Science and Technology Reinvention Laboratory Personnel Demonstration Project at the Missile Research, Development, and Engineering Center (MRDEC)

OFFICE OF PERSONNEL MANAGEMENT

Science and Technology Reinvention Laboratory Personnel

Demonstration Project at the Missile Research, Development, and

Engineering Center (MRDEC)

AGENCY: Office of Personnel Management

ACTION: Notice of approval of Demonstration Project Final Plan.

-----------------------------------------------------------------------

SUMMARY: The National Defense Authorization Act for fiscal year 1995

(P.L. 103-337) authorizes the Secretary of Defense, with Office of

Personnel Management (OPM) approval, to conduct a Personnel

Demonstration Project at Department of Defense (DoD) laboratories

designated as Science and Technology Reinvention Laboratories. The

legislation requires that most requirements of Section 4703 of Title 5

shall apply to the demonstration project. Section 4703 requires OPM to

publish the project plan in the Federal Register.

DATES: This demonstration project may be implemented by the MRDEC

September 28, 1997.

FOR FURTHER INFORMATION CONTACT: MRDEC: Dr. William H. Leonard, Special

Assistant for Laboratory Management, Research, Development, and

Engineering Center, U.S. Army Missile Command, ATTN: AMSMI-RD, Redstone

Arsenal, Alabama 35898-5240, 205-876-1442. OPM: Fidelma A. Donahue,

U.S. Office of Personnel Management, 1900 E. Street, NW, Room 7460,

Washington, DC 20415, 202-606-1138.

SUPPLEMENTARY INFORMATION:

1. Overview

Ninety letters and six e-mails were received, and six individuals

commented on the Federal Register notice at the public hearing. These

comments brought several new perspectives to the attention of those

responsible for implementing, overseeing, and evaluating the project.

The comments highlighted instances of miscommunication and

misunderstanding with the present system as well as the project

interventions. Further, they underscored the importance of providing

training to employees and supervisors on the Demonstration Project. The

substance of all comments received has been conveyed to the Center

Directors, the President of AFGE Local 1858, and the MICOM Civilian

Personnel Advisory Center in the event that local policies, processes

and training sessions may benefit from such perspectives. A summary of

all comments received, along with accompanied responses, is provided

below.

A. Step Increase Buy-In

Comments: There were 73 comments (one manager claimed to speak for

77 employees and 58 comments were identical) that expressed concern

over the method of conversion into the demonstration. Employees

preferred to have their accumulated time toward their next within-grade

increase added to their base pay instead of receiving a lump-sum cash

payment. Both employees and union recognized the proposed method does

not provide funds that can be added to employees' base pay, and have a

positive impact on their benefits such as retirement and thrift savings

plans.

Response: This issue has been the subject of negotiations with the

union since the initial development of the proposal. In the

demonstration there will no longer be step increases. The funds that

would have been expended for that purpose will form part of the

Performance Pay Pools for the payout of both performance pay increases

and/or performance bonuses. Each employee converted into the

demonstration will compete during the first performance assessment

period for those funds that would have been paid for step increases.

Thus the strategy developed by the demonstration development team was

to provide a lump sum cash incentive at the implementation of the

demonstration for the time credited to the employee toward what would

have been the employee's next within-grade (step) increase and to

maintain the Performance Pay Pool at the highest value (2%) which could

be supported by historical fiscal data. The MRDEC, in negotiations with

the union, has agreed to convert employees into the demonstration so

that their base pay will be adjusted effective the date of

implementation, by a prorated value based upon the number of weeks an

employee has completed toward the next higher step. Payment will equal

the current value of the employee's next within-grade increase times

the proportion of the waiting period completed at the time of

conversion. Both MRDEC Management and the union recognize that the

demonstration must be guided by the concept of in-house budget

neutrality. Therefore, the MRDEC will reexamine the Payout Factor (F)

at the end of the first assessment period to determine if a payout

factor of 2% was maintained by revised labor rates. If not, then the

factor F must be adjusted prior to the first year payout to compensate

for the early payment of step increases which would have been used to

form the full robust value of the payout factor. These changes are in

Sections III.B (Performance Pay Increases and/or Performance Bonuses)

and V (Conversion to the Demonstration Project).

B. Competitive Area

Comments: There were 73 comments (one manager claimed to speak for

77 employees and 58 comments were identical) that expressed concern

over the revised Reduction-in-Force (RIF) procedures that limit a

competitive area to occupational families in all geographic areas.

These comments came primarily from employees in the Business Management

and E&S Support Occupational Families. Their concerns were two fold:

(1) The inability to bump outside of occupational families and retreat

to a position during a RIF situation that had been previously held that

may be in a different occupational family than that occupied by the

employee, and (2) the reduced number of employees in a particular

occupational family will result in smaller competitive levels which may

lead to more separations from that family if a RIF occurs within the

MRDEC. Three comments recommended that the best solution would be to

put the Missile Command into the demonstration so as to widen the

competitive areas. There was one comment that suggested that

competitive areas be restricted to series rather than occupational

families and to restrict the competitive area to local geographic

areas.

Response: The project designers proposed this intervention as a

means of minimizing the severe turbulence that is normally caused

during a RIF. Since the MRDEC is predominately customer funded, its

vitality and future credibility depend upon a reasonably stable

workforce that is highly trained and motivated to the precepts of

customer service and quality products. This intervention would achieve

the desired goal of minimizing personnel turbulence, but at the same

time it may put some loyal and recently hired employees at an added

risk of separation. For this reason, this issue has been negotiated

with the union, and the project design will be changed to define the

competitive areas as the separate geographic areas of the MRDEC. This

change was made in full recognition that prior to any RIF action being

taken, action will be taken to place affected employees in other parts

of the parent organization and that the provisions of the DoD Stability

of

[[Page 34877]]

Employment Programs (Priority Placement Program) will be used to assist

affected employees. At this time the demonstration cannot be extended

to all of the Missile Command in that the demonstration can only be

conducted in a Science and Technology Reinvention Laboratory, which the

Missile Command is not. The suggestion to define competitive areas

along the lines of series was considered but rejected because the

comment may have reflected confusion between competitive areas and

competitive levels (competitive levels will continue to fall along

series lines). These changes are in Section III.F (Revised Reduction-

In-Force (RIF) Procedures).

C. Supervisory Pay Differentials

Comments: Seventy-one comments (one manager claimed to speak for 77

employees and 58 comments were identical) were received and all but

three requested that supervisory pay differentials be made available to

other than the engineers and scientists occupational family. One

comment questioned whether the differential was an award or a bonus,

one comment expressed concern about the impact of a supervisory

differential on employee pay pools, and one comment recommended

elimination of the supervisory differential.

Response: A supervisory differential is a cash incentive that is

paid on a pay period basis. It is not an award or a performance bonus.

The differential is not automatic and will range in value from 0% to

10% of the supervisor's basic rate of pay. Seven factors are provided

for the Director to consider in determining the value of a

differential. Supervisory differentials were designed to compensate

supervisors who supervise employees that are typically at the same

grade level or higher. This normally occurs at the higher bands in the

E&S Occupational Families. However, in recognition that restricting

supervisory differentials to just the E&S occupational families may be

perceived as an unfair application, the plan will be changed in Section

III.B (Supervisory Pay Differentials) to state that supervisory

differentials may be used, at the discretion of the MRDEC Director, to

incentivize and reward supervisors who are in Paybands III, IV or V in

any occupational family, except for employees in Payband V of the E&S

occupational family. Additionally, the plan is modified in Section

III.B (Supervisory Pay Differentials) to state that supervisory

differentials and supervisory adjustments will not be funded from the

performance pay pools.

D. Performance Evaluation System

Comments: Eleven comments (one manager claimed to speak for 77

employees) were received that raised questions and concerns about the

mechanics of implementing the performance evaluation system and also

about perceived shortcomings of the system. Concerns relating to the

mechanics of implementation include that (1) managers must be timely

with evaluations, (2) peer evaluations may not be useful, (3) three

performance elements need to be added, (4) rating levels be clearly

defined, and (5) the employee to supervisor ratio of about 15:1 should

be waived. With regard to perceived shortcomings, the new system is

very subjective, has no advantages over the existing system, does not

provide fairness, reduces cooperation and teamwork, and does not

provide simplification, according to some commenters. Additionally, one

commenter stated that TAPES could be made to work.

Response: The design team acknowledges that it is imperative for

managers and supervisors to be timely with their evaluations. Oversight

by the Performance Management Board and the use of a critical

supervision/EEO performance element that ``requires timely/appropriate

personnel actions'' will help ensure timeliness. Additionally,

supervisory training will emphasize the importance of timely

evaluations and the consequences of untimeliness on the payout process.

Peer evaluations are in the proposal as an option only, and their use

will be governed by the Personnel Management Board. The recommended

three additional performance elements (empowers his/her personnel,

acquisition streamlining initiatives, and support to the organization)

will not be added since they are considered to be embedded within the

five non-supervisory performance elements or the two supervisory or

management elements. Seven performance elements (five for non-managers)

are considered to be sufficient. No change will be made to the proposal

with regard to rating levels in that they are clearly defined in

Appendix D at four rating levels. The proposal contains no provisions

for changing supervisory ratios.

Like many Performance Evaluation Systems, the proposed intervention

makes appropriate provisions for supervisory judgment. The use of

benchmark performance standards as universal criteria for evaluating

all employees in the demonstration project on any element will lead to

greater fairness and reliability of evaluation, thus reducing the

potential for subjectivity in the evaluation process. These benchmark

performance standards define expected performance at the 100%, 70%, 50%

and unsatisfactory levels, thus assuring a clear definition of expected

performance levels. The use of a performance element which measures

``working relationships'' will assure that employees cooperate and that

teamwork continues and rises to higher levels. The performance

evaluation process is very critical to the pay-for-performance system,

and as such the TAPES process has not necessarily been simplified but

rather redesigned to make it supportive of the pay-for-performance

system. A simplification does exist in that the rating supervisor is

not required to write a justification for an assigned rating of record

other than unsatisfactory.

E. Pay-for-Performance System

Comments: Seventy-six comments (one manager claimed to speak for 77

employees and 58 comments were identical) were received in this area.

Comments included assertions that the 50% rule and the mid-point rule

violate merit system principles, is a prohibited personnel practice and

is arbitrary. Sixty-three comments expressed concern about the

composition and control of pay pools, the source of funds for pay

pools, and the effect of pay pool results on retirement and benefits;

and one comment equated the pay-for-performance system to the

discredited Performance Management Recognition System (PMRS). Two

comments reflected a misunderstanding about whether the general

increase was in the performance and bonus pay pools or not; two

comments stated a desire to keep step increases.

Response: As to the legality of the 50% rule and the mid-point

rule, the MRDEC Personnel Demonstration proposal was reviewed by the

MICOM Legal Office, DoD Office of General Counsel, and the OPM General

Counsel prior to publishing it in the Federal Register on 13 March

1997. The proposal was determined at that time to not violate any merit

system principles, to have clearly avoided any prohibited personnel

practices, and to not have been arbitrary in the design of proposed

personnel practices. The 50% rule and the mid-point rule are

consistently and fairly applied to all employees in the proposed

demonstration. Therefore, the rules meet the test of being fair and

equitable, and are in consonance with merit system principles. The 50%

rule is similar in purpose to the use of longer waiting periods at

higher steps in the General Schedule pay system. The 50%

[[Page 34878]]

rule is not solely a cost containment method, but is also an effort to

retain base pay as an incentive (i.e., to prevent reaching the top of a

band too soon).

Comments regarding the merit system principle of equal pay for work

of equal value (5 U.S.C. 2301(b)(3)) are flawed. The words ``equal pay

for work of equal value'' are intended to ensure that an employee's pay

range is based on an accurate and equitable evaluation of the level of

work for the employee's position. Employees performing at the same

level (as defined by a grade or band) should be paid in the same pay

range. Pay setting within a pay range can properly reflect factors such

as tenure, past performance, and current performance, while ensuring

equal treatment based on those factors. In fact, the latter part of the

equal pay for work of equal value principle (5 U.S.C. 2301(b)(3))

expressly allows for ``Appropriate incentives and recognition * * * for

excellence in performance.''

The proposed demonstration is consistent with the merit system

principles. Bands will be assigned based on employee's nature and level

of work. Pay progression within a band will be based on performance and

contributions over time. To provide enhanced incentives for excellence

in performance, employees will not be allowed to advance beyond the

mid-point of the pay range without an A or B rating. Also, employees

whose pay is beyond the midpoint (because of past performance) will not

be entitled to further base pay increases without an A or B rating. It

is true that the proposed demonstration places more emphasis on

performance than the General Schedule (by design), but that does not

violate merit system principles.

The demonstration proposal attributes clearly change the methods of

providing incentives to employees, including the provision of group or

individual incentive bonuses or pay. This is clearly an allowable

practice in accordance with Title 5 United State Code, chapter 47

Section 4703(a)(1-8). However, there is an assertion that, by changing

the basic rate of pay that an employee may receive, this in effect

changes the benefits defined in Chapter 63 or subpart G of Title 5, and

therefore must be a violation of 4703(c)(1). All parts of Chapter 63 or

subpart G of Title 5 are still intact, and have not been changed by

this proposed demonstration. Changing the method of determining base

pay increases does not change any provision of the retirement system or

any other benefit program.

The Personnel Management Board has been established, with permanent

union membership, with the requirement to define the pay pool structure

that will be used in the demonstration. This structure will be

communicated to employees through a Director's Newsletter prior to

implementation. At the minimum there could be two pay pools; one for

supervisors and one for non-supervisors. The designers of the pay-for-

performance system were well aware of the problems with the PMRS system

and benefited from the lessons learned. The PMRS system structure lent

itself to essentially the creation of a quota system for ratings. The

proposed pay-for-performance system was designed so that managers could

fairly evaluate and provide employee incentives without creating

artificial quota systems for ratings.

The proposal will be revised in Section III.B (Pay-for-Performance)

to clarify that the General Increase will be received by all covered

employees whose rating of record is greater than U. Additionally, the

proposal will be revised in Section III.B (Performance Pay Increases

and/or Performances Bonuses) to state that performance bonuses have no

impact on benefits such as retirement.

F. Paybands and Occupational Families

Comments: Eighty-two comments (three sets of identical comments:

58, 4, and 3) were received in this area. Sixty comments (fifty-eight

identical) recommended moving Budget Assistants (GS-561), Procurement

Clerks (GS-1106), and Management Assistants (GS-344) from the General

Support occupational family to the Business Management occupational

family; move Library Technicians (GS-1411) from the General Support

occupational family to the E&S Support occupational family; and

aligning all Miscellaneous Administrative and Program positions (GS-301

and GS-303) to the appropriate non-E&S occupational families depending

upon the closest alignment. A comment cited the need to include the

series Operations Research Analyst (Cost Analysis) (GS-1515) in the

Business Management occupational family. Four identical comments

expressed agreement with the use of benchmark position descriptions and

one comment liked the payband structure. Four identical comments

expressed concern that the creation of occupational families restricted

movement between occupational families for career development purposes.

Eight comments dealt with the width of Payband III in the E&S

occupational family, removing high grade controls, and the lack of

parity by not having all bands the same width. Two comments expressed

concern that E&S band V would result in job losses and seriously reduce

funds available for employee performance pay pools. One comment

questioned the use of the term ``specific course work'' as a

requirement for the E&S occupational family. One comment stated the

need for a management occupational family.

Response: The suggested occupational series changes are not

considered feasible because the Technical and Business Support paybands

are not compatible with the typical pay range and progression pattern

of those series identified in the comments. The demonstration will not

present barriers to employees who want to cross occupational family

lines for career development purposes. However, the proposal will

clarify in Section V (Personnel Administration) that this barrier does

not exist and that the benchmark position descriptions identify series,

specialty code, and function code. As a result of a Base Realignment

and Closure (BRAC) 95 decision, the proposal will be modified in

Appendix A to include Operations Research Analyst (Cost Analyst) (GS

1515) in the Technical and Business occupational family. The proposed

paybands for engineers and scientists were designed in conjunction with

the union and with consideration given to OPM design guidelines, the

developments of the Acquisition Corps and the definition of critical

Acquisition Corps positions (GS 14 and 15), the designs of the China

Lake experiment (banding of GS 14 and 15), and the job needs of the

MRDEC. A separate management occupational family was considered, but

rejected because the occupational families defined in the proposal

already provide for career progression of managers. High grade controls

are not an OPM or Title 5 authority; therefore, they cannot be affected

by a Title 5 demonstration project. The initial salary of a Payband V

employee comes from general operating budgets and does not adversely

impact allocation of funds to the performance pay pools.

The E&S Support and Business Management families are combined into

one occupational family titled ``Technical and Business Support.'' This

change is portrayed in Section III.A (Paybands) and also in Appendix A.

This proposal modification is a technical change, and is a natural

consequence of changing the MRDEC competitive areas from occupational

families to the separate geographic areas of MRDEC. The new

occupational family has one payband structure and benchmark position

descriptions have been developed for each payband.

[[Page 34879]]

G. Management Issues

Comments: Twenty comments (two identical sets of 4 and 3; and one

manager claimed to speak for 77 employees) were received in this area.

These comments generally addressed: (1) Permanent union membership in

the Personnel Management Board, (2) limited promotion opportunities for

GS-13 engineers and scientists, (3) the inability of the proposal to

solve stated personnel system problems, and (4) management's ability to

fairly implement the demonstration project.

Response: An extensive effort was made with the employees who

submitted comments to clarify their comments and concerns. Section II.H

(Personnel Management Board) is clarified to specify permanent union

membership in the Personnel Management Board.

In regard to promotions and solving personnel system problems,

management literature is replete with theories on what motivates

employees to higher standards of excellence. However, there have been

very few experiments to validate these theories in a large, dynamic

organizational environment over an extended period of time. This

demonstration is a very large scale experiment to assess such

interventions as sabbaticals, degree training for critical skills, a

simplified assignment process to enhance career development through job

rotations, performance pay and bonus increases in many cases without

the need for promotion actions, minimal classification issues, greater

ranges for promotions, and greater ranges for setting entrance

salaries. The evaluation process will endeavor to measure the stated

expected effects and determine improvements not only in personnel

practices, but also to determine if the MRDEC collectively as an

organization produces better science and technology. The demonstration

attributes do offer simplifications in classification, staffing,

compensation, and performance management. For example, hundreds of job

descriptions will be eliminated and replaced by as few as about 30

benchmark position descriptions. The need for promotion considerations

has been reduced by more that 50 percent. The personnel problems faced

by laboratory management are being addressed by both Title 5 changes

and parallel actions involving both Service changes to regulations and

to relief from issues managed by the Office of Management and Budget.

This proposed demonstration is not a total solution, but serves as a

significant building block to evolve to a better personnel system that

is more management and employee friendly.

A few comments questioned the ability of MRDEC supervisors to

competently and fairly implement this personnel experiment. This issue

has been discussed in negotiations with the union as an area of

concern. The negotiated solution to this concern is through training

and employee feedback. Prior to implementing the demonstration,

managers and supervisors will be trained in the added responsibilities

and accountabilities associated with the demonstration interventions.

Additionally, the union will be given an opportunity to describe their

role and function in the demonstration program. MRDEC management and

the union agree that employee feedback to supervisors (in a non-

threatening and not-for-attribution environment) is essential for the

success of this demonstration. Therefore, the proposal is changed in

Section III.B (Performance Scores) to provide an employee feedback

capability.

H. Miscellaneous Comments

Comments: There were ninety-one comments (four identical sets of

58, 4, 3, and 2; and one manager claimed to speak for 77 employees) in

this area. These comments include the following: (1) The proposal

limits employee ability to seek employment elsewhere; (2) the

demonstration supports E&S/E&S Support occupational family positions

only, therefore limit the demonstration to E&S occupational family; (3)

the proposal should extend E&S perks to all occupational families; (4)

the RIF retention points assignment process is unfair; and (5) clarify

the demonstration project purpose.

Response: Section V (Personnel Administration) is changed to

clarify that the proposal does not present barriers to applying for

external jobs and for movement between occupational families for career

development purposes. In the proposal, training for degrees was always

intended to apply to the entire workforce. The proposal will be changed

in Section III.E.2 (Training for Degrees) to clarify that training for

degrees is available for all occupational families. The Expanded

Developmental Opportunity Program (sabbaticals) has been extended in

Section III.E.1 (Expanded Developmental Opportunity Program) to all

occupational families except for the General Support occupational

family. Section III.B (Supervisory Pay Differentials) has been changed

to make supervisory differentials applicable to all occupational

families. The RIF retention point strategy proposed was designed to

reward performance. Sensitivity modeling has demonstrated that this

intervention will achieve the desired effect of retaining high

achievers who have a limited amount of career status. Therefore, this

intervention will be retained.

2. Demonstration Project System Changes

The following is a summary of changes and clarifications in the

project proposal that were of paramount interest to employees:

(1) In Section V (Conversion), the method of converting employees

into the demonstration is changed so that employees' base pay will be

adjusted effective the date of implementation by a prorated value based

upon the number of weeks an employee has completed toward the next

higher step. Payment will equal the value of the employee's next

within-grade increase times the proportion of the waiting period

completed at the time of conversion.

(2) Section III.B (Performance Pay Increases and/or Performance

Bonuses) is changed to reflect that both MRDEC Management and the Union

recognize that the demonstration must be guided by the concept of in-

house budget neutrality. Therefore, the MRDEC will reexamine the Payout

Factor (F) at the end of the first assessment period to determine if a

payout factor of 2% was maintained by revised labor rates.

(3) In Section III.F (Competitive Areas), the project design is

changed to redefine the competitive areas as separate geographic areas

of the MRDEC. Additionally, the method of bumping and retreating is

redefined as follows: ``In the Demonstration Project an employee can

bump to a position held by another employee in a lower subgroup or

tenure group; the position may be no lower than the equivalent of three

GS grades (or appropriate grade intervals) below the minimum GS grade

level of his/her current band. An employee can retreat to a position

held by another employee in the same subgroup who has a lower adjusted

RIF service computation date; the position may be no lower than the

equivalent of three GS grades (or appropriate grade intervals) below

the minimum GS grade level of his/her current band. A preference

eligible with a compensable service-connected disability of 30 percent

or more may retreat to a position equivalent to five GS grades below

the minimum grade level of his/her current band.''

(4) In Section III.A (Paybands) and Appendix A, the proposal is

changed to combine the E&S Support occupational family with the

Business Management

[[Page 34880]]

occupational family to form one occupational family called ``Technical

and Business Support.''

(5) Additionally, editorial and technical changes were made to

correct the final version of the Project.

James B. King,

Director.

Table of Contents

I. Executive Summary

II. Introduction

A. Purpose

B. Problems with the Present System

C. Changes Required/Expected Benefits

D. Participating Organization

E. Participating Employees

F. Labor Participation

G. Project Design

H. Personnel Management Board

III. Personnel System Changes

A. Broadbanding

B. Pay-for-Performance Management System

C. Classification

D. Hiring and Appointment Authorities

E. Employee Development

F. Revised Reduction-in-Force (RIF) Procedures

IV. Training

V. Conversion

VI. Project Duration

VII. Evaluation Plan

VIII. Demonstration Project Costs

IX. Required Waivers to Laws and Regulations

Appendix A: Occupational Series by Occupational Family

Appendix B: Project Evaluation and Oversight

Appendix C: Performance Elements

Appendix D: Benchmark Performance Standards

I. Executive Summary

This project was designed by the Department of the Army, with

participation of and review by the Department of Defense (DoD) and the

Office of Personnel Management (OPM). The purpose of the project is to

achieve the best workforce for the MRDEC mission, adjust the workforce

for change, and improve workforce quality. The MRDEC strives to exceed

the greatest expectations of its many customers. To achieve this, the

MRDEC must be able to balance customer requirements for near-term

technical and scientific products and information with the evolving

capabilities of the workforce. These purposes will be significantly

enhanced by interventions such as training for degrees in critical

skills areas, the contingent employee appointment authority, and the

Voluntary Emeritus Program.

The foundations of this project are based on the concept of linking

performance to pay for all covered positions; simplifying paperwork and

the processing of classification and other personnel actions;

emphasizing partnerships among management, employees, and unions

representing covered employees; and delegating classification and other

authorities to line managers. Additionally, the research intellect of

the MRDEC workforce will be revitalized through the use of expanded

opportunities for employee development. These opportunities will

reinvigorate the creative intellect of the research and development

community.

Development and execution of this project will be in-house budget

neutral, based on a baseline of September 1995 in-house costs and

consistent with the Department of the Army (DA) plan to downsize

laboratories. Army managers at the DoD S&T Reinvention Laboratory sites

will manage and control their personnel costs to remain within

established in-house budgets. An in-house budget is a compilation of

costs of the many diverse components required to fund the day-to-day

operations of a laboratory. These components generally include pay of

people (labor, benefits, overtime, awards), training, travel, supplies,

non-capital equipment, and other costs depending on the specific

function of the activity.

This project will be under the joint sponsorship of the Assistant

Secretary of the Army for Research, Development and Acquisition and the

Assistant Secretary of the Army for Manpower and Reserve Affairs. The

Commander, U.S. Army Materiel Command, will execute and manage the

project. Project oversight within the Army will be achieved by an

executive steering committee made up of top-level executives, co-

chaired by the Deputy Assistant Secretary of the Army for Research and

Technology and the Deputy Assistant Secretary of the Army (Civilian

Personnel Policy)/Director, Civilian Personnel. Oversight external to

the Army will be provided by the Department of Defense and the Office

of Personnel Management.

II. Introduction

A. Purpose

The purpose of the project is to demonstrate that the effectiveness

of Department of Defense (DoD) laboratories can be enhanced by allowing

greater managerial control over personnel functions and, at the same

time, expanding the opportunities available to employees through a more

responsive and flexible personnel system. The quality of DoD

laboratories, their people, and products has been under intense

scrutiny in recent years. This perceived deterioration of quality is

due, in substantial part, to the erosion of control which line managers

have over their human resources. This demonstration, in its entirety,

attempts to provide managers, at the lowest practical level, the

authority, control, and flexibility needed to achieve quality

laboratories and quality products.

B. Problems with the Present System

The MRDEC products contribute to the readiness of U.S. forces and

to the stability of the American economy. To do this, the MRDEC must

acquire and retain an enthusiastic, innovative, and highly educated and

trained workforce, particularly scientists and engineers. The MRDEC

must be able to compete with the private sector for the best talent and

be able to make job offers in a timely manner with the attendant

bonuses and incentives to attract high quality employees. Today,

industry laboratories can make an offer of employment to a promising

new hire before the government can prepare the paperwork necessary to

begin the recruitment process.

Currently, jobs are described using a classification system that is

overly complex and specialized. This hampers a manager's ability to

shape the workforce and match the positions while making best use of

employees. Managers must be given local control of positions and their

classification to move both their employees and vacancies within their

organization to other lines of the business activities to match the

life cycle needs of supported customers.

These issues work together to hamper supervisors in all areas of

human resource management. Hiring restrictions and overly complex job

classifications, coupled with poor tools for rewarding and motivating

employees and a system that does not assist managers in removing poor

performers builds stagnation in the workforce and wastes valuable time.

C. Changes Required/Expected Benefits

This project is expected to demonstrate that a human resource

system tailored to the mission and needs of the MRDEC will result in:

(a) Increased quality in the total workforce and the products they

produce; (b) increased timeliness of key personnel processes; (c)

increased retention of high quality employees and separation rates of

poor quality employees; and (d) increased customer satisfaction with

the MRDEC and its products by all customers it serves.

The MRDEC demonstration program builds on the successful features

of

[[Page 34881]]

demonstration projects at China Lake and the National Institute of

Standards and Technology (NIST). These demonstration projects have

produced impressive statistics on the job satisfaction for their

employees versus that for the federal workforce in general. Therefore,

in addition to expected benefits mentioned above, the MRDEC

demonstration expects to find more satisfied employees on many aspects

of the demonstration including pay equity, classification decisions,

and career development opportunities. A full range of measures will be

collected during project evaluation (Section VII).

D. Participating Organization

MRDEC has approximately 1881 employees covered by the project.

Approximately 99 percent of the employees are located at Redstone

Arsenal, Alabama, with the remaining located at the following sites:

Andover, Massachusetts; Eglin AFB, Florida; Orlando, Florida; Dallas,

Texas; White Sands Missile Range, New Mexico; Camden, Arkansas; Los

Angeles, California; Washington, DC; Fort Benning, Georgia; Hampton,

Virginia; and Kwajalein Island.

E. Participating Employees

The demonstration project includes civilian appropriated funded

employees in the competitive and excepted service paid under the

General Schedule (GS) pay system. Scientific and Professional (ST)

employees and positions will be included for employee development,

performance appraisal, and award provisions only; their classification,

staffing, and compensation, however, will not change. Senior Executive

Service employees and positions, Federal Wage System employees, and

employees in the Quality Assurance Specialist (Ammunition Surveillance)

(QASAS) career program will not be covered in the demonstration

project. Additionally, DA interns will not be converted to the

demonstration until they complete their intern program. Personnel added

to the laboratory after implementation, in like positions covered by

the demonstration (either through appointment, promotion, reassignment,

change to a lower grade or where their functions and positions have

been transferred into the laboratory) will be converted to the

demonstration project. Successor organizations which may result from

actions associated with the 1995 Base Realignment and Closure

Commission (BRAC) or future Commissions will continue coverage in the

demonstration project.

F. Labor Participation

The American Federation of Government Employees (AFGE) represents

many GS employees at MRDEC. The MRDEC is continuing to fulfill its

obligations to consult and/or negotiate with the AFGE, in accordance

with 5 U.S.C. 4703(F) and 7117. The participation with the AFGE is

within the spirit and intent of Executive Order 12871.

The AFGE represents all professional and non-professional employees

except those who are supervisors or managers. AFGE Local 1858 has been

involved with and has participated in the development of the project

since its inception. The union is an integral part of this personnel

demonstration, and will be a full partner in arriving at major

decisions involving program implementation.

G. Project Design

An Integrated Process Team approach was used at the U.S. Army

Missile Command to develop the attributes of this personnel

demonstration proposal. The team was lead by MRDEC management, and team

members came from managers and associates from the MRDEC, AFGE Local

1858, the Civilian Personnel Office, and several other major functional

organizations within the Missile Command.

This personnel system design has been subjected to critical reviews

by Executive Steering Groups within the MRDEC and the Missile Command.

Additionally, negotiations with AFGE Local 1858 have influenced the

design in areas of significant concern to bargaining unit employees. A

survey, designed by AFGE Local 1858, was conducted to elicit MRDEC

employee opinions and preferences on key features of the proposal.

The design was preceded by an exhaustive study of broadbanding

systems currently practiced in the Federal sector. A first generation

design was briefed to the MRDEC workforce with the assistance of AFGE

Local 1858. During these briefing sessions, employees were provided a

copy of the first generation proposal, a set of anticipated questions

and answers, and a list of points of contact for concerns and

questions. Later design generations have evolved from critical reviews

by headquarters elements of the Department of the Army, Department of

Defense, and the Office of Personnel Management. Additionally,

consultation was provided by the designers of the broadbanding systems

practiced by the Navy China Lake experiment and the National Institute

of Standards and Technology.

H. Personnel Management Board

The MRDEC intends to establish an appropriate balance between the

personnel management authority and accountability of supervisors and of

the oversight responsibilities of a Personnel Management Board (PMB).

The Director will delegate management and oversight of the Project at

MRDEC to a Personnel Management Board whose members, Chairperson, and

staff (other than the union and Equal Employment Opportunity Office

members) will be appointed by the Director. The union and the Equal

Employment Opportunity Office will have permanent membership in the

PMB, and their representatives will be selected by the respective

organizations. The establishment of this Board shall not affect the

authority of any management official in the exercise of their

management rights set forth in 5 U.S.C. 7106(b)(1). The PMB will be

tasked with the following:

1. Overseeing the civilian pay budget,

2. Determining the composition of the pay-for-performance pay pools

in accordance with the guidelines of this proposal and internal

procedures,

3. Administering funds allocation to pay pool managers,

4. Reviewing operation of MRDEC pay pools,

5. Reviewing hiring and promotion salaries as well as exceptions to

pay-for-performance salary increases,

6. Providing guidance to pay pool managers,

7. Monitoring award pool distribution by organization or any other

special categorization,

8. Selecting participants for the Expanded Developmental

Opportunity Program, long term training, and any special developmental

assignments,

9. Managing promotions to stay within ``high grade'' controls,

10. Addressing in-house budget neutrality issues to include

tracking of average salaries,

11. Assessing the need for changes to demonstration procedures and

policies.

III. Personnel System Changes

A. Broadbanding

Occupational Families

Occupations at the MRDEC will be grouped into occupational

families. Occupations will be grouped according to similarities in type

of work, customary requirements for formal training or credentials, and

in consideration of the business practices at the MRDEC. The common

patterns of advancement within the occupations as

[[Page 34882]]

practiced at DoD Laboratories and in the private sector will also be

considered. The current occupations and grades have been examined, and

their characteristics and distribution have served as guidelines in the

development of the three occupational families described below:

1. Engineers and Scientists (E&S). This occupational family

includes all technical professional positions, such as engineers,

physicists, chemists, metallurgists, mathematicians, and computer

scientists. Predominantly, specific course work or educational degrees

are required for these occupations.

2. Technical and Business Support. This occupational family

contains positions that directly support the E&S mission: it includes

specialized functions in such fields as technical information

management, librarians, equipment specialists, quality assurance,

engineering and electronics technicians, finance, accounting,

administrative computing, and management analysis.

Employees in these jobs may or may not require college course work.

Analytical ability and specialized knowledge in administrative fields

are required. Knowledge of and training in the various electrical,

mechanical, chemical, or computer principles, methods, and techniques

are also generally required.

3. General Support. This occupational family is composed of

positions for which minimal formal education is needed, but for which

special skills, such as office automation or shorthand, are usually

required. Clerical work usually involves the processing and maintenance

of records. Assistant work requires knowledge of methods and procedures

within a specific administrative area. Other support functions include

the work of secretaries, guards, and mail clerks.

Paybands

Each occupational family will be composed of discrete paybands

(levels) corresponding to recognized advancement within the

occupations. These paybands will replace grades. They will not be the

same for all occupational families. Each occupational family will be

divided into four to five paybands; each payband covering the same pay

range now covered by one or more grades. A salary overlap, similar to

the current overlap between GS grades, will be maintained.

Ordinarily an individual will be hired at the lowest salary in a

payband. Exceptional qualifications, specific organizational

requirements, or other compelling reasons may lead to a higher entrance

level within a band.

The proposed paybands for the occupational families and how they

relate to the current GS grades are shown in Figure 1. Application of

the Fair Labor Standards Act (FLSA) within each payband is also shown

in Figure 1. This payband concept has the following advantages:

1. It may reduce the number of classification decisions required

during an employee's career.

2. It simplifies the classification decision-making process and

paperwork. A payband covers a larger scope of work than a grade, and

will be defined in shorter and simpler language.

3. It supports delegation of classification authority to line

managers.

4. It provides a broader range of performance-related pay for

each level. In many cases, employees whose pay would have been

frozen at the top step of a grade will now have more potential for

upward movement in the broader payband.

5. It prevents the progression of low performers through a

payband by mere longevity, since job performance serves as the basis

for determining pay.

The MRDEC paybanding plan expands the paybanding concept used at

China Lake and NIST by creating Payband V of the Engineers and

Scientists occupational family. This payband is designed for Senior

Scientific Technical Managers.

Current legal definitions of Senior Executive Service (SES) and

Scientific and Professional (ST) positions do not fully meet the needs

of MRDEC. The SES designation is appropriate for executive level

managerial positions whose classification exceeds the GS-15 grade

level. The primary knowledges and abilities of SES positions relate to

supervisory and managerial responsibilities. Positions classified as ST

are reserved for bench research scientists and engineers; these

positions require a very high level of technical expertise and they

have little or no supervisory responsibility.

MRDEC currently has several positions, typically directorate/office

chiefs, that have characteristics of both SES and ST classifications.

Most directorate/office chiefs in MRDEC are responsible for supervising

other GS-15 positions, including function chiefs, non-supervisory

research engineers and scientists and, in some cases, ST positions.

Most directorate/office chief positions are classified at the GS-15

level, although their technical expertise warrants classification

beyond GS-15. Because of their management responsibilities, these

individuals are excluded from the ST system. Because of management

considerations, they cannot be placed in the SES. Management considers

the primary requirement for directorate/office chiefs to be knowledge

of, and expertise in, the specific scientific and technology areas

related to the mission of their directorates/offices. Historically,

incumbents of these positions have been recognized within the community

as scientific and engineering leaders, who possess primarily

scientific/engineering credentials and are considered experts in their

field. However, they must also possess strong managerial and

supervisory abilities. Therefore, although some of these employees have

scientific credentials that might compare favorably with ST criteria,

classification of these positions as STs is not an option, because the

managerial and supervisory responsibilities inherent in the positions

cannot be ignored.

The purpose of Payband V (which will reinforce the equal pay for

equal work principle) is to solve a critical classification problem. It

will also contribute to an SES ``corporate culture'' by excluding from

the SES positions for which technical expertise is paramount. Payband V

proposes to overcome the difficulties identified above by creating a

new category of positions, the Senior Scientific Technical Manager,

which has both scientific/technical expertise and full managerial and

supervisory authority.

Current GS-15 directorate/office chiefs will convert into the

demonstration project at Payband IV. After conversion they will be

reviewed against established criteria to determine if they should be

reclassified to Payband V. Other positions possibly meeting criteria

for classification to Payband V will be reviewed on a case by case

basis. The proposed salary range is a minimum of 120% of the minimum

rate of basic pay for GS-15 with a maximum rate of basic pay

established at the rate of basic pay (excluding locality pay) for SES

level 4 (ES-4). Vacant positions in Payband V will be competitively

filled to ensure that selectees are preeminent researchers and

technical leaders in the specialty fields who also possess substantial

managerial and supervisory abilities. MRDEC will capitalize on the

efficiencies that can accrue from central recruiting by continuing to

use the expertise of the Army Materiel Command SES Office as the

recruitment agent.

Panels will be created to assist in filling Payband V positions.

Panel members will be selected from a pool of current MRDEC SES

members, ST employees, and later those in Payband V, and an equal

number of individuals

[[Page 34883]]

of equivalent stature from outside the laboratory to ensure

impartiality, breadth of technical expertise, and a rigorous and

demanding review. The panel will apply criteria developed largely from

the current OPM Research Grade Evaluation Guide for positions exceeding

the GS-15 level.

DoD will test the establishment of Payband V for a five-year

period. Positions established in Payband V will be subject to

limitations imposed by OPM and DoD. Payband V positions will be

established only in an S&T Reinvention Laboratory which employs

scientists, engineers, or both. Incumbents of Payband V positions will

work primarily in their professional capacity on basic or applied

research and secondarily perform managerial or supervisory duties. The

number of Payband V positions within the Department of Defense will not

exceed 40. These 40 positions will be allocated by ASD (FMP), DoD, and

administered by the respective Services. The number of Payband V

positions will be reviewed periodically to determine appropriate

position requirements. Payband V position allocations will be managed

separately from SES, ST, and SL positions. An evaluation of the Payband

V concept will be performed during the fifth year of the demonstration

project.

The final component of Payband V is the management of all Payband V

assets. Specifically, this authority will be exercised at the DA level,

and includes the following: authority to classify, create, or abolish

positions within the limitations imposed by OPM and DoD; recruit and

reassign employees in this payband; set pay and to have their

performance appraised under this project's Pay for Performance System.

The laboratory wants to demonstrate increased effectiveness by gaining

greater managerial control and authority, consistent with merit,

affirmative action, and equal employment opportunity principles.

BILLLING CODE 6325-01-U

[GRAPHIC] [TIFF OMITTED] TN27JN97.009

BILLING CODE 6325-01-C

Fair Labor Standards Act

Fair Labor Standards Act (FLSA) exemption and nonexemption

determinations will be made consistent with criteria found in 5 CFR

part 551. There are six paybands (see Figure 1) where employees can be

either exempt or nonexempt from overtime provisions. For these six

paybands supervisors with classification authority will make the

determinations on a case-by-case basis by comparing the duties and

responsibilities assigned, the classification standards for each

payband, and the FLSA criteria under 5 CFR part 551. Additionally, the

advice and assistance of the Civilian Personnel Advisory Center/

Civilian Personnel Operations Center (CPAC/CPOC) will be obtained in

making determinations as part of the performance review process. The

benchmark position descriptions will not be the sole basis for the

determination. Basis for exemption will be documented and attached to

each description. Exemption criteria will be narrowly construed and

applied only to those employees who clearly meet the spirit of the

exemption. Changes will be documented and provided to the CPAC/CPOC, as

appropriate.

Simplified Assignment Process

Today's environment of downsizing and workforce transition mandates

that the MRDEC have increased flexibility to assign individuals.

Broadbanding can be used to address this need. As a result of the

assignment to a particular level descriptor, the organization will have

increased flexibility to assign an employee, without pay change, within

broad descriptions consistent with the needs of the organization, and

the individual's qualifications and rank or level. Subsequent

assignments to projects, tasks, or functions anywhere within the

organization requiring the same level and area of expertise, and

qualifications would not constitute an assignment outside the scope or

coverage of the current level descriptor.

Such assignments within the coverage of the generic descriptors are

accomplished without the need to process a personnel action. For

instance,

[[Page 34884]]

a technical expert can be assigned to any project, task, or function

requiring similar technical expertise. Likewise, a manager could be

assigned to manage any similar function or organization consistent with

that individual's qualifications. This flexibility allows a broader

latitude in assignments and further streamlines the administrative

process and system.

Promotion

A promotion is a move of an employee to (1) a higher payband in the

same occupational family or (2) a payband in another occupational

family in combination with an increase in the employee's salary.

Positions with known promotion potential to a specific band within an

occupational family will be identified when they are filled. Not all

positions in an occupational family will have promotion potential to

the same band. Movement from one occupational family to another will

depend upon individual knowledge, skills, and abilities, and needs of

the organization.

Promotions will be processed under competitive procedures in

accordance with merit principles and requirements and the local merit

promotion plan. The following actions are excepted from competitive

procedures:

(a) Re-promotion to a position which is in the same payband and

occupational family as the employee previously held on a permanent

basis within the competitive service.

(b) Promotion, reassignment, demotion, transfer or reinstatement to

a position having promotion potential no greater than the potential of

a position an employee currently holds or previously held on a

permanent basis in the competitive service.

(c) A position change permitted by reduction in force procedures.

(d) Promotion without current competition when the employee was

appointed through competitive procedures to a position with a

documented career ladder.

(e) A temporary promotion, or detail to a position in a higher

payband, of 180 days or less.

(f) Reclassification to include impact of person on-the-job

promotions.

(g) A promotion resulting from the correction of an initial

classification error or the issuance of a new classification standard.

(h) Consideration of a candidate not given proper consideration in

a competitive promotion action.

(i) Impact of person on the job and Factor IV process (application

of the Research Grade Evaluation Guide, Equipment Development Grade

Evaluation Guide, Part III, or similar guides) promotions.

Link Between Promotion and Performance

Career ladder promotions and promotions resulting from the addition

of duties and responsibilities are examples of promotions that can be

made noncompetitively. Promotions can be made noncompetitively when

contributions and achievements are such that a higher payband is

achieved when comparing the overall position to the Equipment

Development Grade Evaluation Guide, Part III or the Research Grade

Evaluation Guide. To be promoted noncompetitively from one band to the

next, an employee must meet the minimum qualifications for the job and

have a current performance rating of B or better (see Performance

Evaluation) or equivalent under a different performance management

system. Selection of employees through competitive procedures will

require a current performance rating of B or better.

B. Pay-for-Performance Management System

Performance Evaluation

Introduction

The performance evaluation system will link compensation to

performance through annual performance appraisals and performance

scores. The performance evaluation system will allow optional use of

peer evaluation and/or input from subordinates as determined

appropriate by the Personnel Management Board. The system will have the

flexibility to be modified, if necessary, as more experience is gained

under the project.

Performance Objectives

Performance objectives are statements of job responsibilities based

on the work unit's mission, goals and supplemental benchmark position

descriptions. Employees and supervisors will jointly develop

performance objectives which will reflect the types of duties and

responsibilities expected at the respective pay level. In case of

disagreements, the decision of the supervisor will prevail. Performance

objectives deal with outputs and outcomes of a particular job. The

performance objectives, representing joint efforts of employees and

their rating chains, should be in place within 30 days from the

beginning of each rating period.

Performance Elements

Performance elements are generic attributes of job performance,

such as technical competence, that an employee exhibits in performing

job responsibilities and associated performance objectives. New

performance elements and rating forms will be designed to implement a

new scoring and rating system. The new performance evaluation system

will be based on critical and non-critical performance elements defined

in Appendix C. Each performance element is assigned a weight between a

specified range. The total weight of all elements is 100 points. The

supervisor assigns each element some portion of the 100 points in

accordance with its importance for mission attainment. As a general

rule, essentially identical positions will have the same critical

elements and the same weight. These weights will be developed along

with employee performance objectives.

Mid-Year Review

A mid-year review between a supervisor and employee will be held to

determine whether objectives are being met and whether ratings on

performance elements are above an unsatisfactory level. Performance

objectives should be modified as necessary to reflect changes in

planning, workload, and resource allocation. The weights assigned to

performance elements may be changed if necessary. Additional reviews

may be held as deemed necessary by the supervisor or requested by the

employee. The supervisor will provide periodic feedback to the employee

on their level of performance. If the supervisor determines that the

employee is not performing at an acceptable level on one or more

elements, the supervisor must alert the employee and document the

problem(s). This feedback will be provided at any time during the

rating cycle.

Employee Feedback to Supervisors

Employee feedback to supervisors (in a non-threatening and not-for-

attribution environment) is considered essential for the success of

this demonstration. A feedback process will be developed and

implemented within six months after implementation of the

demonstration. The employee feedback will be for the supervisors'

information only, and will not be a factor in determining annual

ratings of record. Additionally, the individual supervisor ratings will

be aggregated into a summary for the Director's use (with copies

furnished to the union) in assessing the quality of supervision

[[Page 34885]]

provided and to take whatever steps are needed in supervisory training

and development.

Performance Appraisal

A performance appraisal will be scheduled for the final weeks of

the annual performance cycle, although an individual performance

appraisal may be conducted at any time after the minimum appraisal

period of 120 days is met. The performance appraisal process brings

supervisors and employees together for formal discussions on

performance and results in (1) written appraisals, (2) performance

ratings, (3) performance scores, and (4) other individual performance-

related actions as appropriate. A performance appraisal shall consist

of two meetings held between employee and supervisor: the performance

review meeting and the evaluation feedback meeting.

Performance Review Meeting Between Employee and Supervisor

The review meeting is to discuss job performance and

accomplishments. Supervisors will not assign performance scores or

performance ratings at this meeting. The supervisor notifies the

employee of the review meeting in time to allow the employee to prepare

a list of accomplishments. Employees will be given an opportunity at

the meeting to give a personal performance assessment and describe

accomplishments. The supervisor and employee will discuss job

performance and accomplishments in relation to performance elements and

performance objectives.

Evaluation Feedback Meeting Between Employee and Supervisor

In this second meeting between employee and supervisor, the

supervisor informs the employee of management's appraisal of the

employee's performance on performance objectives, and the employee's

performance score and rating on performance elements. During this

second meeting, the supervisor and employee will discuss and document

performance objectives for the next rating period.

Performance Scores

The overall score is the sum of individual performance element

scores. Employees will receive an academic-type rating of A, B, C, or U

depending upon the score attained. These summary ratings are

representative of pattern E (a 4 level system) in summary level chart

in 5 CFR 430.208(d)(1). This rating will become the rating of record,

and only those employees rated C or higher will receive general

increases, performance pay increases (i.e., basic pay increases), and/

or performance bonuses. A rating of A will be assigned for scores from

85 to 100 points, B for scores from 70 to 84, C for scores from 50 to

69, and U for scores from 0 to 49 or a failure to achieve at the 50%

level of any critical element. The academic-type ratings will be used

to determine performance payouts and to award additional RIF retention

years as follows:

------------------------------------------------------------------------

RIF

Rating Compensation retention

yrs added

------------------------------------------------------------------------

A................................... 4 shares + c *......... 10

B................................... 2 shares + c *......... 7

C................................... 1 share + c *.......... 3

U................................... 0...................... 0

------------------------------------------------------------------------

* c = GS General Increase (Title 5, Section 5303). Pay increases for

employees receiving retained rates will be determined in accordance

with 5 U.S.C. 5363 except that those with a U rating will receive no

pay increase.

Selection of the weighted points to assign to an employee's

performance on performance elements is assisted by use of benchmark

performance standards (Appendix D). These benchmark performance

standards are modified versions of the performance standards used by

the National Institute of Standards and Technology (NIST), National

Bureau of Standards. Each benchmark performance standard describes the

level of performance associated with a particular point on a rating

scale. Supervisors may add supplemental standards for employees they

supervise to further elaborate the benchmark performance standards.

Performance-Based Actions

MRDEC will implement a process to deal with poor performers. This

process may lead to involuntary separations, with grievance or appeal

rights. The process may start at any time during the rating period, not

necessarily at the end of an appraisal period. This process begins when

the supervisor identifies a deficiency(ies) which causes the level of

performance to be at the U (unsatisfactory) level based on a composite

score that is less than 50 for all elements or a score on any critical

element of less than 50 percent.

When the employee's performance is determined to be unsatisfactory

at the close of the annual rating period, the Unsatisfactory (U) rating

will become the rating of record for all matters relating to pay or

Reduction-in-Force (RIF).

There are two processes to deal with poor performers:

1. Change in Assignment--Because it is recognized that employees

may be assigned to a position for which they are not suited, an attempt

will be made to place poor performers in a position better suited to

their skills and capabilities. The offer of change in assignment will

be contingent upon the employee's concurrence and will be either within

the same band or in the next lower payband. If reassigned, the employee

will receive written notification that they will be given a reasonable

opportunity period of no less than thirty (30) calendar days in length,

to demonstrate performance at a level that is at least equal to that of

a summary level C rating. The period of time considered to be

reasonable will be determined, in part, by whether the employee's

reassignment is to a substantially similar or the same position under a

different supervisor, or in a different office, or in a substantially

different position. Essential training and mentoring will be provided

as appropriate during this opportunity period. Failure to achieve a

level of performance that is at least equal to that of a summary level

C rating (following the above-referenced opportunity period) will place

the employees in Step 3 of this process. There will be no further

opportunity period.

2. Performance Improvement Plan (PIP)--If the employee does not

accept an offer of change in assignment, or if there is no appropriate,

available position to assign an employee, the supervisor will develop a

PIP that will be monitored for a reasonable period of time (no less

than 30 calendar days). When an employee is placed in a PIP, the

employee will be informed in writing, that unless their level of

performance improves to, and is sustained at a level at least equal to

that of a summary level C rating, the employee may be removed from the

position (change in assignment, reduction in pay, or removal from the

Federal service).

If, during or at the conclusion of the PIP, the employee's level of

performance improves to a level at least equal to that of a summary

level C rating and is again determined to deteriorate to below level C

in any area during one year from the beginning of the PIP, the MRDEC

may initiate action to remove the employee from the position with no

additional opportunity to improve. An employee whose level of

performance improves to a level at least equal to that of a summary

level C rating for one year from the beginning of the PIP, and then

deteriorates to below level C again, in any area, during succeeding

rating periods, will be placed in a second PIP before initiating action

to remove the employee from the position.

[[Page 34886]]

If and when performance improves during the period in which the

employee is otherwise ineligible for the general increase, then the

general increase shall be restored. Such restoration is not retroactive

and is separate and apart from incentive pay.

3. Removal--If the employee fails to demonstrate a level of

performance at least equal to that of a summary level C rating after

completing either Step 1 or Step 2, the employee will be given a

written notice of proposed removal from the position. The notice period

will be a minimum of 30 calendar days and the employee will have a

reasonable period of time in which to reply. The employee will be given

a written notice of decision to include all applicable grievance and

appeal rights.

Note: Performance-based adverse actions may be taken under 5

U.S.C. Chapter 75, rather than Chapter 43.

A decision to remove an employee for poor performance may be based

only on those instances of poor performance that occurred during the

opportunity period (Step 1) or during the one-year period ending on the

date of proposed removal (Step 2). The notice of decision will specify

the instances of poor performance on which the action is based and will

be given to the employee at or before the time the action will be

effective.

The MRDEC will preserve all relevant documentation concerning an

action taken for poor performance and make it available to review by

the affected employee or designated representative. At a minimum, the

record will consist of a copy of the notice of proposed action; the

employee's written reply, if provided, or a summary if the employee

makes an oral reply. Additionally, the record will contain the written

notice of decision and the reasons therefore, along with any supporting

material including documentation regarding the opportunity afforded the

employee to demonstrate improved performance. An employee who sustains

their performance at a level at least equal to a summary level C rating

for one year, will have all relevant documentation removed from their

record.

Employee Relations

Employees covered by the project will be evaluated under a

performance evaluation system that affords grievance or appeal rights

comparable to those provided currently.

Senior Executive Service and 5 U.S.C. 3104 (ST) Employees

Members of the SES will remain under the current SES performance

appraisal system. Title 5 U.S.C. 3104 (ST) employees will be included

in the project performance evaluation system, but will not be in the

project pay-for-performance system.

Awards

The MRDEC currently has an extensive awards program consisting of

both internal and external awards. On-the-spot, special act (which are

both performance related and nonperformance related), and other

internal awards (both monetary and nonmonetary) will continue under the

project, and may be modified or expanded as appropriate. MACOM, DA, and

DoD awards and other honorary noncash awards will be retained.

Teams may distribute an award pool among themselves where

appropriate. Thus, a team leader or supervisor may allocate a sum of

money to a team for outstanding completion of a special task, and the

team may decide the individual distribution of the total dollars among

themselves.

The MRDEC Director will have the authority to grant awards to

covered employees of up to $10,000 for a special act. The scale of the

award will be determined using criteria in AR 5-17. AFGE Local 1858

will be notified and provided an opportunity to comment on proposed

special act awards for bargaining unit employees before the effective

date of the award. The name of proposed special act awardees will not

be released to the union for privacy act purposes.

Members of the SES will remain under their current awards system

and will not participate in the project performance recognition bonus

awards program. Title 5 U.S.C. 3104 (ST) employees will be eligible for

cash awards.

Pay Administration

Introduction

The objective is to establish a pay system that will improve the

ability of the MRDEC to attract and retain quality employees. The new

system will be a pay-for-performance system and, when implemented, will

result in a redistribution of pay resources based upon individual

performance. The first performance payout will be made effective with

the first full pay period of FY 1999 (October 1998). Future pay

adjustments will be effective at the beginning of the first full pay

period of subsequent fiscal years. General increase payouts in January

1998 will be provided to all covered employees regardless of their

rating of record or current performance status.

Pay-for-Performance

MRDEC will use a simplified performance appraisal system that will

permit both the supervisor and the employee to focus on quality of the

work. The proposed system will permit the manager/supervisor to base

incentive pay increases entirely on performance or value added to the

goals of the organization. This system will allow managers to withhold

pay increases from nonperformers, thereby giving the nonperformer the

incentive to improve performance or leave government service. For

example, employees with ratings of U will receive no performance pay

increase, general increase, or performance bonus. This action may

result in the employee's pay falling below the minimum rate of their

current payband because the minimum rate is increased by the general

increase (5 U.S.C. 5303). Under these transitory conditions, the

employee's payband designator will remain the same. Since there is no

reduction in band level or pay, there is no adverse action.

Pay for performance has two components: performance pay increases

and/or performance bonuses. The basic rates of pay used in computing

the pay pool and performance payouts exclude locality pay. All covered

employees will be given the full amount of locality pay adjustments

when they occur regardless of performance. Additionally, all covered

employees who have a rating of record above U will receive a full

general increase, except that employees receiving retained rates will

receive a pay increase in accordance with 5 U.S.C. 5363. The funding

for performance pay increases and/or performance bonuses is composed of

money previously available for within-grade increases, quality step

increases, promotions from one grade to another where both grades are

now in the same payband, and for some performance awards. Additionally,

funds will be obtained from performance pay increases withheld for poor

performance (see Performance Evaluation ).

Performance Pay Pool

The performance pay pool is composed of a base pay fund and a bonus

pay fund. The payouts made to employees from the performance pay pool

will be a mix of base pay increases and bonus payments, subject to the

amounts available in the respective funds.

The funding for the base pay fund is composed of money previously

available for within-grade increases, quality step increases, and

promotions between grades that are banded under

[[Page 34887]]

the demonstration project. The bonus pay fund is separately funded

within the constraints of the organization's overall performance award

budget. Some portion of the performance award budget will be reserved

for special ad hoc awards--e.g., suggestion awards or special act

awards--and will not be included as part of the performance pay pool.

The MRDEC Center Support Office, in consultation with AFGE Local

1858 and supporting personnelists, will calculate the total performance

pay pool funds and allocate pay pools prior to implementation to Major

Organizational Units or teams as appropriate.

Performance Pay Increases and/or Performance Bonuses

A pay pool manager is accountable for staying within pay pool

limits. The pay pool manager assigns performance pay increases and/or

performance bonuses to individuals on the basis of an academic-type

rating, the value of the performance pay pool resources available, and

the individual's current basic rate of pay within a given payband. A

pay pool manager may request approval from the Personnel Management

Board (PMB) or its designee to grant a performance pay increase to an

employee that is higher than the compensation formula for that employee

to recognize extraordinary achievement or to provide accelerated

compensation for local interns.

Performance payouts will be calculated for each individual based

upon a performance pay pool value that will be initially 3 percent

(e.g., 2.0% performance pay + 1.0% performance bonus) of the combined

basic rates of pay of the assigned employees.

This percentage, a payout factor, will be adjusted as necessary to

compensate for changing employee demographics which impact the elements

used in the GS system, such as the amount of step raises, quality step

increases, and promotions. The MRDEC will reexamine the payout factor

(F) at the end of the first assessment period to determine if a payout

factor of 2% was maintained by revised labor rates. If not, then the

factor F must be adjusted prior to the first year payments to

compensate for the early payment of step increases which would have

been used to form the full robust value of this factor. Performance

payouts will be calculated so that a pay pool manager will not exceed

the resources that are available in the pay pool. An employee's

performance payout is computed as follows:

[GRAPHIC] [TIFF OMITTED] TN27JN97.010

Where: Pool Value=F * SUM (SALk); k=1 to n

n=Number of employees in pay pool

N=Number of shares earned by an employee based on their performance

rating (0 to 4)

SAL=An individual's basic rate of pay

SUM=The summation of the entities in parenthesis over the range

indicated

F=Payout Factor

Once the individual performance payout amounts have been

determined, the next step is to determine what portion of each payout

will be in the form of a base pay increase as opposed to a bonus

payment. A base pay share factor is derived by dividing the amount of

the base pay fund by the amount of the total performance pay pool. This

factor is multiplied by the individual performance payout amounts to

derive each individual's projected base pay increase. Certain employees

will not be able to receive the projected base pay increase due to base

pay caps. Base pay is capped when an employee reaches the maximum rate

of pay in an assigned payband, when the midpoint principle applies (see

below), and when the 50 percent rule applies (see below). Also, for

employees receiving retained rates above the applicable payband

maximum, the entire performance payout will be in the form of a bonus

payment.

If the organization determines it is appropriate, it may reallocate

a portion (up to the maximum possible amount) of the unexpended base

pay funds for capped employees to uncapped employees. This reallocation

must be made on a proportional basis so that all uncapped employees

receive the same percentage increase in their base pay share (unless

the reallocation adjustment is limited by a pay cap). Any dollar

increase in an employee's projected base pay increase will be offset,

dollar for dollar, by an accompanying reduction in the employee's

projected bonus payment. Thus, the employee's total performance payout

is unchanged.

A midpoint principle will be used to determine performance pay

increases. This principle requires that employees in all paybands must

receive a B rating or higher to advance their basic rate of pay beyond

the midpoint dollar threshold of their respective paybands. If the

performance payout formula yields a basic pay increase for a C-rated

employee that would increase their basic rate of pay beyond the

midpoint dollar threshold, then their basic rate of pay will be

adjusted to the midpoint dollar threshold and the balance converted to

a performance bonus. Once an employee has progressed beyond the

midpoint dollar threshold, future performance pay increases will

require a B rating or greater. If an employee attains a C rating and is

beyond the midpoint dollar threshold, incentive pay increases will be

restricted to performance bonuses only.

Annual performance pay increases will be limited to (1) 50 percent

of the difference between the particular maximum band rate and the

employee's current basic rate of pay, or (2) the projected performance

pay increase, whichever is less, with the balance converted to a

performance bonus. This rule will not apply when an employee's current

basic rate of pay is within $100 of the maximum band rate. This means

that employees whose pay has reached the upper limits of a particular

payband will receive most performance incentives as a performance

bonus. Performance bonuses are cash payments and are not part of the

basic pay for any purpose (e.g., lump sum payments of annual leave on

separation, life insurance, and retirement).

Supervisory Pay Adjustments

Supervisory pay adjustments may be used at the discretion of the

MRDEC Director, to compensate employees assuming positions entailing

supervisory responsibilities. Supervisory pay adjustments are increases

to the supervisor's basic rate of pay, ranging up to 10 percent of that

pay rate, subject to the constraint that the adjustment may not cause

the employee's basic rate of pay to exceed the payband maximum rate.

Only employees in supervisory positions with formal supervisory

authority meeting that required for coverage under the OPM GS

Supervisory Guide may be considered for the supervisory pay adjustment.

Criteria to be considered in determining the pay increase percentage

include the following organizational

[[Page 34888]]

and individual employee factors: (1) Needs of the organization to

attract, retain, and motivate high quality supervisors; (2) budgetary

constraints; (3) years of supervisory experience; (4) amount of

supervisory training received; (5) performance appraisals and

experience as a group or team leader; (6) their organizational level of

supervision; and (7) managerial impact on the organization. The

supervisory pay adjustment will not apply to 5 U.S.C. 3104 (ST)

positions or to employees in Payband V of the E&S occupational family.

Conditions, after the date of conversion into the demonstration

project, under which the application of a supervisory pay adjustment

may be considered are as follows:

(1) New hires into supervisory positions will have their initial

rate of basic pay set at the supervisor's discretion within the pay

range of the applicable payband. This rate of pay may include a

supervisory pay adjustment determined using the ranges and criteria

outlined above.

(2) A career employee selected for a supervisory position that is

within the employee's current payband may also be considered for a

supervisory pay adjustment. If a supervisor is already authorized a

supervisory pay adjustment and is subsequently selected for another

supervisory position, within the same payband, then the supervisory pay

adjustment will be redetermined.

Within the demonstration project rating system, the performance

element ``Supervision/EEO'' is identified as a critical element.

Changes in the rating value for this element awarded to a supervisor

with a supervisory pay adjustment may generate a review of the

adjustment and may result in an increase or decrease to that

adjustment. Decrease to a supervisory pay adjustment is not an adverse

action if this action results from changes in supervisory duties or

supervisory ratings.

Supervisors, upon initial conversion into the demonstration project

into the same, or substantially similar position, will be converted at

their existing basic rate of pay and will not be offered a supervisory

pay adjustment. Supervisory adjustments will not be funded from

performance pay pools.

The initial dollar amount of the adjustment will be removed when

the employee voluntarily leaves the supervisory position. The

cancellation of the adjustment under these circumstances is not an

adverse action and is not appealable. If an employee is removed from a

supervisory position for personal cause (performance or conduct), the

adjustment will be removed under adverse action procedures. However, if

an employee is removed from a non-probationary supervisory position for

conditions other than voluntary or for personal cause, then the pay

retention provisions of 5 CFR part 536 will prevail.

Supervisory Pay Differentials

Supervisory differentials may be used, at the discretion of the

MRDEC Director, to incentivize and reward supervisors who are in

Paybands III, IV, and V of any occupational family in supervisory

positions with formal supervisory authority meeting that required for

coverage under the OPM GS Supervisory Guide (excluding Payband V of the

E&S occupational family). A supervisory pay differential is a cash

incentive that may range up to 10 percent of the supervisor's basic

rate of pay. It is paid on a pay period basis and is not included as

part of the supervisor's basic rate of pay. Criteria to be considered

in determining the amount of this supervisory pay differential includes

those identified for Supervisory Pay Adjustments.

The supervisory pay differential may be considered, either during

conversion into or after initiation of the demonstration project, if

the supervisor has subordinate employees in the same payband. The

differential must be terminated if the employee is removed from a

supervisory position, regardless of cause, or no longer meets

established eligibility criteria. Supervisory differentials will not be

funded from performance pay pools.

As specified in Supervisory Pay Adjustments, after initiation of

the demonstration project, all personnel actions involving a

supervisory differential will require a statement signed by the

employee acknowledging that the differential may be terminated or

reduced at the MRDEC Director's discretion. The termination or

reduction of the differential is not an adverse action and is not

subject to appeal.

Pay and Compensation Ceilings

An employee's total monetary compensation paid in a calendar year

may not exceed the basic rate of pay paid in level I of the Executive

Schedule consistent with 5 U.S.C. 5307 and 5 CFR part 530, subpart B.

In addition, each payband will have its own pay ceiling, just as

grades do in the current system. Pay rates for the various paybands

will be directly keyed to the GS rates. Except for retained rates,

basic pay will be limited to the maximum rates payable for each

payband.

Pay Setting for Promotion

Upon promotion to a higher payband, an employee will be entitled to

a 6% pay increase or the lowest level in the payband to which promoted,

whichever is greater. Highest previous rate also may be considered in

setting pay upon promotion, under rules similar to the highest previous

rate rules in 5 CFR 531.203 (c) and (d).

Grade and Pay Retention

Except where waived or modified in the waivers section of this

plan, grade and pay retention will follow current law and regulations.

C. Classification

Introduction

The objectives of the new classification system are to simplify the

classification process, make the process more serviceable and

understandable, and place more decision-making authority and

accountability with line managers. All positions listed in Appendix A

will be in the classification structure. Provisions will be made for

including other occupations as employment requirements change in

response to changing technical programs.

Occupational Series

The present GS classification system has over 400 occupations (also

called series), which are divided into 22 groups. The occupational

series will be maintained. New series, established by OPM, may be added

as needed to reflect new occupations in the workforce. Appendix A lists

the occupational series currently represented at the MRDEC by

occupational family.

Classification Standards

MRDEC will use a classification system that is a modification of

the system now in use at the U.S. Navy, Naval Command, Control and

Ocean Surveillance Center, San Diego, California. The present

classification standards will be used to create local benchmark

position descriptions for each payband, reflecting duties and

responsibilities comparable to those described in present

classification standards for the span of grades represented by each

payband. There will be at least one benchmark position description for

each payband. A supervisory benchmark position description may be added

to those paybands that include supervisory employees. Present titles

and series will continue to be used in order to recognize the types of

work being performed and educational backgrounds

[[Page 34889]]

and requirements of incumbents. Locally developed specialty codes and

OPM functional codes will be used to facilitate titling, making

qualification determinations, and assigning competitive levels to

determine retention status.

Position Descriptions and Classification Process

The MRDEC Director will have delegated classification authority and

may redelegate this authority to subordinate managers. New benchmark

position descriptions will be developed to assist managers in

exercising delegated position classification authority. Managers will

identify the occupational family, job series, the functional code, the

specialty code, payband level, and the appropriate acquisition codes.

The manager will document these decisions on a cover sheet similar to

the present DA Form 374.

Specialty codes will be developed by Subject Matter Experts (SMEs)

to identify the special nature of work performed. Functional codes are

those currently found in the OPM Introduction to the Classification

Standards which define certain kinds of activities, e.g., Research,

Development, Test and Evaluation, etc., and covers Engineers &

Scientists.

Classification Appeals

An employee may appeal the occupational family, occupational

series, or payband level of his or her position at any time. An

employee must formally raise the areas of concern to the supervisors in

the immediate chain of command, either verbally or in writing. If an

employee is not satisfied with the supervisory response, he or she may

then appeal to the DoD appellate level. If an employee is not satisfied

with the DoD response, he or she may then appeal to the Office of

Personnel Management, only after DoD has rendered a decision under the

provisions of this demonstration project. Appellate decisions from OPM

are final and binding on all administrative, certifying, payroll,

disbursing, and accounting officials of the Government. Time periods

for case processing under Title 5 apply.

An employee may not appeal the accuracy of the position

description, the demonstration project classification criteria, or the

pay-setting criteria; the assignment of occupational series to an

occupational family; the title of a position; the propriety of a salary

schedule; or matters grievable under an administrative or negotiated

grievance procedure or an alternative dispute resolution procedure.

The evaluation of a classification appeal under this demonstration

project are based upon the demonstration project classification

criteria. Case files will be forwarded for adjudication through the

Civilian Personnel Advisory Center/Civilian Personnel Operations Center

(CPAC/CPOC) providing personnel service and will include copies of

appropriate demonstration project criteria.

D. Hiring and Appointment Authorities

1. Hiring Authority

A candidate's basic eligibility will be determined using Office of

Personnel Management's (OPM) Qualification Standards Handbook for

General Schedule Positions. Candidates must meet the minimum standards

for entry into the payband. For example, if the payband includes

positions in grades GS-5 and GS-7, the candidate must meet the

qualifications for positions at GS-5 level. Specific experience/

education required will be determined based on whether a position to be

filled is at the lower or higher end of the band. Selective placement

factors can be established in accordance with the OPM Qualification

Handbook, when judged to be critical to successful job performance.

These factors will be communicated to all candidates for particular

position vacancies and must be met for basic eligibility. Under the

demonstration authority, the MRDEC will modify qualification standards

only as authorized in the General Policies and instructions (paragraph

8) of the Qualification Standard Handbook.

2. Appointment Authority

Under the demonstration project, there will continue to be career

and career conditional appointments and temporary appointments not to

exceed one year. These appointments will use existing authorities and

entitlements. Non-permanent positions (exceeding one year) needed to

meet fluctuating or uncertain workload requirements will be filled

using a Contingent Employee appointment authority.

Employees hired for more than one year, under the contingent

employee appointment authority, are given term appointments in the

competitive service for no longer than five years. The MRDEC Director

is authorized to extend a contingent appointment one additional year.

These employees are entitled to the same rights and benefits as term

employees and will serve a one year trial period. The Pay-for-

Performance Management System described in III.B applies to contingent

employees.

Appointments will be made under the same appointment authorities

and processes as regular term appointments, but recruitment bulletins

must indicate that there is a potential for conversion to permanent

employment.

Employees hired under the contingent employee authority may be

eligible for conversion to career-conditional appointments. To be

converted, the employee must (1) have been selected for the term

position under competitive procedures, with the announcement

specifically stating that the individual(s) selected for the term

position(s) may be eligible for conversion to career-conditional

appointment at a later date; (2) served two years of substantially

continuous service in the term position; (3) be selected under merit

promotion procedures for the permanent position; and (4) have a current

rating of B or better.

Employees serving under regular term appointments at the time of

conversion to the Demonstration Project will be converted to the new

contingent employee appointments provided they were hired for their

current positions under competitive procedures. These employees will be

eligible for conversion to career-conditional appointment if they have

a current rating of B or better (or one of the top two ratings on the

current evaluation system), and are selected under merit promotion

procedures for their permanent position after having completed two

years of continuous service. Time served in term positions prior to

conversion to the contingent employee appointment is creditable to the

requirement for two years of continuous service stated above, provided

the service was continuous.

3. Extended Probationary Period

The current one year probationary period will be extended to two

years for all newly hired employees in the Engineers and Scientists and

Technical and Business Support occupational families. The purpose of

extending the probationary period is to allow supervisors an adequate

period of time to fully evaluate an employee's ability to complete a

cycle of work (such as research, program development and execution, and

technology transfer) and to fully evaluate an employee's contribution

and conduct. Employees in the General Support occupational family will

serve a one year probationary period.

Aside from extending the time period, all other features of the

current probationary period are retained

[[Page 34890]]

including the potential to remove an employee without providing the

full substantive and procedural rights afforded a non-probationary

employee. Any employee appointed prior to the implementation date will

not be affected. The two year probation will apply to new hires or

those who do not have reemployment rights or reinstatement privileges.

Probationary employees will be terminated when the employee fails

to demonstrate proper conduct, technical competency, and/or adequate

contribution for continued employment. When the MRDEC decides to

terminate an employee serving a probationary period because his/her

work performance or conduct during this period fails to demonstrate

their fitness or qualifications for continued employment, it shall

terminate his/her services by written notification of the reasons for

separation and the effective date of the action. The information in the

notice as to why the employee is being terminated shall, as a minimum,

consists of the manager's conclusions as to the inadequacies of their

performance or conduct.

4. Supervisory Probationary Periods

Supervisory probationary periods will be made consistent with 5 CFR

315, Subchapter 315.901. Employees that have successfully completed the

initial probationary period will be required to complete an additional

one year probationary period for the initial appointment to a

supervisory position. If, during the probationary period, the decision

is made to return the employee to a nonsupervisory position for reasons

solely related to supervisory performance, the employee will be

returned to a comparable position of no lower payband and pay than the

position from which they were promoted.

5. Voluntary Emeritus Program

Under the demonstration project, the MRDEC Director will have the

authority to offer retired or separated individuals (engineers and

scientists) voluntary assignments in the MRDEC. This authority will

include individuals who have retired or separated from Federal service.

Voluntary Emeritus Program assignments are not considered

``employment'' by the Federal government (except for purposes of injury

compensation). Thus, such assignments do not affect an employee's

entitlement to buyouts or severance payments based on an earlier

separation from Federal service. The Voluntary Emeritus Program will

ensure continued quality research while reducing the overall salary

line by allowing higher paid individuals to accept retirement

incentives with the opportunity to retain a presence in the scientific

community. The program will be of most benefit during manpower

reductions as senior S&Es could accept retirement and return to provide

valuable on-the-job training or mentoring to less experienced

employees. Voluntary service will not be used to replace any employee,

or interfere with career opportunities of employees.

To be accepted into the emeritus program, a volunteer must be

recommended by MRDEC managers to the MRDEC Director. Everyone who

applies is not entitled to a voluntary assignment. The MRDEC Director

must clearly document the decision process for each applicant (whether

accepted or rejected) and retain the documentation throughout the

assignment. Documentation of rejections will be maintained for two

years.

To ensure success and encourage participation, the volunteer's

federal retirement pay (whether military or civilian) will not be

affected while serving in a voluntary capacity. Retired or separated

federal employees may accept an emeritus position without a break or

mandatory waiting period.

Volunteers will not be permitted to monitor contracts on behalf of

the government or to participate on any contracts or solicitations

where a conflict of interest exists. The same rules that currently

apply to source selection members will apply to volunteers.

An agreement will be established between the volunteer, the MRDEC

Director and the CPAC/CPOC Director. The agreement will be reviewed by

the local Legal Office for ethics determinations under the Joint Ethics

Regulation. The agreement must be finalized before the assumption of

duties and shall include:

(a) a statement that the voluntary assignment does not constitute

an appointment in the civil service and is without compensation, and

any and all claims against the Government (because of the voluntary

assignment) are waived by the volunteer,

(b) a statement that the volunteer will be considered a federal

employee for the purpose of injury compensation,

(c) volunteer's work schedule,

(d) length of agreement (defined by length of project or time

defined by weeks, months, or years),

(e) support provided by the MRDEC (travel, administrative, office

space, supplies),

(f) a one page Statement of Duties and Experience,

(g) a provision that states no additional time will be added to a

volunteer's service credit for such purposes as retirement, severance

pay, and leave as a result of being a member of the Voluntary Emeritus

Program,

(h) a provision allowing either party to void the agreement with 10

working days written notice, and

(i) the level of security access required (any security clearance

required by the assignment will be managed by the MRDEC while the

volunteer is a member of the Voluntary Emeritus Program).

E. Employee Development

1. Expanded Developmental Opportunity Program

The MRDEC Expanded Developmental Opportunity Program will be funded

by the MRDEC, and it will cover all demonstration project employees in

the Engineers and Scientists and the Technical and Business Support

occupational families. An expanded developmental opportunity

complements existing developmental opportunities such as (1) long term

training, (2) one year work experiences in an industrial setting via

the Relations With Industry Program, (3) one year work experiences in

laboratories of allied nations via the Science and Engineer Exchange

Program, (4) rotational job assignments within the MRDEC, (5) up to one

year developmental assignments in higher headquarters within the Army

and Department of Defense, and (6) self directed study via

correspondence courses and local colleges and universities.

Each developmental opportunity period should benefit the MRDEC, as

well as increase the employee's individual effectiveness. Various

learning or uncompensated developmental work experiences may be

considered, such as advanced academic teaching or research, or on-the-

job work experience with public or non-profit organizations. Employees

will be eligible after completion of seven years of Federal service.

Final approval authority will rest with the MRDEC Director, and

selection of an employee to be granted an expanded developmental

opportunity will be on a competitive basis. An expanded developmental

opportunity period will not result in loss of (or reduction in) basic

pay, leave to which the employee is otherwise entitled, or credit for

time or service. Employees accepting an expanded developmental

opportunity

[[Page 34891]]

do not have to sign a continued service agreement cited in 5 U.S.C.

4108(a)(1) (Supplement 1995).

The opportunity to participate in the Expanded Developmental

Opportunity Program will be announced annually. Instructions for

application and the selection criteria will be included in the

announcement. Final selection for participation in the program will be

made by the Personnel Management Board. The position of employees on an

expanded developmental opportunity may be backfilled with employees

temporarily promoted or contingent employees or employees assigned via

the simplified assignment process in III.A. However, that position or

its equivalent must be made available to the employee returning from

the expanded developmental opportunity.

2. Training for Degrees

Degree training is an essential component of an organization that

requires continuous acquisition of advanced and specialized knowledge.

Degree training in the academic environment of laboratories is also a

critical tool for recruiting and retaining employees with or requiring

critical skills. Constraints under current law and regulation limit

degree payment to shortage occupations. In addition, current government

wide regulations authorize payment for degrees based only on

recruitment or retention needs. Degree payment is not permitted

currently for non-shortage occupations involving critical skills.

The MRDEC proposes to expand the authority to provide degree

payment to employees in all occupational families for purposes of

meeting critical skill requirements, to ensure continuous acquisition

of advanced and specialized knowledge essential to the organization,

and to recruit and retain personnel critical to the present and future

requirements of the organization. Degree payment may not be authorized

where it would result in a tax liability for the employee without the

employee's express and written consent. It is expected that the degree

payment authority will be used primarily and largely for advanced

degrees, except where an undergraduate program is necessary to the

attainment of an advanced degree or credits. Any variance from this

policy must be rigorously determined and documented.

The MRDEC will develop guidelines to ensure competitive approval of

degree payment and that such decisions are fully documented.

F. Revised Reduction-in-Force (RIF) Procedures

Introduction

Modifications include limiting competitive area, as defined below,

and increasing the emphasis on performance in the RIF Process.

Retention criteria are in the following order; tenure, veterans'

preference, service credit adjusted by a sum of the last three

performance ratings. Current reduction in force regulations/procedures

have been adjusted in the context of the occupational family and the

payband classification system.

Competitive Areas

All positions included in the Demonstration Project at a specific

geographic location will be considered a separate competitive area.

Bumps and retreats will occur only within the competitive area and only

to positions for which the employee is qualified. Competitive levels

will be established based on the payband, classification series, and

where responsibilities are similar enough in duties, qualification

requirements, pay schedules, and working conditions so that an employee

may be reassigned to any of the other positions within the level

without requiring significant training or causing undue interruption.

Separate competitive levels will be established for positions in the

competitive and excepted service; for positions filled on a full-time,

part-time, intermittent, seasonal, or on-call basis; and separate

levels will be established for positions filled by an employee in a

formally designated trainee or developmental program.

Retention

Competing employees are listed on a retention register in the order

shown below. Each tenure group has three subgroups (30% or higher

compensable veterans, other veterans, and non-veterans) and employees

appear on the retention register in that order. Within each subgroup,

employees are in order of years of service adjusted to include

performance credit.

Tenure I (Career employees)

Tenure II (Career-Conditional employees)

Tenure III (Contingent employees)

In the demonstration project, an employee can bump to a position

held by another employee in a lower subgroup or tenure group; the

position may be no lower than the equivalent of three GS grades (or

appropriate grade intervals) below the minimum GS grade level of his/

her current band in accordance with Section V (Conversion or Movement

from a Project Position to a General Schedule Position, a. Grade-

Setting Provision). An employee can retreat to a position held by

another employee in the same subgroup who has a lower adjusted RIF

service computation date; the position may be no lower than the

equivalent of three GS grades (or appropriate grade intervals) below

the minimum GS grade level of his/her current band, in accordance with

Section V (Conversion or Movement from a Project Position to a General

Schedule Position, a Grade Setting Provision). A preference eligible

with a compensable service-connected disability of 30 percent or more

may retreat to a position equivalent to five GS grades (or appropriate

grade intervals) below the minimum grade level of his/her current band.

An employee with a current annual performance rating of U has

assignment rights only to a position held by another employee who has a

U rating. An employee who has been given a written decision of removal

because of unacceptable performance will be placed at the bottom of the

retention register for his/her competitive level.

Link Between Performance and Retention

An employee will have additional years of service added to the

service computation date for retention purposes. The credit is applied

for each of the last three annual performance ratings of record,

received over the last four years, for a potential credit of 30 years.

If an employee has less than three annual performance ratings of

record, then for each missing rating, an average of the ratings

received for the past four years will be used. Ratings given under non-

demo systems will be converted to the demo rating scheme and provided

the equivalent rating credit.

Rating A adds 10 years

Rating B adds 7 years

Rating C adds 3 years

Rating U adds no credit for retention

IV. Training

Introduction

The key to the success or failure of the proposed demonstration

project will be the training provided for all involved. This training

will not only provide the necessary knowledge and skills to carry out

the proposed changes, but will also lead to program commitment on the

part of participants.

Training before the beginning of implementation and throughout the

demonstration will be provided to supervisors, employees, and the

administrative staff responsible for

[[Page 34892]]

assisting managers in effecting the changeover and operation of the new

system.

The elements to be covered in the orientation portion of this

training will include: (1) A description of the personnel system, (2)

how employees are converted into and out of the system, (3) the pay

adjustment and/or bonus process, (4) familiarization with the new

position descriptions and performance objectives, (5) the performance

evaluation management system, (6) the reconsideration process, and (7)

the demonstration project administrative and formal evaluation process.

AFGE Local 1858 will be given an opportunity to describe their role and

function in the demonstration program.

Supervisors

The focus of this project on management-centered personnel

administration, with increased supervisory and managerial personnel

management authority and accountability, demands thorough training of

supervisors and managers in the knowledge and skills that will prepare

them for their new responsibilities. Training will include detailed

information on the policies and procedures of the demonstration

project, skills training in using the classification system, position

description preparation, performance evaluation, and interaction with

AFGE Local 1858 as a partner. Additional training may focus on

nonproject procedural techniques such as interpersonal and

communication skills.

Administrative Staff

The administrative staff, generally personnel specialists,

technicians, and administrative officers, will play a key role in

advising, training, and coaching supervisors and employees in

implementing the demonstration project. This staff will need training

in the procedural and technical aspects of the project.

Employees

The MRDEC, in conjunction with the AFGE Local 1858 and education

and development assets of the CPAC/CPOC will train employees covered

under the demonstration project. In the months leading up to the

implementation date, meetings will be held for employees to fully

inform them of all project decisions, procedures, and processes.

V. Conversion

Conversion to the Demonstration Project

a. Initial entry into the demonstration project will be

accomplished through a full employee protection approach that ensures

each employee an initial place in the appropriate payband without loss

of pay. Employees serving under regular term appointments at the time

of the implementation of the demonstration project will be converted to

the contingent employee appointment. Position announcement, etc. will

not be required for these contingent employee appointments. An

automatic conversion from current GS/GM grade and pay into the new

broadband system will be accomplished. Each employee's initial total

salary under the demonstration project will equal the total salary

received immediately before conversion. Employees who enter the

demonstration project later by lateral reassignment or transfer will be

subject to parallel pay conversion rules. If conversion into the

demonstration project is accompanied by a geographic move, the

employee's GS pay entitlements in the new geographic area must be

determined before performing the pay conversion.

b. Employees who are on temporary promotions at the time of

conversion will be converted to a payband commensurate with the grade

of the position to which promoted. At the conclusion of the temporary

promotion, the employee will revert to the payband which corresponds to

the grade of record. When a temporary promotion is terminated, the

employee's pay entitlements will be determined based on the employee's

position of record, with appropriate adjustments to reflect pay events

during the temporary promotion, subject to the specific policies and

rules established by the MRDEC. In no case may those adjustments

increase the pay for the position or record beyond the applicable pay

range maximum rate. The only exception will be if the original

competitive promotion announcement stipulated that the promotion could

be made permanent; in these cases actions to make the temporary

promotion permanent will be considered, and if implemented, will be

subject to all existing priority placement programs.

c. Employees who are covered by special salary rates, prior to the

demonstration project, will no longer be considered a special rate

employee under the Demonstration Project. These employees will,

therefore, be eligible for full locality pay. The adjusted salaries of

these employees will not change. Rather, the employees will receive a

new basic pay rate computed by dividing their adjusted basic pay

(higher of special rate or locality rate) by the locality pay factor

for their area. A full locality adjustment will then be added to the

new basic pay rate. Adverse action and pay retention provisions will

not apply to the conversion process as there will be no change in total

salary.

d. During the first 12 months following conversion, employees will

receive pay increases for non-competitive promotion equivalents when

the grade level of the promotion is encompassed within the same

broadband, the employee's performance warrants the promotion and

promotions would have otherwise occurred during that period. Employees

who receive an in-level promotion at the time of conversion will not

receive a prorated step increase equivalent as defined below.

e. Under the current pay structure, employees progress through

their assigned grade in step increments. Since this system is being

replaced under the demonstration project, employees (including those

added to the MRDEC by BRAC 95 actions) will be awarded that portion of

the next higher step based upon the portion of the waiting period they

have completed prior to the date of implementation. As under the

current system, supervisors will be able to withhold these partial step

increases if the employee's performance falls below fully successful.

Rules governing Within-Grade Increases (WGI) under the current Army

performance plan will continue in effect until the implementation date.

Adjustments to the employee's base salary for WGI equity will be

computed effective the date of implementation to coincide with the

beginning of the first formal PFP assessment cycle. WGI equity will be

acknowledged by increasing base salaries by a prorated share based upon

the number of weeks an employee has completed toward the next higher

step. Payment will equal the current value of the employee's next WGI

times the proportion of the waiting period completed (weeks completed

in waiting period/weeks in the waiting period) at the time of

conversion. Employees at step 10, or receiving retained rates, on the

date of implementation will not be eligible for WGI equity adjustments

since they are already at or above the top of the step scale.

Conversion or Movement From a Project Position to a General Schedule

Position

If a demonstration project employee is moving to a General Schedule

(GS) position not under the demonstration project, or if the project

ends and each project employee must be converted back to the GS system,

the following procedures will be used to convert the employee's project

payband to a GS-equivalent grade and the employee's project rate of pay

to GS equivalent rate of pay. The converted GS grade and GS

[[Page 34893]]

rate of pay must be determined before movement or conversion out of the

demonstration project and any accompanying geographic movement,

promotion, or other simultaneous action. For conversions upon

termination of the project and for lateral reassignments, the converted

GS grade and rate will become the employee's actual GS grade and rate

after leaving the demonstration project (before any other action). For

transfers, promotions, and other actions, the converted GS grade and

rate will be used in applying any GS pay administration rules

applicable in connection with the employee's movement out of the

project (e.g., promotion rules, highest previous rate rules, pay

retention rules), as if the GS converted grade and rate were actually

in effect immediately before the employee left the demonstration

project.

a. Grade-Setting Provisions: An employee in a payband corresponding

to a single GS grade is converted to that grade. An employee in a

payband corresponding to two or more grades is converted to one of

those grades according to the following rules:

(1) The employee's adjusted rate of basic pay under the

demonstration project (including any locality payment) is compared with

step 4 rates in the highest applicable GS rate range. (For this

purpose, a ``GS rate range'' includes a rate in (1) the GS base

schedule, (2) the locality rate schedule for the locality pay area in

which the position is located, or (3) the appropriate special rate

schedule for the employee's occupational series, as applicable.) If the

series is a two-grade interval series, only odd-numbered grades are

considered below GS-11.

(2) If the employee's adjusted project rate equals or exceeds the

applicable step 4 rate of the highest GS grade in the band, the

employee is converted to that grade.

(3) If the employee's adjusted project rate is lower than the

applicable step 4 rate of the highest grade, the adjusted rate is

compared with the step 4 rate of the second highest grade in the

employee's payband. If the employee's adjusted rate equals or exceeds

step 4 rate of the second highest grade, the employee is converted to

that grade.

(4) This process is repeated for each successively lower grade in

the band until a grade is found in which the employee's adjusted

project rate equals or exceeds the applicable step 4 rate of the grade.

The employee is then converted at that grade. If the employee's

adjusted rate is below the step 4 rate of the lowest grade in the band,

the employee is converted to the lowest grade.

(5) Exception: If the employee's adjusted project rate exceeds the

maximum rate of the grade assigned under the above-described ``step 4''

rule but fits in the rate range for the next higher applicable grade

(i.e., between step 1 and step 4), then the employee shall be converted

to that next higher applicable grade.

(6) Exception: An employee will not be converted to a lower grade

than the grade held by the employee immediately preceding a conversion,

lateral reassignment, or lateral transfer into the project, unless

since that time the employee has undergone a reduction in band.

b. Pay-Setting Provisions: An employee's pay within the converted

GS grade is set by converting the employee's demonstration project rate

of pay to GS rate of pay in accordance with the following rules:

(1) The pay conversion is done before any geographic movement or

other pay-related action that coincides with the employee's movement or

conversion out of the demonstration project.

(2) An employee's adjusted rate of basic pay under the project

(including any locality payment) is converted to a GS adjusted rate on

the highest applicable rate range for the converted GS grade. (For this

purpose, a ``GS rate range'' includes a rate range in (1) the GS base

schedule, (2) an applicable locality rate schedule, or (3) an

applicable special rate schedule.)

(3) If the highest applicable GS rate range is a locality pay rate

range, the employee's adjusted project rate is converted to a GS

locality rate of pay. If this rate falls between two steps in the

locality-adjusted schedule, the rate must be set at the higher step.

The converted GS unadjusted rate of basic pay would be the GS base rate

corresponding to the converted GS locality rate (i.e., same step

position). (If this employee is also covered by a special rate schedule

as a GS employee, the converted special rate will be determined based

on the GS step position. This underlying special rate will be basic pay

for certain purposes for which the employee's higher locality rate is

not basic pay.)

(4) If the highest applicable GS rate range is a special rate

range, the employee's adjusted project rate is converted to a special

rate. If this rate falls between two steps in the special rate

schedule, the rates must be set at the higher step. The converted GS

unadjusted rate of basic pay will be the GS rate corresponding to the

converted special rate (i.e., same step position).

c. E&S Payband V Employees: An employee in Payband V of the E&S

Occupational family will convert out of the demonstration project at

the GS-15 level. The MRDEC, in consultation with the MICOM CPAC, will

develop a procedure to ensure that employees entering Payband V

understand that if they leave the demonstration project and their

adjusted pay exceeds the GS-15, step 10 rate, there is no entitlement

to retained pay; their GS-equivalent rate will be deemed to be the rate

for GS-15, step 10. For those Payband V employees paid below the

adjusted GS-15, step 10 rate, the converted rates will be set in

accordance with paragraph b.

d. Employees with Band or Pay Retention: (1) If an employee is

retaining a band level under the demonstration project, apply the

procedures in paragraphs a and b, above, using the grades encompassed

in the employee's retained band to determine the employee's GS-

equivalent retained grade and pay rate. The time in a retained band

under the demonstration project counts toward the 2-year limit on grade

retention in 5 U.S.C. 5382.

(2) If an employee is retaining rate under the demonstration

project, the employee's GS-equivalent grade is the highest grade

encompassed in his or her band level. MRDEC will coordinate with OPM to

prescribe a procedure for determining the GS-equivalent pay rate for an

employee retaining a rate under the demonstration project.

e. Within-Grade Increase--Equivalent Increase Determinations:

Service under the demonstration project is creditable for within-grade

increase purposes upon conversion back to the GS pay system.

Performance pay increases (including a zero increase) under the

demonstration project are equivalent increases for the purpose of

determining the commencement of a within-grade increase waiting period

under 5 CFR 531.405(b).

Personnel Administration

All personnel laws, regulations, and guidelines not waived by this

plan will remain in effect. Basic employee rights will be safeguarded

and merit principles will be maintained. Supporting personnel

specialists will continue to process personnel-related actions and

provide consultative and other appropriate services.

Use of benchmark position descriptions is not anticipated to

adversely impact an employee's ability to seek employment outside of

MRDEC. MRDEC employees participating in the project will have short

generic benchmark position descriptions which describe the general type

of work performed, and the range of complexity and supervisory

controls. The

[[Page 34894]]

benchmark position description cover sheet lists the OPM occupational

series, e.g., 855 for Electronics Engineer, to which the employee is

assigned, and, where additional specificity is needed, lists a

specialty code, which ties the employee's benchmark description to a

particular technology or functional area. The OPM occupational code

will serve as ready identification Government-wide of the basic

qualifications and experience that the employee possesses. In addition,

virtually all federal employment systems, including the Office of

Personnel Management's, rely on employee-generated resumes which allow

the applicants to summarize or describe the details of their experience

and training. Any pertinent information regarding the MRDEC employees'

knowledge, skills or abilities not contained in the benchmark position

description can be conveyed to potential employers through their

resume.

Automation

The MRDEC will continue to use the Defense Civilian Personnel Data

System (DCPDS) for the processing of personnel-related data. Payroll

servicing will continue from the respective payroll offices.

Local automated systems will be developed to support computation of

performance related pay increases and awards and other personnel

processes and systems associated with this project.

Experimentation and Revision

Many aspects of a demonstration project are experimental. Upon

written request by Management or the union to the other party,

modifications may be negotiated at any time as experience is gained,

results are analyzed, and conclusions are reached on how the system is

working. The MRDEC will make minor modifications, such as changes in

the occupational series in an occupational family without further

notice. Major changes, such as a change in the number of occupational

families, will be negotiated with the union and published in the

Federal Register. See 5 CFR part 470.

VI. Project Duration

Public Law 103-337 removed any mandatory expiration date for this

demonstration. The project evaluation plan adequately addresses how

each intervention will be comprehensively evaluated for at least the

first 5 years of the demonstration. Major changes and modifications to

the interventions can be made through announcement in the Federal

Register and would be made if formative evaluation data warranted. At

the 5 year point, the entire demonstration will be reexamined for

either: (a) Permanent implementation, (b) change and another 3-5 year

test period, or (c) expiration.

VII. Evaluation Plan

Chapter 47 (Title 5 U.S.C.) requires that an evaluation system be

implemented to measure the effectiveness of the proposed personnel

management interventions. An evaluation plan for the entire laboratory

demonstration program covering 24 DoD labs was developed by a joint

OPM/DoD Evaluation Committee. A Comprehensive evaluation plan was

submitted to the Office of Defense Research & Engineering in 1995 and

subsequently approved (Proposed Plan for Evaluation of the Department

of Defense S&T Laboratory Demonstration Program, Office of Merit

Systems Oversight & Effectiveness, June 1995). The overall evaluation

effort will be coordinated and conducted by OPM's Personnel Resources

and Development Center (PRDC). The primary focus of the evaluation is

to determine whether the waivers granted result in a more effective

personnel system than the current as well as an assessment of the costs

associated with the new system.

The present personnel system with its many rigid rules and

regulations is generally perceived as an impediment to mission

accomplishment. The Demonstration Project is intended to remove some of

those barriers and therefore, is expected to contribute to improved

organizational performance. While it is not possible to prove a direct

causal link between intermediate and ultimate outcomes (improved

personnel system performance and improved organizational

effectiveness), such a linkage is hypothesized and data will be

collected and tracked for both types of outcome variables.

An intervention impact model (Appendix B) will be used to measure

the effectiveness of the various personnel system changes or

interventions. Additional measures will be developed as new

interventions are introduced or existing interventions modified

consistent with expected effects. Measures may also be deleted when

appropriate. Activity specific measures may also be developed to

accommodate specific needs or interests which are locally unique.

The evaluation model for the Demonstration Project identifies

elements critical to an evaluation of the effectiveness of the

interventions. The overall evaluation approach will also include

consideration of context variables that are likely to have an impact on

project outcomes: e.g., HRM regionalization, downsizing, cross-service

integration, and the general state of the economy. However, the main

focus of the evaluation will be on intermediate outcomes, i.e., the

results of specific personnel system changes which are expected to

improve human resources management. The ultimate outcomes are defined

as improved organizational effectiveness, mission accomplishment, and

customer satisfaction.

Data from a variety of different sources will be used in the

evaluation. Information from existing management information systems

supplemented with perceptual data will be used to assess variables

related to effectiveness. Multiple methods provide more than one

perspective on how the demonstration project is working. Information

gathered through one method will be used to validate information

gathered through another. Confidence in the findings will increase as

they are substantiated by the different collection methods. The

following types of data will be collected as part of the evaluation:

(1) Workforce data; (2) personnel office data; (3) employee attitudes

and feedback using surveys, structured interviews, and focus groups;

(4) local activity histories; and, (5) core measures of laboratory

effectiveness.

VIII. Demonstration Project Costs

Costs associated with the development of the personnel

demonstration system include software automation, training, and project

evaluation. All funding will be provided through the MICOM/MRDEC

budget. The projected annual expenses for each area is summarized in

Table 1.

Table 1.--Projected Developmental Costs (Then Year Dollars)

--------------------------------------------------------------------------------------------------------------------------------------------------------

FY 96 FY 97 FY 98 FY 99 FY 00 FY 01

--------------------------------------------------------------------------------------------------------------------------------------------------------

Training......................... $6K $99K $12K

Project Evaluation............... $25K $60K $60K $60K $60K $60K

[[Page 34895]]

Automation....................... $80K $10K

----------------------------------------------------------------------------------------------------------------------

Totals..................... $111K $169K $72K $60K $60K $60K

--------------------------------------------------------------------------------------------------------------------------------------------------------

IX. Required Waivers to Law and Regulation

Public Law 103-337 gave the DoD the authority to experiment with

several personnel management innovations. In addition to the

authorities granted by the law, the following are the waivers of law

and regulation that will be necessary for implementation of the

Demonstration Project. In due course, additional laws and regulations

may be identified for waiver request.

1. Title 5, U.S. Code

Chapter 31, Section 3111: Acceptance of Volunteer Service--To the

extent that the acceptance of retired or separated engineers and

scientists are included as volunteers under current statute.

Chapter 31, Section 3132: The Senior Executive Service; Definitions

and exclusions.

Chapter 33, Section 3324: Appointment to positions classified above

GS-15.

Chapter 41, Section 4107: Pay for Degrees.

Chapter 41, Section 4108: Employee Agreements; Service after

Training--To the extent that employees who accept an expanded

developmental opportunity (sabbatical) do not have to sign a continued

service agreement.

Chapter 43, Sections 4301(3): Definitions

Chapter 43, Section 4302: Establishment of Performance Appraisal

Systems.

Chapter 43, Section 4303(a), (b), and (c): Actions based on

Unacceptable Performance.

Chapter 51, Sections 5101-5111: Related to classification standards

and grading; to the extent that white collar employees will be covered

by broadbanding. Pay category determination criteria for federal wage

system positions remain unchanged.

Chapter 53, Sections 5301, 5302 (8) and (9), 5303 and 5304:

Sections 5301, 5302, and 5304 are waived only to the extent necessary

to allow demonstration project employees to be treated as General

Schedule employees and to allow basic rates of pay under the

demonstration project to be treated as scheduled rates of pay. This

waiver does not apply to ST employees who continue to be covered by

these provisions, as appropriate. Employees in Payband V of the E&S

occupational family are treated as ST employees for the purposes of

these provisions.

Chapter 53, Section 5305: Special Rates

Chapter 53, Sections 5331-5336: General Schedule pay rates.

Chapter 53, Sections 5361-5366: Grade and pay retention--This

waiver applies only to the extent necessary to (1) replace ``grade''

with ``payband'; (2) allow demonstration project employees to be

treated as General Schedule employees; (3) provide that pay retention

provisions do not apply to conversions from General Schedule special

rates to demonstration project pay, as long as total pay is not

reduced, and to reductions in pay due solely to the removal of a

supervisory pay adjustment upon voluntarily leaving a supervisory

position; (4) provide that an employee on pay retention whose

performance rating is ``U'' is not entitled to 50 percent of the amount

of the increase in the maximum rate of basic pay payable for the

payband of the employee's position; and, (5) ensure that for employees

of Payband V of the E&S occupational family, payband retention is not

applicable and pay retention provisions are modified so that no rate

established under these provisions may exceed the rate of basic pay for

GS-15, step 10 (i.e., there is no entitlement to retained rate). This

waiver does not apply to ST employees unless they move to a GS-

equivalent position under the demonstration project under conditions

that trigger entitlement to pay retention.

Chapter 55, Section 5545(d): Hazardous duty differential--This

waiver applies only to the extent necessary to allow demonstration

project employees to be treated as General Schedule employees. This

waiver does not apply to ST employees or employees in Payband V of the

E&S occupational family.

Chapter 57, Section 5753, 5754, and 5755: Recruitment and

Relocation Bonuses, Retention Allowances and Supervisory

Differentials--This waiver applies only to the extent necessary to

allow employees and positions under the demonstration project to be

treated as employees and positions under the General Schedule. This

waiver does not apply to ST employees who continue to be covered by

these provisions, as appropriate. Employees in Payband V of the E&S

occupational family are treated as ST employees for the purposes of

these provisions.

Chapter 75, Section 7512(3): Adverse actions--This waiver applies

only to the extent necessary to replace ``grade'' with ``payband''.

Chapter 75, Section 7512(4): Adverse actions--This waiver applies

only to the extent necessary to provide that adverse action provisions

do not apply to (1) conversions from General Schedule special rates to

demonstration project pay, as long as total pay is not reduced and (2)

reductions in pay due to the removal of a supervisory pay adjustment

upon voluntary movement to a nonsupervisory position.

2. Title 5, Code of Federal Regulations:

Part 300.601-605: Time-in-Grade requirements--Restrictions

eliminated under the demonstration.

Part 308.101 through 308.103: Volunteer Service--To the extent that

retired engineers/scientists can perform voluntary services.

Part 315.801 and 315.802: Probationary Period--Demonstration

project employees in some occupational families will have extended

probationary period.

Part 316.301: Term Appointments--Adding years to exceed 4.

Part 316.303: Tenure of Term Employees--Demonstration allows for

conversion.

Part 316.305: Eligibility for Within-Grade Increases.

Part 351.402(b): Competitive Areas--Demonstration establishes each

separate geographic location of the MRDEC as a separate competitive

area.

Part 351.403: Competitive level--To the extent that payband is

substituted for grade.

Part 351.504: Credit for Performance--As it relates to years of

credit.

Part 351.701: Assignment Involving Displacement--To the extent that

employees bump and retreat rights will be limited to one payband except

in the case of 30% preference eligibles which is a position equivalent

to five GS grades below the minimum grade level of his/her payband.

Part 430 subpart B, Performance Appraisal for General Schedule,

[[Page 34896]]

Prevailing Rate, and Certain Other Employees: Employees under the

demonstration project will not be subject to the requirements of this

subpart.

Part 432: Modified to the extent that an employee may be removed,

reduced in band level with a reduction in pay, reduced in pay without a

reduction in band level and reduced in band level without a reduction

in pay based on unacceptable performance. Also modified to delete

reference to critical element. For employees who are reduced in band

level without a reduction in pay, Sections 432.105 and 432.106(a) do

not apply.

Part 432, Sections 104 and 105: Proposing and Taking Action Based

on Unacceptable Performance.

Part 511: Classification Under the General Schedule--To the extent

that grades are changed to paybands, and that white collar positions

are covered by paybanding.

Part 530, subpart C: Special salary rates.

Part 531, subparts B, D, and E: Determining rate of basic pay,

within-grade increases, and quality step increases.

Part 531, subpart F: Locality pay--This waiver applies only to the

extent necessary to allow demonstration project employees to be treated

as General Schedule employees, and basic rates of pay under the

demonstration project to be treated as scheduled annual rates of pay.

This waiver does not apply to ST employees who continue to be covered

by these provisions, as appropriate. Employees in Payband V of the E&S

occupational family are treated as ST employees for the purposes of

these provisions.

Part 536: Grade and pay retention--This waiver applies only to the

extent necessary to (1) replace ``grade'' with ``payband'; (2) provide

that pay retention provisions do not apply to conversions from General

Schedule special rates to demonstration project pay, as long as total

pay is not reduced, and to reductions in pay due solely to the removal

of a supervisory pay adjustment upon voluntarily leaving a supervisory

position; (3) provide that an employee on pay retention whose

performance rating is ``U'' is not entitled to 50 percent of the amount

of the increase in the maximum rate of basic pay payable for the

payband of the employee's position; and, (4) ensure that for employees

of Payband V of the E&S occupational family, payband retention is not

applicable and pay retention provisions are modified so that no rate

established under these provisions may exceed the rate of basic pay for

GS-15, step 10 (i.e., there is no entitlement to retained rate). This

waiver does not apply to ST employees unless they move to a GS-

equivalent position under the demonstration project under conditions

that trigger entitlement to pay retention.

Part 550.703: Severance Pay--This waiver applies only to the extent

necessary to modify the definition of ``reasonable offer'' by replacing

``two grade or pay levels'' with ``one band level'' and ``grade or pay

level'' with ``band level'.

Part 550.902: Hazardous Duty Differential--This waiver applies only

to the extent necessary to allow demonstration project employees to be

treated as General Schedule employees. This waiver does not apply to ST

employees or employees in Payband V of the E&S occupational family.

Part 575, subparts A, B, C, and D: Recruitment Bonuses, Relocation

Bonuses, Retention Allowances and Supervisory Differentials--This

waiver applies only to the extent necessary to allow employees and

positions under the demonstration project covered by paybanding to be

treated as employees and positions under the General Schedule. This

waiver does not apply to ST employees who continue to be covered by

these provisions, as appropriate. Employees in Payband V of the E&S

occupational family are treated as ST employees for the purposes of

these provisions.

Part 752.401 (a)(3): Adverse Actions--This waiver applies only to

the extent necessary to replace ``grade'' with ``payband.''

Part 752.401(a)(4): Adverse Actions--This waiver applies only to

the extent necessary to provide that adverse action provisions do not

apply to (1) conversions from General Schedule special rates to

demonstration project pay, as long as total pay is not reduced and (2)

reductions in pay due to the removal of a supervisory pay adjustment

upon voluntary movement to a nonsupervisory position.

Appendix A: Occupational Series by Occupational Family

I. Engineers & Scientists

0801 General Engineer

0806 Materials Engineer

0808 Architecture

0810 Civil Engineer

0819 Environmental Engineer

0830 Mechanical Engineer

0850 Electrical Engineer

0854 Computer Engineer

0855 Electronics Engineer

0861 Aerospace Engineer

0892 Ceramics Engineer

0893 Chemical Engineer

0896 Industrial Engineer

0899 Student Trainee (Engr)

1301 Physical Scientist

1310 Physicist

1320 Chemist

1321 Metallurgist

1515 Operations Research Analyst

1520 Mathematician

1529 Mathematician Stat

1550 Computer Scientist

II. Technical and Business Support

0028 Environ Protec Specialist

0301 Data & Configuration Management, Standardization

0301 Misc Admin & Program

0334 Computer Specialist

0340 Program Manager

0341 Administrative Officer

0342 Support Services Spec

0343 Mgmt/Prog Analyst

0346 Log Mgt Spec

0391 Telecommunications

0560 Budget Analyst

0802 Engineering Technician

0809 Construction Rep

0856 Electronics Technician

1001 General Arts & Information

1040 Language Specialist

1082 Technical Information Writer

1083 Technical Writer/Editor

1102 Contract Specialist

1150 Industrial Specialist

1176 Building Manager

1311 Physical Sciences Tech

1410 Librarian (Phy Sci & Engr)

1412 Technical Information Spec

1499 Student Trainee

1515 Operations Research Analyst (Cost)

1521 Mathematics Technician

1670 Equipment Specialist

1910 Quality Assurance Specialist 42001 General Supply Spec

III. General Support

0085 Guard

0302 Messenger

0303 Misc Clerk and Asst

0305 Mail Clerk

0312 Clerk-Stenographer

0318 Secretary

0326 Ofc Automation Clerk

0344 Management Assistant

0561 Budget Assistant

1106 Procurement Clerk

1411 Library Technician

2005 Supply Technician

BILLING CODE 6325-01-U

[[Page 34897]]

[GRAPHIC] [TIFF OMITTED] TN27JN97.011

[[Page 34898]]

[GRAPHIC] [TIFF OMITTED] TN27JN97.012

[[Page 34899]]

[GRAPHIC] [TIFF OMITTED] TN27JN97.013

[[Page 34900]]

[GRAPHIC] [TIFF OMITTED] TN27JN97.014

[[Page 34901]]

[GRAPHIC] [TIFF OMITTED] TN27JN97.015

BILLING CODE 6325-01-C

Appendix C--Performance Elements

All employees will be rated against at least the five generic

performance elements listed through ``e'' below. Technical competence

is a mandatory critical element. Other elements may be identified as

critical by agreement between the rater and the employee. In case of

disagreements, the decision of the supervisor will prevail. Generally,

any performance element weighted 25 or higher should be critical.

However, only those employees whose duties require manager/leader

responsibilities will be rated on element ``f.'' Supervisors will be

rated against an additional critical performance element, listed at

``g'' below:

a. Technical Competence. Exhibits and maintains current technical

knowledge, skills, and abilities to produce timely and quality work

with the appropriate level of supervision. Makes prompt, technically

sound decisions and recommendations that add value to mission

priorities and needs. For appropriate occupational families, seeks and

accepts developmental and/or special assignments. Adaptive to

technological change. (Weight range: 15 to 50)

b. Working Relationships. Accepts personal responsibility for

assigned tasks. Considerate of others' views and open to compromise on

areas of difference, if allowed by technology, scope, budget, or

direction. Exercises tact and diplomacy and maintains effective

relationships, particularly in immediate work environment and teaming

situations. Always willing to give assistance. Shows appropriate

respect and courtesy. (Weight Range: 5 to 15)

c. Communications. Provides or exchanges oral/written ideas and

information in a manner that is timely, accurate and cogent. Listens

effectively so that resultant actions show understanding of what was

said. Coordinates so that all relevant individuals and functions are

included in, and informed of, decisions and actions. (Weight Range: 5

to 15)

d. Resource Management. Meets schedules and deadlines, and

accomplishes work in order of priority; generates and accepts new ideas

and methods for increasing work efficiency; effectively utilizes and

properly controls available resources; supports organization's resource

development and conservation goals. (Weight Range: 15 to 50)

e. Customer Relations. Demonstrates care for customers through

respectful, courteous, reliable and conscientious actions. Seeks out

and develops solid working relationships with customers to identify

their needs, quantifies those needs, and develops practical solutions.

Keeps customer informed and prevents surprises. Within the scope of job

responsibility, seeks out and develops new programs and/or reimbursable

customer work. (Weight Range: 10 to 50)

f. Management/Leadership. Actively furthers the mission of the

organization. As appropriate, participates in the development and

implementation of strategic and operational plans of the organization.

Develops and implements tactical plans. Exercises leadership skills

within the environment. Mentors junior personnel in career development,

technical competence, and interpersonal skills. Exercises due

responsibility of technical/acquisition/organizational positions

assigned to them. (Weight Range: 0 to 50)

g. Supervision/EEO. Works toward recruiting, developing,

motivating, and retaining quality team members; takes timely/

appropriate personnel actions, applies EEO/merit principles;

communicates mission and organizational goals; by example, creates a

positive, safe, and challenging work environment; distributes work and

empowers team members. (Weight Range: 15 to 50)

BILLING CODE 6325-01-U

[[Page 34902]]

[GRAPHIC] [TIFF OMITTED] TN27JN97.016

[[Page 34903]]

[GRAPHIC] [TIFF OMITTED] TN27JN97.017

[FR Doc. 97-16850 Filed 6-26-97; 8:45 am]

BILLING CODE 6325-01-C