
c. Building on the simplified position description (PD) format and
automated PD library that are already in place,
d. Continuing to develop improved performance management skills
among first-line supervisors through increased program rigor,
additional training, and better guidance materials, to better develop
standards that reflect differences in performance,
e. Establishing a system of career-enhancing career paths for the
purpose of developing, advancing, and retaining employees,
f. Building on the new workforce analysis and planning system,
already in place to identify FTE needs and competency needs and skills
gaps, to conduct a valid occupational analysis to construct meaningful
pay bands.
The demonstration project will modify the General Schedule (GS)
classification and pay system by identifying several broad career
paths, establishing pay bands which may cover more than one grade in
each career path, eliminating longevity-based step progression, and
providing for annual pay adjustments based on performance. The proposed
project will test (1) the effectiveness of multi-grade pay bands in
recruiting, advancing, and retaining employees, and in reducing the
processing time and paperwork traditionally associated with classifying
positions at multiple grade levels, and (2) the application of
meaningful distinctions in levels of performance to the allocation of
annual pay increases.
II. Introduction
A. Purposes and Approach
The purposes of the proposed project are to--
(1) Modify the GS classification system by establishing pay bands
which may cover more than one grade; and
(2) Modify the GS pay system to provide larger annual pay increases
to employees who are better performers
[[Page 72786]]
based on performance distinctions made under a credible, strategically-
aligned performance appraisal system/program and thereby improve the
results-oriented performance culture within the organization.
NNSA's approach to achieving these purposes is to integrate with
and build upon the several ongoing human capital management initiatives
and projects that are already underway, and to design a GS pay banding
and performance-based pay adjustment system that--
(1) Complements and increases parity with the statutory NNSA
excepted service employment system already in place, and
(2) Profits from the successes, mistakes, and lessons of other
agency demonstration projects, past and current.
B. Problems With the Present System
Position Classification Rigidity, Incomprehensibility, and Procedural
Excesses
Although the GS classification system is not a compensation system
per se, the classification and pay systems are inextricably
intertwined. In practice, the GS classification system is the primary
determinant of an employee's basic pay. Furthermore, NNSA believes in
the principles underlying the GS classification system (i.e., equal pay
for substantially equal work, and variations in pay based on the work
actually performed, rather than on who performs the work) and believes
that these principles are as valid and applicable to the Federal civil
service system today as when originally enacted into law in 1923, and
when the General Schedule was established in 1949. As Ismar Baruch
wrote in a classic groundbreaking 1941 report, Position Classification
in the Public Service:
* * * the very nature of governmental jurisdictions places them
in a position of peculiar responsibility to the public at large.
Individual actions without plan or system and based merely upon the
expediency of the moment are undesirable. Public personnel policies
and transactions affecting positions and employees should be
supportable by facts and logic in the light of broad considerations
applicable to the service as a whole. Further, in the management of
public personnel affairs, considerations of fairness and equity
require uniform action under like circumstances, particularly in the
establishment of pay rates.
This in essence is what the Federal position classification system was
designed to achieve, and has achieved in principle, if not practice,
ever since these words were first written. Thus, rather than
``scrapping'' the current GS classification system and starting over,
NNSA believes that modifying the system to accommodate the work and
workforce of the 21st century is a more prudent and workable approach.
Pay banding does this. The current GS classification system is
cumbersome, labor intensive, and difficult to comprehend. As OPM's
April 2002 white paper, A Fresh Start for Federal Pay: The Case for
Modernization, points out, the GS classification system was designed
during the World War II years when civil servants were predominantly
``process-obsessed'' file clerks. Public servants in the middle of the
20th century performed work that tended to be mechanical and repetitive
in nature, consisting of job tasks readily observable and measurable.
Today, work tends to be knowledge-based and highly specialized, and
does not lend itself to easy categorization based on readily observable
characteristics. Nonetheless, as an employee progresses from the entry
level to the full-performance level in a given occupation today, under
the traditional classification system, a separate position description
is still required for each grade. For example, an entry level GS-5
Engineer with promotion potential to GS-12 requires five different
position descriptions (or statements of differences) covering grade
intervals GS-5, GS-7, GS-9, GS-11, and GS-12. Additionally, each
position description should be accompanied by a position evaluation
report certifying that the duties and responsibilities of the position
meet the requirements for classification into the series and grade.
Often, the difference between a higher-graded and lower-graded position
in the same career progression may be the level of supervision an
employee receives, or the increasing gradations in the scope and effect
of an employee's work on agency missions and programs, or some other
interpretative degree of occupational difficulty and responsibility. As
a result, managers who assign work and who are responsible for
describing such assignments of work, and the position classifiers who
evaluate assignments of work against OPM's and applicable agency
classification criteria, often view the practice attendant to the
current GS classification system as an exercise in semantics, and PD
writing, for the purpose of ``beating the system'' to award the highest
grade possible to a position, instead of as a management tool by which
to make meaningful and significant distinctions between levels of work.
The current GS classification system also directly impacts the
effectiveness of agency recruitment activities. Recruiting for a
vacancy which may be filled at any level from the entry level to the
full-performance level requires a separate position description for
each grade, separate qualifications requirements for each grade,
separate applicant assessment and rating tools (often referred to as
``crediting plans'') for each grade, and separate lists of best-
qualified candidates (often referred to as ``certificates'') for each
grade. For example, recruiting for a single GS-5/12 Engineer vacancy
requires five different position descriptions (GS-5, GS-7, GS-9, GS-11,
and GS-12) and five different ``crediting plans,'' and will result in
the agency issuing multiple ``certificates.'' Thus, Federal managers
and applicants for Federal employment often view the system as
cumbersome, time consuming, and unresponsive.
Modifying the current system to supplant sequential grade
progression with valid, rational, and credible pay bands will (1)
provide much needed management relief from the seeming arbitrariness,
rigidity, and document heaviness of the current classification system,
(2) provide managers with much needed flexibility, and (3) offer
applicants and employees greater opportunities for advancement and
inducements to retention, while retaining the public policy principles
and management values underlying the current civil service system.
A Need for Performance-Based Pay Increases
Additionally, the current GS pay system provides annual pay
increases to all employees, even those whose performance is less than
Fully Successful. Similarly, periodic within-grade pay increases are
virtually automatic. Although an employee's performance must be
determined to be at an ``acceptable level of competence'' in order for
the employee to receive a within-grade increase (WGI), this is only a
single-level threshold and no further distinctions in levels of
performance play a role. All performance levels above the threshold are
treated the same for purposes of determining the amount of the increase
and the rate at which an employee advances through the rate range of
his or her grade. NNSA and OPM do not believe it is a wise use of the
limited resources available for the compensation of Federal employees--
nor does it serve taxpayers effectively or treat employees fairly--to
pass on the same pay adjustments, year after year, to all employees
regardless of differences in their performance.
The current GS pay system does provide one limited tool to address
distinctions in levels of performance--
[[Page 72787]]
namely, quality step increases (QSIs). QSIs are discretionary
adjustments that are not integrated into the normal pay adjustment
process; thus, limited funds are available to provide QSIs, and the
decision-making process may not be very transparent. In addition, there
is no flexibility as to the amount of the QSI; a full step increase is
required. Also, QSIs may be used only for those with the highest rating
of record. In summary, QSIs alone cannot be relied upon to establish an
effective link between pay and performance based on meaningful
distinctions among different levels of performance.
Under these constraints of the GS pay system, agencies are severely
limited in their ability to establish a results-oriented performance
culture as contemplated under the Human Capital Assessment and
Accountability Framework (HCAAF). Within the HCAAF, a results-oriented
performance culture effectively plans, monitors, develops, rates, and
rewards employee performance, consistent with the merit system
principle that ``appropriate incentives and recognition should be
provided for excellence in performance'' (5 U.S.C. 2301(b)(3)).
C. Changes Required/Expected Benefits
The proposed demonstration project will respond to the GS
classification system problems identified above by compressing the 15
GS grades into pay bands that may cover multiple grades. Although this
``compression'' is neither designed nor intended to eliminate the
fundamental statutory grading distinctions embedded in the traditional
position classification system, it will considerably reduce the
excessive rigidity inherent in the current system, making it
substantially less cumbersome, less labor intensive, less time
consuming, and easier to comprehend and apply.
Importantly, banding the GS grade structure shifts the emphasis for
employee pay advancement from position classification factors and merit
promotion criteria to performance factors, one of the chief goals of
this demonstration project. Because a pay banding system uses broader
work levels, the system can be viewed as having more of a rank-in-
person emphasis; that is, it permits a more direct relationship between
an incumbent's actual (or anticipated) individual level of job
performance and a given position's particular level of pay.
By permitting the advancement of employees within given bands
without the necessity of advertising promotional opportunities, and
without the need for handling employee applications in accordance with
publicized merit promotion procedures, the attainment of some of the
project's process simplification and streamlining objectives is also
furthered.
The proposed demonstration project will respond to the pay problem
identified above by eliminating fixed steps within each of the pay
bands and by making annual GS pay adjustments performance-sensitive.
Pay adjustments will be funded from two pay pools: One consisting of
the amount that would otherwise be used to pay the annual GS pay
adjustment, and the second consisting of the amounts that would
otherwise be used to pay WGIs and QSIs to employees covered by the
demonstration project. The second pay pool also may include funds saved
through the elimination of promotion increases for promotions between
grades that are consolidated into the same band. A share mechanism will
be used to allocate pay increases among employees with different levels
of performance, and managers will be expected to control costs (and
will be held accountable for doing so in their own performance plans).
Implementation of the proposed pay system will result in larger pay
increases going to employees who demonstrate higher performance. By
regularly rewarding better performance with better pay, participating
organizations will strengthen their results-oriented performance
cultures. Among other things, they will be better able to retain their
good performers and recruit new ones.
D. Participating Organizations
It is expected that every major headquarters and field organization
in NNSA will participate. This includes HQ, program, and support
components, including NNSA's cadre of nuclear materials couriers, who
are deployed at various locations in the United States, eight
geographically dispersed Site Offices and two special purpose Naval
Reactors Offices (in Pittsburgh, PA, and Schenectady, NY), and the
Service Center in Albuquerque, NM. Each of these units is committed to
operating a credible, robust performance appraisal program aligned to
the organization's strategic goals and objectives, by providing the
necessary training and resources. These organizations have demonstrated
this commitment the past three years, as NNSA implemented a
comprehensive performance management program enterprise-wide.
E. Participating Employees
The demonstration project will cover all GS non-bargaining unit
employees in the participating organizations identified in the
preceding paragraph. (The only bargaining unit in NNSA is at
headquarters, and currently includes 16 positions.) Included in the
coverage are Schedule A and B Excepted Service employees. Not included
are Schedule C Excepted Service employees and Excepted Service
employees authorized under the NNSA Act, National Defense Authorization
Acts, and the DOE Organization Act. Table 1 shows the number of
employees available through September 2007 who are subject to coverage
under this project by occupational series and grade.
[[Page 72788]]
Table 1.--Covered Employees by Occupational Series and Grade
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
GS Grade
OCC Series --------------------------------------------------------------------------------------------------------------------------------------- GS total
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
00018....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 7 3 ....... 11
00028....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 1 3 ....... 2 7
00080....................................... ....... ....... ....... ....... ....... ....... 1 ....... 6 ....... 3 36 30 40 12 128
00084....................................... ....... ....... ....... ....... ....... ....... ....... 30 54 80 66 52 22 ....... ....... 304
00086....................................... ....... ....... ....... ....... ....... 2 2 ....... ....... ....... ....... ....... ....... ....... ....... 4
00099....................................... ....... ....... ....... 1 ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1
00130....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 3 4 14 40 43 104
00132....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 3 5 2 ....... 10
00201....................................... ....... ....... ....... ....... ....... ....... 1 ....... 2 ....... 2 7 19 9 7 47
00203....................................... ....... ....... ....... ....... ....... 1 6 1 ....... ....... ....... ....... ....... ....... ....... 8
00260....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 3 1 ....... 5
00299....................................... ....... ....... ....... ....... 1 ....... 2 ....... ....... ....... ....... ....... ....... ....... ....... 3
00301....................................... ....... ....... ....... ....... ....... ....... 3 ....... 24 ....... 39 41 49 29 26 211
00303....................................... 4 5 4 10 3 14 22 6 ....... ....... ....... ....... ....... ....... ....... 68
00318....................................... ....... ....... ....... ....... 2 10 10 5 2 ....... ....... ....... ....... ....... ....... 29
00326....................................... ....... ....... 2 5 ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 7
00335....................................... ....... ....... ....... ....... ....... 1 ....... ....... ....... ....... ....... ....... ....... ....... ....... 1
00340....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 20 21
00341....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 1 2
00342....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 2 ....... ....... ....... 2
00343....................................... ....... ....... ....... ....... ....... ....... ....... ....... 5 ....... 6 21 36 49 30 147
00344....................................... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... ....... ....... ....... ....... ....... 1
00346....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 2 3 3 ....... 8
00361....................................... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... ....... ....... ....... ....... ....... 1
00391....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... 1
00399....................................... ....... ....... 1 2 ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 3
00401....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... 1
00501....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 4 3 3 1 12
00505....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 3 3
00510....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 10 15 22 3 51
00511....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 4 ....... 1 ....... 6
00525....................................... ....... ....... ....... ....... ....... 1 ....... 1 ....... ....... ....... ....... ....... ....... ....... 2
00560....................................... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... 1 9 15 18 7 51
00561....................................... ....... ....... ....... ....... ....... ....... 1 ....... ....... ....... ....... ....... ....... ....... ....... 1
00599....................................... ....... ....... ....... ....... 2 ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 2
00610....................................... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... 1 ....... ....... ....... ....... 2
00671....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... 1
00690....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 2 2 ....... 4
00801....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 6 26 91 82 205
00802....................................... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... 1 ....... 1 ....... ....... 3
00803....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 2 ....... 2
00804....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 2 ....... 3
00810....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 2 ....... ....... 3
00819....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 3 1 ....... 4
00830....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... ....... ....... 1
00840....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 2 3 10 14 35 64
00850....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... 1
00854....................................... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... 2 4 1 2 10
00905....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 3 8 14 26
00950....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 3 ....... ....... ....... ....... 3
00986....................................... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... ....... ....... ....... ....... ....... 1
00999....................................... ....... ....... ....... ....... ....... ....... 2 ....... ....... ....... ....... ....... ....... ....... ....... 2
01035....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... 5 1 7
[[Page 72789]]
01082....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... ....... 1
01099....................................... ....... ....... 1 ....... 1 ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 2
01101....................................... ....... ....... ....... ....... ....... ....... 1 ....... 2 ....... 1 1 5 5 3 18
01102....................................... ....... ....... ....... ....... ....... ....... ....... ....... 6 ....... ....... 13 29 36 15 99
01103....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 3 4 1 2 ....... 10
01106....................................... ....... ....... ....... ....... ....... ....... 1 ....... ....... ....... ....... ....... ....... ....... ....... 1
01150....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... 1
01170....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... 1 1 1 4
01176....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... 1
01199....................................... ....... ....... 1 1 ....... ....... 1 ....... 1 ....... ....... ....... ....... ....... ....... 4
01222....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... 2 1 4
01301....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 5 33 26 64
01306....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 3 ....... 4
01310....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 3 3
01412....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... 1
01515....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... 1
01712....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 11 10 4 ....... 25
01750....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... ....... 1
01910....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 6 5 1 1 14
02003....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... 1
02010....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... 1 ....... 2
02101....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 4 15 6 25
02130....................................... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... 9 1 ....... 10
02210....................................... ....... ....... ....... ....... ....... ....... ....... ....... 1 ....... 2 2 15 13 2 35
---------------------------------------------------------------------------------------------------------------------------------------------------
Grand Total............................. 4 5 9 19 9 29 53 46 107 80 141 251 368 468 347 1936
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 72790]]
Management has provided initial notice to affected employees and
will continue consultation throughout project implementation.
F. Project Design
The project is designed to (1) fundamentally simplify the position
classification system as the key to improving recruitment, retention,
and classification activities, (2) ensure that no participating
employee with a rating of record of less than Fully Meets Expectations
will receive a pay increase, and (3) ensure that funds available for
pay adjustments will be allocated on the basis of performance, the
better performers receiving the greater performance payouts.
To ensure expeditious and effective project implementation and
completion, NNSA will model, to the extent feasible and appropriate,
programmatic features and operating systems and procedures relating to
NNSA's own pay-banded, pay-for-performance excepted service system; in
addition, NNSA will review the successes, mistakes, and lessons from
the experiences of other agency demonstration projects, notably the
current Department of Defense (DoD) laboratory projects, which are
based on the foundational China Lake project; the National Institute of
Standards and Technology permanent Alternative Personnel System; and
DoD's new National Security Personnel System (one of the participating
Air Force labs shares Kirtland AFB with NNSA).
Two basic design principles will underpin this project:
NNSA will not establish its own classification standards,
but rather, will construct band thresholds and boundaries consistent
with OPM's official classification criteria. To streamline
documentation, NNSA will establish core pay band descriptors and core
position descriptions based on the OPM job family standard and
functional classification guide that most directly corresponds to the
work encompassed within an occupational series. The descriptor is a
generic benchmark description used to illustrate the ranges of
complementary work levels within a pay band. The assignment of
positions to pay bands will be made on the basis of the core pay band
descriptor.
NNSA will not delegate classification authority to
managers. NNSA understands that not delegating classification authority
runs counter to the experiences of other agency demonstration projects.
Nonetheless, it is much more efficient to leave the exercise of this
authority and all attendant administration activities in the trained
hands of the resident human resources (HR) staff. NNSA sees little
value in turning managers into classifiers, but rather, believes the
value is in preparing managers to become better supervisors. NNSA's
pre-eminent managerial goal is to develop a seasoned cadre of Federal
managers who can practice the art of supervision at an uncommonly high
level (i.e., the supervisor who is more mentor than taskmaster, who can
nurture subordinates and unleash their potential for superior
performance through the instruments of performance appraisal and reward
programs).
III. Personnel System Changes
The 15-grade GS position classification system established under 5
U.S.C. chapter 51 and the GS pay system established under 5 U.S.C.
chapter 53, subchapter III, will be modified as described in the
following sections. Except as otherwise provided in this plan,
demonstration project employees will be considered to be GS employees
in applying other laws, regulations, and policies. NNSA does not
currently have employees covered by law enforcement officer (LEO)
special base rates. Should any law enforcement officers be covered by
this demonstration project in the future, they will not be considered
to be General Schedule employees for the purposes of applying LEO
special base rates authorized by section 403 of the Federal Employees
Pay Comparability Act of 1990; a separate career path would be
established for these employees, and band ranges for any such LEOs will
take LEO special base rates into account.
A. Pay Banding Classification and Pay System
1. Establishment of Career Paths and Pay Bands
NNSA may establish, and adjust over time, career paths that group
one or more occupational categories together and provide a common
banding structure (i.e., set of work levels and rate ranges) for
occupations within a given career path. Initially, NNSA intends to
establish five career paths.
Each career path will be subdivided into pay bands. Each pay band
will correspond to one or more GS grades. NNSA may establish, and
adjust over time, a career path's pay band structure.
NNSA's initial career path and pay bands are:
(1) Engineering and Scientific Career Path: Encompasses all
professional positions (with the exception of professional positions in
the Future Leaders Career Path) classified in the GS-800 and GS-1300
job series, subdivided into the following pay bands:
Pay Band I (GS-5 through GS-8)
Pay Band II (GS-9 through GS-11)
Pay Band III (GS-12/GS-13)
Pay Band IV (GS-14/GS-15)
(2) Professional, Technical, and Administrative Career Path:
Encompasses all OPM-recognized two-grade interval occupations, except
GS-800 engineers and GS-1300 scientists. All positions in this career
path are subdivided into the following pay bands:
Pay Band I (GS-5 through GS-8)
Pay Band II (GS-9 through GS-12)
Pay Band III (GS-13/GS-14)
Pay Band IV (GS-15)
(3) Technician and Administrative Support Career Path: Encompasses
all OPM-recognized one-grade interval occupations, excepting positions
classified in the GS-084 Courier series (see below). All positions in
this career path are subdivided into the following pay bands:
Pay Band I (GS-1 through GS-4)
Pay Band II (GS-5 through GS-8)
Pay Band III (GS-9)
(4) Nuclear Materials Couriers Career Path: Encompasses all
positions classified into the GS-084 job series, subdivided into the
following pay bands:
Pay Band I (GS-8 through GS-10)
Pay Band II (GS-11)
Pay Band III (GS-12)
Pay Band IV (GS-13)
(5) Future Leaders Career Path: Encompasses the positions of all
interns enrolled in NNSA's 2-year Future Leader Program, in various
engineering, scientific, business, and administrative occupations. All
positions in this career path are subdivided into the following pay
bands:
Pay Band I (GS-5 through GS-8)
Pay Band II (GS-9 through GS-11)
Pay Band III (GS-12/GS-13) \2\
---------------------------------------------------------------------------
\2\ Although all Future Leaders will have career ladders to pay
band III in either the Engineering and Scientific Career Path, or
the Professional, Technical, and Administrative Career Path, a
control point equating to the salary of GS-12 step 10 will be
established for those Future Leaders with a Masters Degree in
business-related and administrative fields to enable these
individuals to be converted from band III of the Future Leaders
Career Path to band II of the Professional, Technical, and
Administrative Career Path upon successful completion of the 2-year
program.
---------------------------------------------------------------------------
NNSA will coordinate changes in career paths or pay banding
structures with OPM. After coordination with OPM, NNSA will give
affected employees advance notice and an opportunity to comment before
effecting a change with respect to career paths or banding structure.
[[Page 72791]]
2. Position Classification
Application of the 15-grade GS position classification system
established under 5 U.S.C. chapter 51 will be simplified by allowing a
position to be assigned to a specific pay band if the duties and
responsibilities of the position meet (or exceed) the requirements for
classification into the lowest grade included in that specific pay
band. For example, an 801, Engineer, position assigned to Pay Band 1
(GS-5 through GS-8), need only meet the requirements for classification
at the GS-5 level. Position descriptions will include examples of
higher-level duties and responsibilities to which employees are fully
intended to progress. NNSA will establish pay band boundaries
consistent with OPM's existing position classification standards,
grade-evaluation criteria, and grading practices.
3. Position Classification Appeals
An individual employee may request that NNSA or OPM reconsider the
classification (i.e., pay system, occupational series, official title,
or pay band) of his or her official position of record at any time,
consistent with procedures currently prescribed under 5 CFR part 511,
subpart F. A full description of the classification appeals process for
the NNSA demonstration project will be included in the Demonstration
Project Policies and Procedures Manual that will accompany this project
plan.
4. Minimum Qualifications Requirements
Application of the OPM Operating Manual: Qualification Standards
for General Schedule Positions is simplified by allowing a candidate to
qualify for a specific pay band if the candidate meets (or exceeds) the
requirements for the lowest grade included in that specific pay band.
For example, a candidate for an 801 Engineer position assigned to Pay
Band 1 (GS-5 through GS-8), need only meet the qualifications
requirements for a GS-801 Engineer position at the GS-5 level.
For NNSA demonstration project employees and employees of other
Federal agencies who are in sufficiently similar pay banding systems,
the common OPM requirement of one year of experience ``at the next
lower grade in the normal line of progression for the occupation'' is
changed to ``at the next lower pay band in the normal line of
progression for the occupation.''
Federal employees in the General Schedule pay system, Federal
employees in other pay systems comparable to the General Schedule, and
non-Federal applicants must meet the common OPM requirement of one year
of experience ``at the next lower grade in the normal line of
progression for the occupation.''
5. Elimination of Fixed Steps
The 10 fixed steps of each GS grade will not apply to employees
participating in the demonstration project. The fixed-step system was
designed to reward longevity. A pay banding system is an important
element of any effort to make pay more performance-sensitive. No
employee's pay will be reduced as a result of becoming covered by the
demonstration project. However, demonstration project employees will no
longer receive longevity-based within-grade pay increases at prescribed
intervals. Instead, they will be granted annual performance adjustments
as described in section III.C. below.
6. Rate Range
The normal minimum and maximum rates of the rate range for each pay
band will equal the applicable step 1 rate and step 10 rate,
respectively, for the lowest and highest grades, respectively, in the
General Schedule that are included in the pay band. The minimum rate of
the pay band is extended 5 percent below the normal minimum for
employees with a rating of record below Fully Meets Expectations (FME).
Such an employee's rate may fall below the normal pay band minimum when
that minimum increases as a result of a pay band adjustment, but the
employee cannot receive a pay adjustment, or performance pay increase,
because the employee's rating of record is below Fully Meets
Expectations, as described in section III.C.4.
The maximum rate of each pay band is extended 5 percent above the
normal maximum for all employees with a rating of record at the highest
level (currently called ``Significantly Exceeds Expectations'' (SEE) in
NNSA). This upper range extension will help ensure that the range of
available pay rates will be adequate to recognize truly outstanding
performance. The upper range extension is reserved for employees with a
SEE rating. If an employee in the upper range extension is rated below
the SEE level, special provisions apply, as described in section
III.A.10.
In addition to rates of basic pay, employees may receive locality
payments or staffing supplements as described in section III.A.10 or
III.A.11, respectively.
7. Rate of Basic Pay Upon Initial Appointment
Upon appointment to a demonstration project position under
Delegated Examining, Direct-Hire Authorization, or other authority
primarily designed for initial entry into the Federal service (e.g.,
Veterans Employment Opportunity Act, 30% Disabled Veteran Appointment),
an appointee's pay rate may be set at any rate within the normal pay
band range. In exercising this flexibility, NNSA will consider the
appointee's qualifications, competing job offers, NNSA's need for the
appointee's talents, the appointee's potential contributions to NNSA
mission accomplishment, and the rates received by on-board employees.
This flexibility will allow NNSA to compete more effectively with
private industry for the best talent available, though managers will be
expected to use this flexibility with great judiciousness and prudence.
8. Rate of Basic Pay Upon Promotion
Upon promotion to a higher pay band, an appointee's pay rate
generally will be set at a rate within the normal pay band range to
which the appointee is being promoted that provides a pay increase of 8
percent, unless a greater increase is necessary to set pay at the
normal range minimum. NNSA may establish exceptions to this policy to
deal with employees receiving a retained rate, employees who are re-
promoted shortly after a demotion, employees with exceptional
performance warranting a larger increase with higher management
approval, etc. In exercising this flexibility, NNSA will consider the
appointee's qualifications, competing job offers, NNSA's need for the
appointee's talents, and the appointee's potential contributions to
NNSA mission accomplishment. A demonstration project employee who moves
to a higher pay band (defined as a pay band with a maximum base rate
for the normal range that is higher than the maximum rate of the normal
range of the employee's pay band before the move) in a different career
path is considered to have been promoted under policies prescribed by
NNSA. NNSA may adopt policies providing a promotion-equivalent increase
to a Federal employee outside the demonstration project who is
selected, through merit promotion plan procedures, to fill a higher-
level position (as defined in NNSA policies) covered by the
demonstration project.
NNSA employees, who at the time of conversion into the
demonstration project are in a career ladder to a higher
[[Page 72792]]
GS grade (i.e., have not reached the top level of that career ladder),
will be eligible for special in-band pay increases under the authority
of this demonstration project. The in-band pay increases will be
sufficient to ensure that an employee's base rate under the
demonstration project is equivalent to the base rate which the employee
would have received had the employee and position remained in the
General Schedule. Only one in-band pay increase may be received in a
52-week period. This ``grandfathering'' benefit will cease to be
applicable when the employee reaches equivalence with the top GS grade
of the formerly applicable career ladder. Only current NNSA employees
who convert at the inception of pay banding will be afforded this
``grandfathering'' benefit. The specific terms and conditions of this
benefit will be established by NNSA in NNSA's Demonstration Project
Policies and Procedures Manual that will implement this project plan.
NNSA may establish special rules for computing the promotion
increase for promotions involving positions covered by a staffing
supplement that take into account the staffing supplement and locality
pay, subject to guidance provided by OPM.
9. Rate of Basic Pay in Competitive and Noncompetitive Lateral Actions
When a non-demonstration project employee from NNSA or DOE is
reassigned into a demonstration project position, NNSA may provide an
immediate increase in the rate of basic pay to reflect the prorated
value of the employee's next scheduled within-grade increase or similar
within-range adjustment under the former pay system, consistent with
the requirements in section V.A. Similarly, when an employee transfers
into NNSA from another Federal agency, NNSA may provide an immediate
increase in the rate of basic pay to reflect the prorated value of the
employee's next scheduled within-grade increase or similar within-range
adjustment, also consistent with section V.A. When a demonstration
project employee is selected through competitive procedures to fill
another demonstration project position that is at the same pay band as
the employee's current position, or has no greater pay potential, NNSA
may provide an immediate pay increase up to 5 percent upon
reassignment. The increase to pay must be based on a review of the
employee's current salary, salary history, performance evaluations, and
qualifications. Justification and review requirements for such an
increase will be reflected in the staffing and pay-setting policies
found in NNSA's Demonstration Project Policies and Procedures Manual.
10. Other Pay Administration Provisions
Performance-based pay increases described in section III.C will be
made to the scheduled annual rate of pay. These increases will be made
on the first day of the last full pay period in each calendar year.
Annual general pay adjustments will be effective on the first day of
the first full pay period in January of each year.
Locality-based comparability payments under 5 U.S.C. 5304 will be
paid on top of the scheduled annual rate of pay in the same manner as
those payments apply to other GS employees (except as described in the
following paragraph). Staffing supplements may apply as described in
section III.A.11.
A locality rate cap 5 percent higher than the normal EX-IV
statutory cap is established to accommodate those employees in the
upper rate range extension, whose current rating of record is SEE. This
higher cap will only apply to employees whose pay rate is in the upper
range extension. If the locality rate for an employee at the normal
band maximum is affected by the EX-IV cap, resulting in an ``effective
locality pay percentage'' that is less than the regular locality pay
percentage, the locality rate for an employee in the upper rate range
extension of the same band will be computed using that same effective
locality pay percentage. (For example, if the regular locality pay
percentage is 30 percent, but the EX-IV cap causes the amount of
locality pay actually received by an employee at the regular band
maximum to be 20 percent, that effective locality pay percentage of 20
percent would be used to compute locality pay for an employee in the
upper range extension of the same band.)
If an employee in the upper range extension receives a Fully Meets
Expectations (FME) annual rating of record following the previous
year's SEE rating, the employee will be converted to a retained rate
status and will receive 50 percent of the increase in the adjusted rate
for the normal range maximum (including any applicable locality payment
or staffing supplement). The employee will receive the 50 percent
adjustment each year he or she receives an FME rating of record until
the employee's pay falls at or below the normal maximum rate of the pay
band.
Employees receiving a rating of record below Fully Meets
Expectations are prohibited from receiving any increase in basic pay
including any annual adjustment in the scheduled rate of pay, locality
pay, or staffing supplement, except as necessary to prevent their
frozen rate from falling below the 5 percent threshold of the lower
band extension. A frozen rate of pay does not result in a reduction in
pay and therefore is not subject to adverse action procedures in
chapter 75 of title 5, United States Code. In no case may an employee's
rate of basic pay fall below the 5 percent lower band extension. If an
employee's frozen rate of pay falls below the bottom threshold of the
lower range extension, it will be adjusted by the dollar amount of the
annual adjustment in the scheduled rate of pay necessary to bring their
adjusted frozen rate back within the lower extended range. NNSA's
Demonstration Project Policies and Procedures Manual will address how a
frozen locality payment or staffing supplement will be adjusted if an
employee moves to a demonstration project position with a different
locality pay schedule or staffing supplement.
When an employee receives a rating of record below Fully Meets
Expectations, their existing rate of basic pay including any applicable
locality pay or staffing supplement is frozen until they receive a new
rating of record of Fully Meets Expectations. If NNSA chooses to give
such an employee a new rating of record of FME before the end of the
current appraisal period, the employee is entitled to an increase in
the rate of basic pay effective on the first day of the first pay
period beginning on or after the date the new rating is final, as
described in section III.C.4.
Subject to guidance provided by OPM, NNSA will establish
supplemental pay administration rules for determining an employee's
rate of pay upon initial appointment, promotion, demotion, transfer,
reassignment, or other position change, as needed. In addressing
geographic conversions and simultaneous pay actions, such rules must be
consistent with 5 CFR 531.205 and 5 CFR 531.206, respectively.
The grade retention provisions in 5 U.S.C. 5362 and 5 CFR part 536
are not applicable (i.e., no band retention). The pay retention rules
in 5 U.S.C. 5363 and 5 CFR part 536 apply to demonstration project
employees, subject to the following exceptions:
(1) Enhanced pay retention (as described in the next paragraph)
applies to an employee who is entitled to a retained rate as a result
of an involuntary reduction in band through no fault of his or her own;
(2) An employee with a rating of record below Fully Meets
Expectations
[[Page 72793]]
may not receive an increase in his or her retained rate under 5 U.S.C.
5363(b)(2)(B);
(3) An employee in the upper range extension who is rated below
Significantly Exceeds Expectations will be converted to a retained rate
before processing any other pay action;
(4) The cap on retained rates is equal to the rate for level IV of
the Executive Schedule plus 5 percent (instead of the EX-IV cap
established under 5 CFR 536.306) in order to accommodate employees in
the upper range extension whose rating of record falls below SEE; and
(5) The range maximum rate used in computing retained rate
adjustments will always be the applicable adjusted rate for the normal
range maximum (including any applicability locality payment or staffing
supplement), not the upper range extension maximum, regardless of the
employee's rating of record.
Enhanced pay retention applies to employees who become entitled to
a retained rate as a result of an involuntary reduction in band under
conditions that would have met the requirements for grade retention if
the employee were covered by 5 CFR 536.201-536.202. Under enhanced pay
retention, an employee's retained rate will be determined as prescribed
in 5 CFR 536.304. However, an employee's retained rate will be
increased by 100 percent (instead of 50 percent) of the dollar amount
of any increase in the normal maximum rate of the employee's band
during the 2-year (i.e., 104-week) period beginning on the date the
employee's retained rate is established. After the 2-year period of
enhanced pay retention, the regular 50-percent adjustment rule in 5
U.S.C. 5363(b)(2)(B) and 5 CFR 536.305 will apply, as modified by the
provisions in this section. The 50-percent adjustment rule will be
applied by measuring the dollar change in the applicable adjusted rate
for the normal maximum rate of the band (linked to applicable GS step
10 rate).
If an employee is receiving a retained rate that is less than the
applicable adjusted maximum rate (including any applicable locality
payment or staffing supplement) for the upper range extension for the
employee's band, and if that employee receives a rating of record of
Significantly Exceeds Expectations, the employee's retained rate will
be terminated and converted to an equal adjusted rate (base rate in
upper range extension plus applicable locality payment or staffing
supplement). This conversion must be processed before any other pay
adjustment.
For a retained rate employee with a rating of record of
Significantly Exceeds Expectations, if a retained rate adjustment
provided at the time of a range adjustment results in the retained rate
falling below the applicable adjusted rate for the upper range
extension maximum, the employee's retained rate will be terminated, and
the employee's pay will be set at the maximum rate of the upper range
extension.
For a retained rate employee with a rating of record of Fully Meets
Expectations, if a retained rate increase provided at the time of a
range adjustment results in the retained rate falling below the
applicable adjusted rate for the normal band maximum, the employee's
retained rate will be terminated, and the employee's pay will be set at
the normal band maximum rate.
For a retained rate employee with a rating of record below Fully
Meets Expectations, the retained rate is frozen and not subject to
adjustment. When such an employee's retained rate falls below the
applicable adjusted rate for the normal band maximum, the employee's
retained rate will be terminated, and the employee's pay will be set at
an adjusted rate equal to the retained rate (i.e., the rate is not set
at the range maximum).
As required by 5 CFR 536.304(a)(2) and 536.305(a)(2), any general
pay adjustment, including a retained rate adjustment as described in
the preceding paragraphs, must be processed before any other
simultaneous pay action (such as a geographic pay conversion).
When applicable, the saved pay rules in 5 U.S.C. 3594 and 5 CFR
359.705 for former SES members continue to apply to demonstration
project employees, except that (1) an employee with a rating of record
below Fully Meets Expectations may not receive an increase in his or
her saved rate under 5 U.S.C. 3594(c)(2); and (2) the 50-percent
adjustment rule must be applied in the same manner as it is applied for
a retained rate under 5 U.S.C. 5363, subject to the modifications
described in the preceding paragraphs. The rules regarding termination
of a saved rate when it falls below the applicable adjusted maximum
rate must be parallel to those governing termination of a retained rate
under 5 U.S.C. 5363, subject to the modifications described in the
preceding paragraphs. The enhanced pay retention provisions described
in the preceding paragraphs do not apply to saved rates under 5 U.S.C.
3594.
NNSA may adopt supplemental pay administration policies governing
matters not specifically addressed in this plan, subject to any OPM
guidance.
11. Staffing Supplements
An employee who is assigned to an occupational series and
geographic area covered by an OPM-established special rates schedule,
and who meets any other applicable coverage requirements, will be
entitled to a staffing supplement if the maximum adjusted rate for a
covered position in the GS grades corresponding to the employee's band
is a special rate that exceeds the applicable maximum GS locality rate.
The staffing supplement is added on top of the rate of basic pay in the
same manner as locality pay. An employee will receive the higher of the
applicable locality payment or staffing supplement.
For employees being converted into the demonstration project, the
employee's total pay immediately after conversion will be the same as
immediately before, but a portion of the total will be in the form of a
staffing supplement. Adverse action and pay retention provisions will
not apply to the conversion process as there will be no change in the
total salary rate. The staffing supplement is calculated as described
below.
Upon conversion, the demonstration base rate will be established by
dividing the employee's former GS adjusted rate (the higher of special
rate or locality rate) by the staffing factor. The staffing factor will
be determined by dividing the maximum special rate for the banded
grades by the GS base rate corresponding to that special rate (step 10
GS base rate for the same grade as the special rate). The employee's
demonstration staffing supplement is derived by multiplying the
demonstration base rate by the staffing factor minus one. Therefore,
the employee's final demonstration special staffing rate equals the
demonstration base rate plus the special staffing supplement; this
amount will equal the employee's former GS adjusted rate.
Simplified, the formula is this:
Staffing factor = (Maximum special rate for banded grades) / (GS
base rate corresponding to that special rate)
Demonstration base rate = (Former GS adjusted rate [special or
locality rate]) / (Staffing factor)
Staffing supplement = demonstration base rate x (staffing factor -
1)
Salary upon conversion = demonstration base rate + staffing
supplement [sum will equal existing rate]
If a special rate employee is converted to a band where the maximum
GS adjusted rate for the banded grades is a
[[Page 72794]]
locality rate, when the employee is converted into the demonstration
project, the demonstration base rate is derived by dividing the
employee's former special rate by the applicable locality pay factor
(for example, in the Washington-Baltimore area, the locality pay factor
is 1.175 in 2006). The employee's demonstration locality-adjusted rate
will equal the employee's former GS adjusted rate.
Any General Schedule or special rate schedule adjustment will
require recomputation of the staffing supplement. Employees receiving a
staffing supplement remain entitled to an underlying locality rate,
which may over time supersede the need for a staffing supplement. If
OPM discontinues or decreases a special rate schedule, pay retention
provisions will be applied, as appropriate. Upon geographic movement,
an employee who receives the special staffing supplement will have the
supplement recomputed; any resulting reduction in the supplement will
not be considered an adverse action or a basis for pay retention.
Established salary including the staffing supplement will be
considered basic pay for the same purposes as a special rate under 5
CFR 530.308--e.g., for purposes of retirement, life insurance, premium
pay, severance pay, and advances in pay. It will also be used to
compute workers' compensation payments and lump-sum payments for
accrued and accumulated annual leave. Staffing supplement adjusted
rates are subject to the Executive Schedule level IV cap that applies
to GS locality rates and special rates (except as provided in the
following paragraph).
Adjusted rates that include a staffing supplement are subject to an
Executive Schedule level IV cap, except for employees in the upper
range extension whose rating of record is SEE. For those with a base
rate in the 5 percent upper range extension, an adjusted rate cap 5
percent higher than the normal EX-IV cap is established. This higher
cap will apply only to employees receiving a rate within the upper
range extension. If the adjusted rate for an employee at the normal
band maximum is affected by the EX-IV cap, resulting in an ``effective
staffing supplement percentage'' that is less than the regular staffing
supplement percentage, the adjusted rate for an employee in the upper
rate range extension of the same band will be computed using that same
effective staffing supplement percentage. (For example, if the regular
staffing supplement percentage is 35 percent, but the EX-IV cap causes
the amount of the staffing supplement actually received by an employee
at the regular band maximum to be 20 percent, that effective staffing
supplement percentage of 20 percent would be used to compute the
staffing supplement for an employee in the upper range extension of the
same band.)
OPM may approve staffing supplements for categories of employees
within the NNSA demonstration project who are not in approved special
rate categories for GS employees, consistent with the provisions in 5
U.S.C. 5305(a) and (b).
B. Performance Appraisal
NNSA recognizes the importance of maintaining highly credible
performance management systems. NNSA will use a performance management
program under the Department of Energy appraisal system that has been
approved by OPM consistent with chapter 43 of title 5, United States
Code. Throughout the duration of the demonstration project, the
effectiveness of performance management within the project will be
monitored by examining metrics and assessments that will be included in
the demonstration project evaluation plan.
1. Program Requirements
The NNSA performance appraisal program requires written performance
plans for each covered employee containing the employee's performance
elements and standards. The performance plan links the performance
elements and standards for individual employees to the organization's
strategic goals and objectives. Ongoing feedback and dialogue between
employees and their supervisors regarding performance is required. In
addition, the program provides for, at a minimum, one mid-year progress
review.
The NNSA appraisal program, including its performance levels and
standards, provides for making meaningful distinctions in performance.
The program currently uses a four-level rating pattern to both
summarize performance and to appraise performance at the element level.
Its summary level pattern under 5 CFR 430.208(d) uses Levels 1, 2, 3,
and 5, which NNSA has labeled Does Not Meet Expectations, Needs
Improvement, Fully Meets Expectations, and Significantly Exceeds
Expectations, respectively. Employees must be covered by their
performance plan for at least 90 days before they can be assigned a
rating of record. Supervisors and managers apply the appraisal program
in a way that makes appropriate differentiations in performance. These
differentiations reflect overall organizational performance. Employees
receive a written performance appraisal (i.e., a rating of record)
annually. Forced distributions of ratings are prohibited. Each annual
appraisal period will begin on October 1 and end on the following
September 30. Performance appraisals will be completed in a timely
manner to support pay decisions in accordance with section III.C.
Additional guidance on the NNSA performance appraisal program is
provided through internal operations manuals. Performance appraisal is
an evolutionary process, and changes may be made during the course of
the demonstration project based on findings from our ongoing
evaluations and reviews. Any changes will be communicated to affected
employees, and they will be given a chance to comment before NNSA
implements the changes.
2. Supervisory Accountability
Supervisors are responsible for providing appropriate consequences
for employee performance by addressing poor performance and recognizing
exceptional performance. The performance plans for supervisors and
managers include the degree to which supervisors and managers plan,
assess, monitor, develop, correct, rate, and reward subordinate
employees' performance. It is recognized that specific training must be
provided to prepare supervisors and managers to exercise these
responsibilities. NNSA has provided supervisory training each of the
past three years on philosophical and procedural aspects of its new and
still evolving performance management program (i.e., the lessons
learned in the administration of each performance appraisal cycle have
resulted in refinements each subsequent year). NNSA understands that
this demonstration project will heighten the need for continuing
supervisory training to support the accurate and realistic appraisal of
performance.
3. Reconsideration of Ratings
To support fairness and transparency for the program and its
consequences, employees have an opportunity to request reconsideration
of a rating of record. Such requests will be administered through a
reconsideration process outlined in NNSA's Demonstration Project
Policies and Procedures Manual. This procedure will be the sole process
for addressing complaints regarding overall summary ratings and ratings
of individual elements.
[[Page 72795]]
C. Performance-Based Pay Increases
1. Pay Pools
Funds that otherwise would be spent on the annual GS pay
adjustment, WGIs, and QSIs for demonstration project employees will
instead be placed into two pay pools: (1) the general pay increase pool
will include funds that otherwise would be spent on the annual
scheduled rate pay adjustment and (2) the performance pay pool will
include funds that would otherwise be used to pay WGIs and QSIs. The
performance pay pool also may include funds saved through the
elimination of promotion increases for promotions between grades that
are consolidated into the same band.
All employees with a rating of Fully Meets Expectations or higher
are entitled to an adjustment in the scheduled rate of pay equal to the
annual pay adjustment, which is also used to adjust NNSA pay ranges.
This general increase is funded by the general increase pool. Employees
who receive a rating below FME will be eligible for the annual pay
adjustment, should a new rating be assigned after a period of time
under a performance improvement plan.
Additional pay increases will be funded from the performance pay
pool using a share mechanism (1) to ensure that employees with higher
ratings of record receive greater pay increases than employees with
relatively lower ratings of record and (2) to control costs without
resorting to a forced distribution of ratings. Each employee will be
assigned a certain number of shares, based on his or her rating of
record in accordance with section III.C.2.
Participating organizations will establish pay pools for allocating
performance pay increases. NNSA will determine which participating
employees are covered by any pay pool and determine the dollar value of
each pay pool. In setting the value of pay pools, NNSA will initially
allocate an amount for performance pay increases equal to the estimated
value of the WGIs, QSIs, and applicable promotion increases that
otherwise would have been paid to participating employees. In computing
the estimated value of WGIs and QSIs, NNSA may use estimated
Governmentwide averages as computed by OPM.
2. Performance Shares
NNSA will establish rating/share patterns for each pay pool--that
is, the relationship between a rating of record and the number of
shares. NNSA rating/share patterns will ensure that a higher rating of
record receives a higher performance payout percentage for employees in
the normal rate range.
NNSA may adjust rating/share patterns over time after coordination
with OPM and after giving affected employees advance notice. A change
in the rating/share pattern may be applied in computing performance-
based pay adjustments based on an appraisal period only if it takes
effect at least 120 days before the end of that appraisal period.
Initially, the number of shares for each rating level will be as
follows: 4 shares are assigned to a Significantly Exceeds Expectations
summary rating when an employee receives SEE ratings in all critical
elements; 3 shares are assigned when an employee receives a summary
rating of SEE, but one or more critical elements are rated at FME; 2
shares are assigned to an FME summary rating when one or more critical
elements are rated at SEE; and 1 share is assigned to an FME summary
rating when no critical element is rated below FME. Employees who
receive a final summary rating of FME with one critical element rated
at the NI level are not eligible for any shares from the performance
pay pool.
No shares may be assigned to any rating of record below Fully Meets
Expectations, since no pay increase is payable to employees with such a
rating of record. After the ratings of record and shares are assigned
to employees, the value of a single share can be calculated.
In addition to performance-based pay increases, demonstration
project employees remain eligible to receive both monetary and non-
monetary forms of recognition, so long as employees are not rewarded
twice for the same contributions using incentive awards authorities
under chapter 45 of title 5. Additionally, supervisors may receive
supervisory bonuses, as referenced in section III.D. of this plan. NNSA
will adopt supplemental award administration policies not specifically
covered by this plan.
3. Performance Payout
In general: NNSA will determine the value of one performance share,
expressed as a percentage of the employee's rate of basic pay, based on
the value of the pay pool and the distribution of shares among pay pool
employees. An individual employee's performance payout is determined by
multiplying the determined percentage value of a performance share by
the number of shares assigned to the employee. The performance payout
is computed as a percentage of the employee's rate of base pay as in
effect on the date determined in NNSA policies. On the first day of the
last full pay period in each calendar year, this amount must be paid as
an increase in the employee's rate of basic pay, but only to the extent
that it does not cause the employee's rate to exceed the maximum rate
of the employee's rate range. Notwithstanding the preceding sentence,
employees in the upper band extension rated below the highest rating
level are subject to special rules as described in section III.A.6 and
III.A.10. Any portion of an employee's performance payout amount that
cannot be delivered as a basic pay increase will be paid out as a lump
sum (with no charge to the pay pool). Such a lump-sum payment is not
basic pay for any purpose and is not a cash award under chapter 45 of
title 5, United States Code.
An employee who does not have a rating of record for the appraisal
period most recently completed will be treated the same as employees in
the same pay pool who received the modal rating for that period,
subject to NNSA proration policies.
NNSA may establish policies on prorating the performance pay
increases and/or lump-sum payments for an employee who, during the
period between annual pay adjustments, was (1) hired or promoted, (2)
in leave-without-pay status, (3) on a part-time work schedule, or (4)
in other circumstances that make proration appropriate. Those policies
may establish a minimum employment period as a condition to receive any
amount of a performance payout.
If an employee's rating of record that is the basis for a
performance payout is retroactively revised (after the regular
effective date of performance payouts) through the reconsideration
process, the employee's performance payout must be retroactively
recomputed using the share value as originally determined. This also
applies to the retroactive correction of a critical element previously
rated as Needs Improvement, when that element rating resulted in zero
shares being given to an employee with a Fully Meets Expectations
rating of record. Any such retroactive corrections are not funded out
of the pay pool and do not affect the performance payouts provided to
other employees in the pay pool. In setting the size of a future pay
pool, management will take into account past and projected corrections.
Special provisions for employees returning to duty after a period
of service in the uniformed services or in receipt of workers'
compensation benefits: Special pay-setting provisions apply to
employees who do not have a rating of record to support a pay
[[Page 72796]]
adjustment but who are returning to duty status after a period of leave
without pay or separation during which the employee (1) was serving in
the uniformed services (as defined in 38 U.S.C. 4303 and 5 CFR 353.102)
with legal restoration rights (e.g., 38 U.S.C. 4316), or (2) was
receiving workers' compensation benefits under 5 U.S.C. chapter 81,
subchapter I. In these cases, NNSA will determine the employee's
prospective rate of basic pay upon return to duty by making performance
pay adjustments for the intervening period based on the modal rating of
record for employees in the same pay pool. The performance pay
increases during the intervening period may not be prorated based on
periods covered by this provision. In addition, a performance pay
increase that is effective after the employee's return to duty may not
be prorated based on periods covered by this provision. A lump-sum
payment for a period including actual service performed after the
employee's return to duty must be prorated (based on service covered by
this provision) under the same agency proration policies that apply
generally to periods of leave without pay.
Special provisions for employees receiving a retained rate: An
employee receiving a retained rate under 5 U.S.C. 5363 or 5 U.S.C. 3594
is not eligible for a basic pay increase except in conjunction with a
rate range adjustment, as described in section III.A.10. At the
discretion of the Administrator or the Administrator's designee, a
retained rate employee may receive the same lump-sum payment approved
for an employee in the same pay pool who is at the applicable range
maximum and who has the same performance rating of record and number of
shares.
4. Employees Who Cannot Receive a Performance Pay Increase
Employees with a rating of record at Fully Meets Expectations with
one or more elements rated at the Needs Improvement level are
prohibited from receiving a performance payout. Employees with a rating
of record below Fully Meets Expectations are prohibited from receiving
a performance payout or general pay adjustment. When an employee's pay
is frozen because of performance below Fully Meets Expectations, his or
her pay rate may fall below the normal minimum rate of the pay band,
since that range minimum may be increasing. However, in no case may an
employee's rate of basic pay be reduced more than 5 percent below the
normal range minimum. Details on adjusting the basic rate of pay to
stay within the 5 percent extended minimum rate range can be found in
III.A.10.
If NNSA later chooses to give such an employee a new rating of
record of Fully Meets Expectations before the end of the next appraisal
period, as a result of the successful completion of a formal
improvement plan, the employee is entitled to the same percentage of
basic pay as the percentage that would have applied if the employee had
been rated FME at the time the general pay adjustment was denied. This
provision only applies to the annual general pay adjustment and is not
retroactive. Under no circumstances is an employee eligible for a
performance payout based on share distribution until the next appraisal
period closes.
D. Supervisory Bonuses
NNSA may provide supervisors with annual supervisory bonuses. A
supervisory bonus may not exceed 5 percent of the employee's rate of
basic pay. A supervisory bonus is not basic pay for any purpose, nor
may it be used in computing a lump-sum annual leave payment under 5
U.S.C. 5551-5552. A supervisory bonus is not an award under 5 U.S.C.
chapter 45; it is a special lump-sum payment established under the
demonstration project authority. Bonus expenditures will be funded
through other NNSA funding sources. NNSA may establish supplementary
policies and procedures to implement these bonuses, subject to OPM
guidance.
E. Reduction-in-Force
1. If, during the life of the demonstration project, NNSA enters
into a reduction-in-force (RIF), the RIF will be conducted in
accordance with 5 U.S.C. 1302, 3502, and 3508 and 5 CFR part 351,
except as follows:
(a) Each of the five career paths in each NNSA local commuting area
will constitute separate competitive areas (i.e., separate from the
other career paths, and separate from the competitive areas of other
NNSA employees);
(b) NNSA will establish competitive levels consisting of all
positions in a competitive area which are in the same pay band and
classification series, and which are similar enough in duties,
qualification requirements, pay schedules, and working conditions so
that the incumbent of one position may be reassigned to any of the
other positions in the level without undue interruption. Each
demonstration project competitive level will become a Retention List
for purposes of competition when employees are released from their
competitive levels, displaced by higher-standing employees, or placed
during the exercise of assignment rights.
(c) Assignment rights will be modified by substituting ``one pay
band'' for ``three grades'' and ``two pay bands'' for ``five grades.''
(d) NNSA will use retention standing when it chooses to offer
vacant positions within the meaning of 5 CFR 351.704.
2. Prior to conducting a RIF, NNSA will issue and implement a
policy for the establishment and operation of an agency-level
reemployment priority list (RPL) designed to assist current NNSA
competitive service demonstration project employees who will be
separated as a result of a RIF and, subsequently, former NNSA
competitive service demonstration project employees who have been
separated as a result of a RIF, or who have fully recovered from a
compensable injury after more than one year, in their efforts to be
reemployed at NNSA, by affording them priority consideration over
certain outside job applicants for NNSA competitive service
demonstration project vacancies.
NNSA will develop and adopt supplemental RIF administration
procedures to augment the RIF policies stipulated by this plan.
IV. Training
As NNSA has learned during the past three years of implementing and
refining a new performance management program, training for all
involved will be essential to the success of the demonstration project.
Training will be provided to employees, supervisors, and managers
before the project is launched and throughout the life of the project.
It is important that employees perceive the performance management
program as fair and transparent; therefore, supervisors and managers
will be trained extensively in setting and communicating performance
expectations; monitoring performance and providing timely feedback;
developing employee performance and addressing poor performance; rating
employees' performance based on expectations; and involving employees
in the development and implementation of the performance appraisal
program. Supervisors and managers will be held accountable for the
effective management of the performance of employees they supervise
through performance expectations set for and appraisals made of their
own performance in this regard.
All employees will be trained in the performance appraisal process
and the pay adjustment mechanism. Various types of training are being
considered,
[[Page 72797]]
including videos, on-line tutorials, and train-the-trainer concepts.
V. Conversion
A. Conversion to the Demonstration Project
1. Employees whose positions become covered by the demonstration
project will convert into the career path and pay band covering the
occupational series and grade of their position of record. Employees
will convert to the demonstration project with no change in their total
rate of pay (including basic pay, plus any applicable locality payment,
special rate supplement, or staffing supplement). Special conversion
rules apply to special rate employees as described in section III.A.10,
Staffing Supplements. Any simultaneous pay action that is scheduled to
take effect under the GS pay system on the date of conversion must be
processed before processing the conversion to the pay banding system.
NNSA implementing policies will provide procedures for converting an
employee on grade retention under 5 U.S.C. 5362 or receiving a retained
rate under 5 U.S.C. 5363 or a saved rate under 5 U.S.C. 3594 to the
demonstration project.
2. Immediately after conversion, eligible employees will receive an
increase in basic pay reflecting the prorated value of the next
scheduled within-grade increase (WGI). The prorated value is determined
by calculating the portion of the time-in-step employees have completed
towards the waiting period for their next WGI. This WGI ``buy-in''
adjustment will not be paid to (1) employees who are at the step 10
rate for their grade immediately before conversion to the demonstration
project, (2) employees who are receiving a retained rate of pay under 5
U.S.C. 5363 or saved rate under 5 U.S.C. 3594 immediately before
conversion to the demonstration project, or (3) employees whose rating
of record is below Fully Meets Expectations.
3. Adverse action provisions under 5 U.S.C. chapter 75, subchapter
II, do not apply to reductions in pay upon conversion into the
demonstration project as long as the employee's total rate of pay
(including basic pay, plus any applicable locality payment, special
rate supplement, or staffing supplement) is not reduced upon
conversion.
4. The first performance-based pay increase under the project's pay
adjustment mechanism will be effective on the first day of the last
full pay period in calendar year 2008.
5. For employees who enter the demonstration project by lateral
reassignment or transfer (i.e., not by conversion of position), NNSA
may apply parallel pay conversion rules, including rules for providing
a prorated adjustment reflecting time accrued toward a GS within-grade
increase or similar within-range adjustment under another pay system.
If conversion into the demonstration project is accompanied by a
geographic move, the employee's pay entitlements under the former pay
system in the new geographic area must be determined before performing
the pay conversion.
B. Conversion to the General Schedule System
NNSA implementing policies will provide procedures for converting
an employee's pay band and pay rate to a GS-equivalent grade and rate
of pay if the employee moves out of the demonstration project to a GS
position. The converted GS-equivalent grade and rate of pay will be
determined before any geographic move, promotion, or other simultaneous
action that occurs simultaneously with conversion back to the GS
system. The new employing organization must use the converted GS-
equivalent grade and rate of pay in applying various pay administration
rules that govern how pay is set in the GS position (e.g., rules for
promotion and highest previous rate under 5 CFR part 531, subpart B,
and pay retention under 5 CFR part 536). The converted GS grade and
rate of pay are deemed to have been in effect at the time the employee
left the demonstration project pay banding system. The rules for
determining the converted GS grade for pay administration purposes do
not apply to the determination of an employee's GS-equivalent grade for
other purposes, such as reduction-in-force or adverse action. NNSA will
perform the computations for employees who remain within NNSA and DOE.
NNSA may perform the computations, as a courtesy, for employees who
move to other Federal agencies. At a minimum, NNSA will provide a copy
of the conversion procedures to gaining Federal agencies for their use.
If an employee moves out of the demonstration project to a non-GS
system, the employee's pay will be set under the pay-setting rules
governing that system.
VI. Project Duration
The initial implementation period for the demonstration project
will be 5 years. However, with OPM's concurrence, the project may be
extended for additional testing or terminated before the expiration of
the 5-year period.
VII. Project Modification
Demonstration projects require modification from time to time as
experience is gained, results are analyzed, and conclusions are reached
on how the system is working. NNSA may modify and adjust over time
features and elements of this project plan. NNSA will coordinate such
modifications with OPM and gain its approval prior to implementing the
modification. Depending on the nature and extent of the modification,
OPM may require that the modification be published as a notice in the
Federal Register.
VIII. Project Evaluation
Chapter 47 of title 5, United States Code, requires an evaluation
of the results of the demonstration project. NNSA, in coordination with
OPM, will develop a plan to evaluate the demonstration project to
determine the extent to which the pay increases paid to participating
employees reflect meaningful distinctions among their levels of
performance and the extent to which the project is achieving its other
stated goals. Workforce data will be analyzed to make this assessment
and to determine whether the project is resulting in any adverse impact
on particular groups of employees. Key indicators, including leadership
commitment, communication, stakeholder involvement, training, planning,
mission alignment, and the rewarding of performance, will be assessed
to ensure compliance with stated project goals.
To evaluate and assess this project, NNSA intends to use a new
approach developed by OPM and piloted during OPM's 2007 assessments of
the Department of Defense's and Department of Homeland Security's
Alternative Personnel Systems (APSs). This new approach is entitled the
``Alternative Personnel Systems Objectives-Based Assessment
Framework.'' Because demonstration projects are APSs, this Framework
will be applicable.
The Assessment Framework is an evaluation structure for determining
the extent to which an agency is adequately preparing for and
progressing on the goals and objectives of its APS. It describes
assessment components, dimensions, elements, and indicators that may be
adapted to address the project's specific requirements. The Framework
complements the approach used in previous demonstration projects where
the evaluation assessed both the implementation and impact of specific
interventions and determined whether
[[Page 72798]]
these interventions were effective and likely to be beneficial
Governmentwide. It uses a standard approach that assesses project
implementation and the extent to which personnel system changes are
meeting their intended objectives. The Assessment Framework allows
stakeholders, including OPM, to draw conclusions about the success of
the project. It includes a set of qualitative and quantitative
standards which, based on past experience in both the public and
private sectors, and input from key stakeholders in both OPM and other
agencies, are essential to successfully implementing significant human
capital reforms.
There are two major components to the Framework: Preparedness and
Progress. The Preparedness component assesses an agency's readiness to
implement a demonstration project. The Progress component assesses the
extent to which the agency has achieved, or is in the process of
achieving, the project's goals and objectives.
Each of the components includes five dimensions or key attributes.
The dimensions of the Preparedness component are Leadership Commitment,
Open Communication, Training, Stakeholder Involvement, and
Implementation Planning. Agencies that provide adequate emphasis and
effort in the Preparedness dimensions are well positioned to
successfully implement a demonstration project or other APS. The
dimensions of the Progress component are Mission Alignment, Results-
Oriented Performance Culture, Workforce Quality, Equitable Treatment,
and Implementation Plan Execution. Agencies that demonstrate Progress
in achieving these broad goals are successfully implementing their APS.
The following table depicts the Assessment Framework, including the
dimensions (key attributes of the Preparedness and Progress components)
and elements (specific features that define dimensions) for each
component.
APS Objectives-Based Assessment Framework
------------------------------------------------------------------------
Dimension Element
------------------------------------------------------------------------
Preparedness
------------------------------------------------------------------------
LEADERSHIP COMMITMENT:
Agency leaders are actively engaged Engagement--The extent and
in promoting and gaining workforce sufficiency of senior leader
acceptance of the program, as well efforts to promote, provide
as prioritizing program information about, and gain
implementation. Agency leaders widespread acceptance of the
provide appropriate resources for APS across an agency workforce
program implementation and are via leadership outreach and
held accountable for effective communication programs.
execution. Accountability--Agency leaders
identify APS implementation as
an agency priority, and are
responsible for playing an
active role in the design,
development and/or
implementation of the APS.
Resources--Agency leaders
ensure an agency has
established an appropriate
organizational framework with
sufficient resources and
authorities to effectively
design, develop, and implement
the APS.
Governance--Agency leaders
ensure a clear governance
process is established for the
APS program, including an
effective mechanism for
resolving conflicts and
finalizing decisions, and this
governance process is being
used to address disagreements
regarding APS design,
development, and
implementation issues.
OPEN COMMUNICATION:
Agency provides accurate, up-to- Information Access--Agencies
date information on system ensure comprehensive
features and implementation plans. information is available via a
Active outreach efforts are website accessible by all
undertaken to provide information employees regarding key APS
to employees and to address design features, training
questions and concerns. Effective materials, rollout schedules,
mechanisms are in place for and other APS issues.
gathering and considering feedback. Outreach--Agencies conduct
regular outreach sessions such
as town meetings, webinars,
electronic newsletters and
other information channels
that provide employees with up-
to-date information on APS
status and issues.
Feedback--Agencies provide
employees with an accessible
mechanism for providing
feedback on APS features and
issues, and establish
practical procedures for
considering this feedback.
TRAINING:
Agency developers and executes a Planning--An agency establishes
comprehensive training strategy a comprehensive training
for effective training on relevant strategy that addresses the
components of the program to users full range of APS components,
via a range of delivery methods. tools, and roles.
Delivery--An agency implements
the training strategy to
ensure all staff receive
training appropriate for their
role in the APS, with special
emphasis on ensuring
supervisors acquire the
performance management
competencies required to
administer the APS
effectively.
STAKEHOLDER INVOLVEMENT:
Stakeholders are actively involved Inclusion--Agencies engage a
in the program design and broad spectrum of key
evaluation process and play a stakeholder groups to capture
supportive role in the a wide range of perspectives
implementation of the program. regarding APS design features,
and to foster buy-in and
support for the APS across
these stakeholder groups.
[[Page 72799]]
IMPLEMENTATION PLANNING:
Agency establishes and implements a Work Stream Planning and
comprehensive planning process Coordination--Agencies require
that coordinates activities across an effective planning process
key work streams, such as HR that identifies and defines
business processes and procedures, key work streams, highlights
tools and technology critical dependencies,
infrastructure, and change provides for the management
management, while providing and mitigation of risk, and
mechanisms for assessing status facilitates regular
and managing risk. assessments of status against
key milestones.
HR Business Processes and
Procedures--Prior to rolling
out an APS, an agency
documents the business
processes and procedures
associated with all APS
components, such as staffing,
pay pool administration, and
performance management.
Tools and Technology
Infrastructure--Agencies
develop appropriate technology
tools and infrastructure to
enable administering the APS.
Structured Approach--Agencies
develop a comprehensive change
management strategy that
addresses managing the
mechanisms for people side of
change.
------------------------------------------------------------------------
Progress
------------------------------------------------------------------------
MISSION ALIGNMENT:
The program effectively links Line of Sight--The degree to
individual, team, and unit which employee performance
performance to organizational expectations are linked to
goals and desired results. agency mission.
Accountability--Identifies not
only whether or not the
linkage is present in
performance plans, but also
whether or not employees are
actually accountable for
achieving them.
RESULTS-ORIENTED PERFORMANCE CULTURE:
The program promotes a high Differentiating Performance--
performance workforce by The extent to which
differentiating between high and performance ratings cover a
low performers and rewarding full distribution of likely
employees on the basis of levels, versus clustering at
performance while effectively the higher end of the scale.
managing payroll costs. Pay for Performance--The
relationship between pay
raises and awards/bonuses and
performance rating levels.
Cost Management--The extent to
which reliable cost estimates
are associated with decisions
and the extent to which
decision makers are
accountable for cost
management.
WORKFORCE QUALITY:
Agency retains its high performers, Recruitment--The extent to
keeps employees satisfied and which the agency can improve
committed, attracts high-quality its ability to recruit
new hires, and transitions its low employees with the appropriate
performers out of the organization. skills, based on the
perceptions of supervisory
employees.
Flexibility--The agency's
Progress in providing
supervisors with the personnel
flexibility needed to re-
deploy their staff, and the
extent to which this
flexibility is used.
Retention--The ability of an
agency to use the tools
provided by the APS to
increase the rewards to high
performers, thereby helping
assure that they remain with
the agency, and to provide
appropriately lower rewards to
lower performers such that
they either improve their
performance or decide to leave
the agency.
Satisfaction and Commitment--
Based on the premise that an
agency's mission performance
is increased when its
workforce is both committed
and satisfied.
EQUITABLE TREATMENT:
The program promotes an environment Fairness--The objective is to
of fairness and trust for measure the impact of the APS
employees, consistent with the on the perceived fairness of
Merit System Principles and free agency-related practices.
of Prohibited Personnel Practices. Transparency--This element will
assess whether pay for
performance processes and
procedures are available and
understood by stakeholders.
Trust--The literature and
historical data suggest that
employee trust is essential to
success not only of the APS,
but also an agency's overall
effectiveness. This element
will assess the impact of the
APS on the level of trust
employees have for their
supervisors.
IMPLEMENTATION PLAN EXECUTION:
Agency demonstrates Progress in Work Stream Planning and
implementing the program in Status--This element will
accordance with its comprehensive assess the execution of the
planning process. implementation process in
accordance with the planning
process, with attention to key
work streams, critical
dependencies, management and
mitigation of risk, and
regular assessment of status.
Performance Management System
Execution--This element will
provide an assessment of the
extent to which the
performance management
components of the APS are
being as intended.
Employee Support for APS--While
not definitive as to the
overall effectiveness of the
APS, employee support is a
strong indicator of
implementation Progress and
will be assessed.
------------------------------------------------------------------------
[[Page 72800]]
In addition to dimensions and elements, NNSA's final Evaluation
Plan, to be approved by OPM, will stipulate the indicators
(characteristics used to measure or assess the agency's performance
against the elements), the assessment criteria (standards by which the
individual indicators are judged), and planned data sources to be used
to evaluate the project. Assessment criteria will be used to assess
indicators; indicators will be used to assess elements, and elements
will be used to assess dimensions. An example of indicators, assessment
criteria, and data sources is included in the table below:
Progress
----------------------------------------------------------------------------------------------------------------
Assessment
Dimension Element Indicator criteria Data sources
----------------------------------------------------------------------------------------------------------------
Results-Oriented Performance Pay for Extent to which Following program Payout matrices,
Culture. Performance. pay/bonuses are implementation, salaries,
linked to there is a high bonuses, and
performance association performance
(e.g., mean pay between ratings from
increases and performance workforce data.
bonuses by ratings and
performance level/ salary increases
band). (allowing for pay
band limits).
Following program
implementation,
there is a high
association
between
performance
ratings and
bonuses.
Perception of Continuing Employee Survey.
association improvement over Awards/pay raises
between baseline/prior in my work unit
performance year's work. depend on how
rating and well employees
financial reward. perform their
jobs.
----------------------------------------------------------------------------------------------------------------
The evaluation process will be conducted in two main phases over a
5-year period--formative and summative evaluation. The formative
evaluation phase will include baseline data collection (i.e.,
collecting ``current state'' measures prior to the implementation of
the project) and analyses, implementation and progress evaluation, and
interim assessments. The formal reports and interim assessments will
provide information on the project implementation and operation, as
well as current information on the impact of the project on veterans
and EEO groups, Merit System Principles, and Prohibited Personnel
Practices. The summative evaluation will focus on an overall assessment
of the demonstration project outcomes after five years. The final
report will provide information on how well the interventions achieved
the desired goals and will provide recommendations on broader Federal
Government application.
The project will be examined during each phase of the evaluation to
assess that costs are being managed effectively. Moreover, cost
discipline will be examined during each phase of the evaluation to
ensure spending remains within acceptable limits. The evaluation will
also address the extent to which the project has incorporated the
elements required by section 1126 of Public Law 108-136 (5 U.S.C. 4701
note) for pay-for-performance systems in demonstration projects: (1)
Adherence to merit principles set forth in section 2301 of title 5; (2)
a fair, credible, and transparent employee performance appraisal
system; (3) a link between elements of the pay-for-performance system,
the employee performance appraisal system, and the agency's strategic
plan; (4) a means for ensuring employee involvement in the
implementation and operation of the pay-for-performance system; (5)
adequate training and retraining for supervisors, managers, and
employees in the implementation and operation of the pay-for-
performance system; (6) a process for ensuring ongoing performance
feedback and dialogue between supervisors, managers, and employees
throughout the appraisal period, and setting timetables for review; (7)
effective safeguards to ensure that the management of the system is
fair and equitable and based on employee performance; and (8) a means
of ensuring that adequate agency resources are allocated for the
design, implementation, and administration of the pay-for-performance
system.
IX. Costs
A. Buy-in Costs
There will be added costs resulting from the within-grade increase
``buy-in'' provision described in section V; however, those costs will
be offset to some degree by the elimination of within-grade step
increases that otherwise would have occurred.
B. Recurring Costs
All funding will be provided through the organization's budget. No
additional funding will be requested specifically for this project; all
costs will be charged to available funds through existing
appropriations, including those incurred in the areas of project
development, training, and project evaluation.
X. Waiver of Laws and Regulations Required
A. Title 5, United States Code
Chapter 35, section 3594: Saved pay for former members of the
Senior Executive Service (only to the extent necessary to (1) bar
employees with a rating of record lower than Fully Meets Expectations
from receiving saved rate increases under 5 U.S.C. 3594(c)(2); (2)
provide a saved rate that is less than the maximum rate (including any
locality adjustment or staffing supplement) of the upper range
extension for an employee who receives a rating of record of
Significantly Exceeds Expectations will be terminated and converted to
an equal adjusted rate; (3) provide the range maximum rate used to
compute saved rate adjustments is the normal range maximum rate
(including any locality adjustment or staffing supplement); and (4)
provide when a frozen saved rate for an employee with a rating of
record below Fully Meets Expectations falls below the applicable
adjusted rate for the normal band maximum, the saved rate will be
terminated and the employee's pay will be set at an adjusted rate equal
to the saved rate).
Chapter 51: Classification (except that (1) sections 5111 and 5112
are retained with ``grade'' replaced by ``pay bands'' and (2) for the
purpose of applying any other laws, regulations, or policies that refer
to GS employees or to chapter 51
[[Page 72801]]
of title 5, United States Code, the modified classification system
established under this plan must be considered to be a GS
classification system under chapter 51; this includes, but is not
limited to, the reference to the General Schedule in section 5545(d)
(relating to hazard pay)).
Chapter 53, section 5302(1)A, (8) and (9): Definitions (only to the
extent necessary to provide that employees under the demonstration
project are not considered to be GS employees for the purposes of
annual adjustments under section 5303 or similar provisions of law
governing annual adjustments for employees covered by section 5303).
Chapter 53, section 5303: Annual adjustments to pay schedules.
Chapter 53, section 5304: Locality-based comparability payments
(only to the extent necessary to (1) provide a locality rate that may
not exceed the rate for EX-IV plus 5 percent for employees in the upper
range extension; (2) apply an ``effective'' locality pay percentage for
employees in the upper range extension under circumstances described in
the plan); and (3) allow a frozen locality pay percentage for employees
with a rating of record below Fully Meets Expectations, as provided in
the plan
Chapter 53, section 5305: Special pay authority.
Chapter 53, sections 5331-5336: General Schedule pay rates (except
that, for purposes of applying any other laws, regulations, or policies
that refer to GS employees or to subchapter III of chapter 53 of title
5, United States, Code, the modified pay system established under this
plan must be considered to be a GS pay system established under such
subchapter III; this includes, but is not limited to, references to the
General Schedule in section 5304 (relating to locality pay), section
5545(d) (relating to hazard pay), and sections 5753-5754 (dealing with
recruitment, relocation, and retention incentives)).
Chapter 53, section 5362: Grade retention.
Chapter 53, section 5363: Pay retention (only to the extent
necessary to (1) replace ``grade'' with ``band;'' (2) bar employees
with a rating of record lower than Fully Meets Expectations from
receiving retained rate increases under 5 U.S.C. 5363(b)(2)(B); (3)
provide that pay retention provisions do not apply to conversions into
the demonstration project from the General Schedule or other pay
system, as long as the employee's total pay rate is not reduced; (4)
provide the pay (including any locality adjustment or staffing
supplement) of an employee in the upper range extension who is rated
below Significantly Exceeds Expectations will be converted to a
retained rate before processing any other actions; (5) provide a
retained rate that is less than the maximum rate (including any
locality adjustment or staffing supplement) of the upper range
extension for an employee who receives a rating of record of
Significantly Exceeds Expectations will be terminated and converted to
an equal adjusted rate; (6) provide the range maximum rate used to
compute retained rate adjustments is the normal range maximum rate
(including any locality adjustment or staffing supplement); (7) provide
a retained rate under the enhanced pay retention provisions in section
III.A.10. will be increased by 100 percent of the dollar amount of any
increase in the normal maximum rate of the employee's band during the
two-year period beginning on the date the employee's retained rate is
established; and (8) provide when a retained rate for an employee with
a rating of record below Fully Meets Expectations falls below the
applicable adjusted rate for the normal band maximum, the retained rate
will be terminated and the employee's pay will be set at an adjusted
rate equal to the retained rate)
Chapter 55, section 5542(a): Overtime rates (only to the extent
necessary to provide that the GS-10 minimum special rate (if any) for
the special rate category that would otherwise apply to an employee
(but for the existence of the demonstration project) is deemed to be
the ``applicable special rate of pay'' in determining the overtime
hourly rate cap)
Chapter 55, section 5547: Limitation on premium pay (only to the
extent necessary to provide that an applicable staffing supplement is
added to the GS-15, step 10, rate in lieu of the applicable locality
payment)
Chapter 75, section 7512(34): Adverse actions (only to the extent
necessary to replace ``grade'' with ``band'')
Chapter 75, section 7512(4): Adverse actions (only to the extent
necessary to provide that adverse action provisions do not apply to
conversions into the demonstration project from the General Schedule or
other pay system, as long as the employee's total rate of pay is not
reduced)
Note: If any of the provisions of title 5, United States Code,
listed above are amended during the period this demonstration
project is in effect, NNSA may choose to terminate the waiver of one
or more such provisions with respect to employees participating in
the project, without formally modifying the project itself. NNSA
must notify OPM when any such waiver is terminated.
B. Title 5, Code of Federal Regulations
Part 210, subpart A, section 210.102(b)(12): Reassignment (only to
the extent necessary to modify the definition of reassignment to
include the movement of an NNSA demonstration project employee from one
position to another position with a pay adjustment).
Part 300, subpart F, section 300.604: Restrictions (only to the
extent necessary to restrict advancement to a higher pay band to
candidates who have completed a minimum of 52 weeks in positions no
more than one pay band lower than the position to be filled)
Part 330, subpart B, section 330.201: Establishment and maintenance
of Reemployment Priority List (RPL) (only to the extent necessary to
establish and maintain a reemployment priority list exclusively for
NNSA competitive service demonstration project employees)
Part 351, subpart D, section 351.402: Competitive area (only to the
extent necessary to permit the use of career paths in conjunction with
organizational units and geographic locations when establishing
competitive areas)
Part 351, subpart D, section 351.403: Competitive level (only to
the extent necessary to substitute ``same pay band'' for ``same
grade'')
Part 351, subpart G, section 351.701: Assignment involving
displacement (only to the extent necessary to substitute ``one pay
band'' for ``three grades'' and ``two pay bands'' for ``five grades'')
Part 359, subpart G, section 359.705: Pay (only to the extent
necessary to (1) bar employees with a rating of record lower than Fully
Meets Expectations from receiving a saved rate increase under 5 CFR
359.705(d)(1); (2) provide a saved rate that is less than the maximum
rate (including any locality adjustment or staffing supplement) of the
upper range extension for an employee who receives a rating of record
of Significantly Exceeds Expectations will be terminated and converted
to an equal adjusted rate; (3) provide the range maximum rate used to
compute saved rate adjustments is the normal range maximum rate
(including any locality adjustment or staffing supplement); and (4)
provide when a saved rate for an employee with a rating of record below
Fully Meets Expectations falls below the applicable adjusted rate for
the normal band maximum, the saved rate will be terminated and the
employee's pay will be set at an adjusted rate equal to the saved rate)
[[Page 72802]]
Part 430, subpart B, section 430.203: Definitions (only to the
extent necessary to allow an additional rating of record to support a
pay decision under section III.C.3 or 4 of this project plan)
Part 511, subpart B: Coverage of the General Schedule
Part 530, subpart C: Special Rate Schedules for Recruitment and
Retention
Part 531, subpart B: Determining Rate of Basic Pay
Part 531, subpart D: Within-Grade Increases
Part 531, subpart E: Quality Step Increases
Part 531, section 531.604: Determining an employee's locality rate
(only to the extent necessary to (1) allow a frozen locality pay
percentage for employees with a rating of record below Fully Meets
Expectations, as provided in the plan; and (2) apply an ``effective''
locality pay percentage for employees in the upper range extension
under circumstances described in the plan)
Part 531, section 531.606: Maximum limits on locality rates (only
to the extent necessary to provide a locality rate may not exceed the
rate for EX-IV plus 5 percent for employees in the upper range
extension).
Part 536, subpart B: Grade Retention
Part 536, subpart C: Pay Retention (only to the extent necessary to
(1) replace ``grade'' with ``band;'' (2) bar employees with a rating of
record lower than Fully Meets Expectations from receiving retained rate
increases under 5 CFR 536.305; (3) provide that pay retention
provisions do not apply to conversions into the demonstration project
from the General Schedule or other pay system, as long as the
employee's total pay rate is not reduced); (4) provide that a retained
rate may not exceed the rate for EX-IV plus 5 percent; (5) provide the
pay (including any locality adjustment or staffing supplement) of an
employee in the upper range extension who is rated below Significantly
Exceeds Expectations will be converted to a retained rate before
processing any other actions; (6) provide a retained rate that is less
than the maximum rate (including any locality adjustment or staffing
supplement) of the upper range extension for an employee who receives a
rating of record of Significantly Exceeds Expectations will be
terminated and converted to an equal adjusted rate; (7) provide the
range maximum rate used to compute retained rate adjustments is the
normal range maximum rate (including any locality adjustment or
staffing supplement); (8) provide a retained rate under the enhanced
pay retention provisions in section III.A.10. will be increased by 100
percent of the dollar amount of any increase in the normal maximum rate
of the employee's band during the two-year period beginning on the date
the employee's retained rate is established; and (9) provide when a
retained rate for an employee with a rating of record below Fully Meets
Expectations falls below the applicable adjusted rate for the normal
band maximum, the retained rate will be terminated and the employee's
pay will be set at an adjusted rate equal to the retained rate).
Part 550, sections 550.106-107: Biweekly and annual maximum
earnings limitation (only to the extent necessary to provide that an
applicable staffing supplement is added to the GS-15, step 10, rate in
lieu of the applicable locality payment.
Part 550, section 550.113(a): Computation of overtime pay (only to
the extent necessary to provide that the GS-10 minimum special rate (if
any) for the special rate category that would otherwise apply to an
employee (but for the existence of the demonstration project) is deemed
to be the ``applicable special rate of pay'' in determining the
overtime hourly rate cap).
Part 550, section 550.703: Definitions (to the extent necessary to
modify paragraph (c)(4) of the definition of ``reasonable offer'' by
replacing ``two grade or pay levels'' with ``one pay band level'' and
``grade or pay level`` with ``pay band level'').
Part 752, section 752.401(a)(3): Adverse actions (only to the
extent necessary to replace ``grade'' with ``band'').
Part 752, section 752.401(a)(4): Adverse actions (only to the
extent necessary to provide that adverse action provisions do not apply
to conversions into the demonstration project from the General Schedule
or other pay system, as long as the employee's total rate of pay is not
reduced.
Note: If any of the provisions of title 5, Code of Federal
Regulations, listed above are revised during the period this
demonstration project is in effect, NNSA may choose to terminate the
waiver of one or more such provisions with respect to employees
participating in the project, without formally modifying the project
itself. NNSA must notify OPM when any such waiver is terminated.
[FR Doc. 07-6144 Filed 12-20-07; 8:45 am]
BILLING CODE 6325-43-P