DOD rolls out new personnel system to the first 11K people

More than 11,000 Defense Department employees were set to shift to the National Security Personnel System (NSPS) April 30 as part of the first phase of a multitiered pilot program. The employees will be subject to a new pay-for-performance system, a departure from the current General Schedule pay.

“NSPS is essential to the department’s efforts to create an environment in which the Total Force (military personnel, civilian employees and contractors) thinks and operates like one cohesive unit,” state the final regulations of the NSPS ruling published in the Federal Register. NSPS is a pay-for-performance plan that, if fully implemented, would affect more than 650,000 DOD workers.

Spiral 1.1, the name for the initial implementation, is much smaller than originally planned. DOD scaled back and delayed NSPS’ launch in January because of legal challenges. Spiral 1.1 was initially set to cover more than 65,000 employees. Most of the 11,000 workers included are non-union Civilian Human Resources (CHR) employees, who have experience working under alternative pay systems. In late March, the Government Accountability Office declared that it would conduct a six-month comprehensive review of NSPS costs.

DOD received more bad news in February when U.S. District Judge Emmet Sullivan said major portions of NSPS were illegal and violated workers’ rights. That was the result of a lawsuit filed by 13 unions and spearheaded by the American Federation of Government Employees. Unions viewed NSPS’ troubles as a sign that the system was losing momentum. “NSPS is a sinking ship,” said John Gage, AFGE’s national president, in a press release.

The unions believe NSPS violates their rights to collective bargaining and does not provide for proper third-party review through the National Security Labor Relations Board.

By mid-April, DOD appealed the ruling in hopes of bringing the delayed half of NSPS up to speed with the rest of the pilot program.

“We have passed a National Security Personnel System so that we could begin to get a grip on how we manage the Department of Defense and the civilian population, the workforce,” said Defense Secretary Donald Rumsfeld, at a press conference after DOD filed the appeal.

Not wholly satisfied with the unions’ initial victory, AFGE will file a cross-appeal May 1 as Spiral 1.1 launches. “We were almost universally successful in our case before Judge Sullivan, but there were several things we did not prevail on,” said Joe Goldberg, AFGE’s attorney. Goldberg said he did not believe that the ruling addressed DOD’s ability to restrict the course of bargaining.

Despite opposition from unions, DOD is moving forward with NSPS implementation because many portions of the system remain legal. DOD began NSPS training and automation testing in the final week of March and released a Spiral 1.1 training booklet March 30. At a mid-April hearing in Hawaii, human resources employees from the military services and local unions testified before the Senate Oversight of Government Management, the Federal Workforce, and The District of Columbia Subcommittee about the training and implementation of Spiral 1.1.

Military divisions can better train workers for NSPS and help smooth the transition to the new system with the assistance of CHR employees.

“I believe our employees are well-prepared for NSPS implementation and will soon embrace it as a means to improved performance,” said Jeffrey Wataoka, director of the Navy’s Human Resources Center for the Pacific.

Spiral 1.2, the second phase of the system’s initial deployment, is set to begin in October, and the final phase, Spiral 1.3, is scheduled for January 2007. Spiral 1.2 was originally expected to cover 47,000 employees, and Spiral 1.3 was to cover more than 160,000. The changes to the Spiral 1.1 plan may cause a ripple effect into the later phases, however.

Spiral 2, a second wave of deployment, will also follow an incremented plan during the next few years.