DOD to review NSPS pay system

The Defense Department said today it would review the National Security Personnel System (NSPS), the pay-for-performance compensation system used by several organizations in DOD. Deputy Secretary of Defense William Lynn said he made the decision in consultation with the Office of Personnel Management while recognizing varying viewpoints about the NSPS.

Critics have said the system needs more transparency of the measures under which employees are evaluated and awarded pay increases and bonuses. DOD began implementing NSPS in 2006. It now covers 205,000 DOD employees, Lynn said.

“This administration is committed to operating fair, transparent, and effective personnel systems, and we are undertaking this review to assess whether NSPS meets these objectives,” Lynn said. With new leadership under a new administration, DOD and OPM said they would communicate with a variety of organizations in examining NSPS.

DOD will delay any further conversions of organizations into NSPS pending the outcome of this review, Lynn said. About 2,000 employees were scheduled to convert to NSPS this spring; organizations already covered by NSPS will continue to operate under current NSPS policies, regulations, and procedures, he said.

DOD and OPM are in discussions with key personnel in the administration to determine the overall framework, scope and timeline of the review, including identifying an appropriate person to lead it, he said. A review team is expected to take several months to gather the necessary information and data, reach out to stakeholders, and develop recommendations for leadership's consideration, Lynn said.