About 187,000 white-collar employees throughout Defense are currently covered under NSPS. Congress cordoned off the department’s 148,000 Wage Grade employees from NSPS as part of the 2008 National Defense Authorization Act.
But the Nov. 4 election could bring a further downsizing of the program, depending on who wins. Sen. Barack Obama, D-Ill., pledged to “substantially revise” or “strongly consider a complete repeal” of NSPS if elected in a Sept. 16 letter to the International Federation of Professional and Technical Engineers.
“I cannot and will not support a pay system which discriminates against employees, and I cannot and will not support a pay system which ultimately is designed to suppress wages for civilian DoD employees over time,” Obama wrote.
Unions have opposed NSPS since it was proposed five years ago, alleging it is discriminatory, that its evaluation system is unfair and not transparent, and that it hurts employees’ salaries by rewarding performance through bonuses instead of pay increases in some cases. Bonuses are not carried over into the next year and do not count toward retirement annuity calculations.
Bunn said that repealing NSPS would likely be difficult, but the next president could easily change some elements of the program if he chooses.
“By the time the administration does change, there will be a couple hundred thousand people operating under NSPS,” Bunn said. “It’s not necessarily a system where you can flip a switch to turn it off. If the leadership wants to review NSPS, then NSPS certainly is flexible enough to change over time.”
The scaling back of NSPS is the latest blow to the Bush administration’s efforts to replace the decades-old General Schedule system with pay-for-performance systems that limit collective bargaining rights.
The Homeland Security Department’s pay-for-performance system was gutted by court rulings and a hostile Congress. Homeland Security officially gave up on the program Oct. 2.
The American Federation of Government Employees said it was glad to see the Pentagon give up on broadening NSPS.
“This is what we’ve been fighting for since January 2004,” said AFGE general counsel Mark Roth. “This is a tremendously flawed, tremendously subjective system.”
As recently as March, an NSPS official said Defense was on track to bring bargaining-unit employees under performance pay. The Defense authorization act also required the Pentagon to negotiate nationally with unions about bringing bargaining-unit employees under NSPS. Bunn’s predecessor, Mary Lacey, predicted in March that the Pentagon would start negotiating with unions this autumn and would bring on the first bargaining-unit employees one year later.
The first employees under NSPS also have shown dissatisfaction with the pay system. A September Government Accountability Office report said Defense surveys in May 2007 found only half of respondents felt their appraisals fairly reflected their performance.
A Federal Times analysis of the results of NSPS’ 2007 performance evaluations and payments, published Aug. 11, found that white employees received higher average performance ratings, salary increases and bonuses than employees of other racial groups. The analysis, based on data obtained through a Freedom of Information Act request, also found that raises and bonuses were sometimes inconsistent with their corresponding performance ratings.
The Pentagon’s decision to stop expanding NSPS means many Defense managers will oversee work forces operating under three different pay systems: the General Schedule, NSPS and the Wage Grade system.
“The difficulty in dealing with so many systems, is that no one knows what the rules are and how to apply them,” said Darryl Perkinson, president of the Federal Managers Association and a Defense manager. “We need to be more consistent so we don’t have as many [pay systems] out there.”
Perkinson hopes the problems NSPS is facing don’t spell the end of performance pay in the federal government.
“I’ve got bargaining-unit employees, and some of them have told me they’d like to see some kind of pay for performance,” Perkinson said.