National Security Personnel System Implementation

1. National Security Personnel System Implementation Overview January 8, 2004

2. Key Provisions: Personnel System • Pay banding (simplified job classification) • New performance management system, linking pay to performance • Streamlined, flexible hiring and advancement procedures • Streamlined premium pay • New reduction in force rules, emphasis on performance over longevity • New labor management relations system • New, streamlined employee appeals process

3. Key Provisions: Stand Alone • Voluntary early retirement & separation incentive pay authority (limited to 25K employees per year, not including BRAC) • Elimination of pay offset for rehired annuitants • Appointment authority for up to 2,500 highly qualified experts • Special pay and benefits for certain employees outside the US

4. Constraints • DoD may implement NSPS to 300K employees (the remaining requires certification of performance management system and training) • Ten DoD labs excluded from NSPS (until 2008) • Civilian pay dollars (FY 04 to FY 08) may not be less than would have been allocated under old system (to the extent practicable) • Parity required between civilian/military increases (to the extent practicable) • Design process specified by statute

5. Design Process • NSPS • Job classification • Pay banding • Staffing flexibilities • Pay for performance • “Stand-alone” Provisions • VERA/VSIP authority • Reemployed Annuitants • Experts • Exec pay and performance system BP Labor Management Relations System Employee Appeals (in consultation with MSPB) Work Groups 90 day collaboration Not subject to 90 day collaboration

6. Anticipated Issues • Collaboration strategy with unions • OPM involvement • External oversight/scrutiny (Congress, GAO) • Overcoming negative perception (unions/employee groups, media) • Readiness of HR information systems • Defense Civilian Personnel Data System • Defense Civilian Pay System

7. NSPS Program Office • Est. under DUSD(CPP) • Component & CPMS detail staff • AcqDemo program office migration

8. Critical Tasks • Establish NSPS Program Implementation Office • Develop and execute communications plan • Develop NSPS Policy/Procedural framework • Design labor management relations system • Design employee appeals system • Develop & execute training strategy • Modify HR information systems • Publish guidance

9. Implementation Strategy • Navy, AF, WHS (incl. serviced population), OSD, other Fourth Estate agency (pending input) – first wave • White collar and blue collar (blue collar pay to be addressed separately) • Assumptions (initial 300K) • Accommodate Component preferences (if possible) • Meet criteria for exceeding 300K limit as early as possible • Include SES (pending decision on executive pay and performance system) • Address NAF, LN in second year of implementation • Coordination with Components to refine numbers

10. Communications & Outreach • Website updates • Focus groups • Logo chosen • Communications plan in development

11. Status • Standing up program office, with funding for operations, manpower, and contractor support • Enlisting Component participation and support • Awarded contract for implementation support • Marketing & outreach • Training development • Project support and evaluation • Developing overarching communications plan and materials • Issuing policies for stand-alone provisions