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Civilian pay raises become more performance-based

by Senior Master Sgt. Matt Proietti
Secretary of the Air Force Public Affairs

9/19/2007 - WASHINGTON (AFPN) -- Department of Defense officials will use half of a January 2008 government-wide pay increase to adjust base salaries for eligible National Security Personnel System employees.

Remaining funds will be distributed by pay pools based on an assessment of individual employee performance in meeting organization goals. Increases to local market supplements for NSPS employees will mirror the government-wide increases for locality pay.

The change in pay strategy affects more than 39,000 Air Force employees who have already converted to NSPS. Only NSPS employees with acceptable performance ratings are entitled to these adjustments.

NSPS is "critical to the department's overall transformation to a results-oriented, performance-based culture," said Gordon England, the Deputy Secretary of Defense, in a memorandum to senior leaders announcing the decision.

"A primary component of NSPS is the pay-for-performance system that provides the department with the tools necessary to compensate and reward its most valuable asset -- our people," Secretary England said.

For payouts in 2008, all NSPS employees with performance ratings from 2 through 5 based on a 5-point scale will receive a raise in January. Remaining funds will be allocated to the pay pool to distribute based on an evaluation of employee performance.

"The goal of NSPS has always been to move the department to a performance-based culture," said B.J. Barger, deputy director of force management policy. "Secretary England's decision is the next step in giving employees the opportunity to be rewarded for demonstrated performance excellence."

The department has seen much greater communication between supervisors and employees since the new personnel system started, she said.

NSPS was designed to retain the best features of the former system by preserving core principles such as merit principles and veteran's preference, while adding flexibilities needed by managers and supervisors in today's more volatile world, said Deborah Carlton, the Air Force NSPS program manager.

Under NSPS, classification includes pay bands -- broad groupings of occupations based on the work's nature, career patterns and market factors.

The DOD began implemention in April 2006. The first performance-based payouts were made last January, with 97 percent of the covered NSPS workforce receiving a payout, including more than 3,100 Air Force workers. Employees in this initial group were also granted the full regular general schedule pay increase if they had a performance rating of 2 or better.

"One of the basic tenets of NSPS is that employees should be rewarded for the work they do," said Ms. Carlton. "The program is set up to identify performance expectations and requires periodic performance reviews between employees and supervisors during which concerns by either party can be discussed.

"Now that this structure is in place and we have the experiences gained during last year's performance pay cycle, the department is ready to take the next step of linking performance directly to pay increases."

Congress gave DOD the authority to create a flexible performance management system with a requirement to include a pay for performance feature. The system replaces outdated civil service rules with a process to reward and advance employees based on performance results tied to work objectives.

NSPS has given the department the opportunity to refocus on performance, ensuring that its objectives are aligned with its mission, officials said.

The Department of Defense's 17-month-old civilian pay system is being deployed in stages called "spirals." The Air Force converted over 39,000 employees in Spiral 1; these employees will receive NSPS payouts in January. The additional 150 Air Force employees who are scheduled to convert in Spiral 2 will not be affected by this change, since they have not yet received an NSPS performance evaluation.

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