As NSPS ends, employees wait for what's next

Defense Department employees who are participants in the National Security Personnel System (NSPS) can do only one thing now—wait—after President Obama signed the fiscal 2010 National Defense Authorization Act on Oct. 28. The law includes a provision to end NSPS, a controversial system that links pay to a DOD employee's performance.

More than 200,000 DOD employees under the NSPS could revert to the more broadly used federal General Schedule (GS) system by 2012 under the law. The law requires DOD to start by next April on the orderly conversion of NSPS employees to another statutory pay system.

“The details are still to be worked out” on how the system will end and what exactly will come next, said John Palguta, vice president of policy at the Partnership for Public Service. “Frankly, that’s not spelled out in the law.” Meanwhile, the NSPS employees can wait in peace. “No one’s going to be hurt” as NSPS shuts down, Palguta said.

And some employees may even wait expectantly. An employee whose NSPS pay is between two GS levels, will move up to the higher level, Palguta said. “They may come out a little ahead,” he said.

Although employees may not lose money immediately, Darryl Perkinson, president of the Federal Managers Association, said it may not work out so well for all NSPS employees, especially those at the top of their GS pay scale. If an employee exceeds the overall pay scale, their regular pay raises may be stalled — partially or in full—until the whole GS pay increases to that amount, he said.

Officials need to have a serious discussion on how to properly pay people who did a good job in the NSPS system and earned their pay with good performance, he added.

As DOD ends its pay-for-performance system, experts also say the GS system also has problems. Employees who worked extra hard get the same pay increase as employees who do an average job, they say.

“The automatic system doesn’t get much favor either,” Perkinson said.

However, the law also offers a chance for DOD and the Office of Personnel Management to develop new regulations for the civilian workforce that includes “fair, credible and transparent methods for hiring and assigning personnel and for appraising employee performance.”

As DOD officials begin working out their strategy for moving ahead, the law also allows them to develop a new system in lieu of transitioning employees to the GS system. Any new system “would be required to guarantee collective bargaining rights and would not be permitted to cover prevailing wage employees,” the law states.

However, if DOD officials do develop a new system, they will likely need to get it approved by OPM, said William Bransford, general counsel for the Senior Executives Association. Simply transitioning back to the GS system also has problems, he added.

“Then what they have to do is find a job classification and grade level that is close to what an employee’s actual job is,” he said. “Some of these jobs have gotten away from the rigid GS classification system, so that could be a challenge.”

As DOD officials begin planning their next step, Palguta said employees should look to their service branch for the specific details on how those plans will be carried out. “They’re going to want to know,” Palguta said.

Despite its ultimate demise, lessons can be gleaned from NSPS, Bransford said. Getting input from all the stakeholders before the system was implemented would have helped, Bransford said.

“And another lesson is to not do these kinds of reforms piecemeal, like what was done with NSPS,” Bransford said. “These reforms should be done within the context of the entire civil service, not by individual agencies creating their own personnel systems.”