Science and Technology Reinvention Laboratory Personnel Demonstration Project at the Naval Sea Systems Command Warfare Centers

SUMMARY: The National Defense Authorization Act of 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 Warfare

Centers beginning on March 3, 1998.

FOR FURTHER INFORMATION CONTACT:

Warfare Centers: Shirley Scott, Deputy Demonstration Project Manager,

NSWCDD, HR Department, 17320 Dahlgren Road, Dahlgren, VA 22448, 540-

653-4623.

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. Background

Since 1966, at least 19 studies of Department of Defense (DoD)

laboratories have been conducted on laboratory quality and personnel.

Almost all of these studies have recommended improvements in civilian

personnel policy, organization, and management. The Warfare Centers'

Personnel Demonstration Project involves a simplified classification

system for GS employees, performance development and incentive pay

systems, a streamlined reduction-in-force system, and a simplified

examining and appointment process.

2. Overview

Twenty-three letters were received and one individual 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 Warfare Centers' Executive Group and

the Commanding Officers and Executive Directors of the seven Warfare

Center Divisions 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). General Management Issues

Comments: Several comments expressed concern over a Demonstration

Project which provides additional flexibility to supervisors and

suggested that these flexibilities will allow for or promote abuses and

compromises of the merit system. With the feeling that many supervisors

currently do not properly execute supervisory responsibilities or

utilize the authority and tools provided under the current system,

these employees fear a new system that gives supervisors additional

flexibility over their career and pay. Several comments mentioned that

no checks or oversight seem apparent and that management accountability

is lacking under the Project.

Response: The Warfare Centers acknowledge that the Personnel

Demonstration Project provides increased authority and responsibility

to supervisors, particularly in those areas impacting employees' pay.

The Office of Personnel Management's (OPM's) experience with other

Personnel Demonstration Projects, including the ``China Lake'' Project,

does not support the assumption that increased supervisory discretion

and authority leads to merit system abuses. However, the Warfare

Centers are sensitive to the concerns expressed by many of the comments

and are committed to holding supervisors accountable for the proper use

of increased authorities and flexibilities. To assist supervisors in

carrying out their new responsibilities, the Demonstration Project

currently requires that supervisors be trained on the new system and

receive feedback from a number of sources, including employees, on

their supervisory skills and leadership behaviors. Aggregate data from

the feedback process will be made available to the top management of

the Warfare Center Divisions and will be used to monitor and identify

further supervisory development and training needs. Additionally,

extensive independent evaluations of the Personnel Demonstration

Project will be conducted by OPM's Personnel Resources and Development

Center (PRDC) over the first five years of the project. The results of

these evaluations will provide the Warfare Centers with information as

to whether specific provisions of the project need to be modified,

continued as is, or curtailed.

(B). Career Path and Broad Bands

Comments received on this aspect of the Personnel Demonstration

Project were related to several subtopics.

(1) Assignment of Occupations to Career Paths

Comments: Several comments were submitted raising concern about the

identification of occupations to career paths. These comments expressed

a belief that such segmentation of the workforce is counterproductive

to a teaming environment and may lead to a form of career path or

series-based discriminatory actions. For the most part, these comments

were specifically related to the assignment of GS-346, Logistician

positions, to the Administrative/Technical (NT) Career Path.

Response: The Career Paths selected for the Warfare Centers'

Personnel Demonstration Project are substantially similar to those used

in the ``China Lake'' Personnel Demonstration Project with a few

modifications made to further streamline the classification and

compensation processes. The Warfare Centers' Personnel Demonstration

Project groups positions by occupations under one of three Career

Paths--Scientific/Engineering (ND); Administrative/Technical (NT); and

General Support (NG). Each career path covers occupations similarly

treated in regard to type of work, typical career progression, and

qualification requirements. Using these criteria, positions designated

as Logistician, GS-346 series, are assigned to the Administrative/

Technical (NT) Career Path.

(2) Band Levels and Salary Ranges

Comments: Two individuals expressed concern that the proposed broad

banding structure reduces the number of formal promotion events,

removes the social distinctions between project leaders and workers,

and results in a loss of status currently associated with the General

Schedule grade level. Another individual offered an opinion that a

system which includes seventeen

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broad bands is contrary to the stated objective of making ``the

distinctions between levels easier to discern and more meaningful.''

Others perceive that the proposed broad banding system serves to

unfairly discriminate against women and minorities in that these groups

of employees are predominately assigned to the Administrative and

Technical (NT) and General Support (NG) Career Paths whose full

performance levels are lower than that assigned to the Scientific and

Engineering (ND) Career Path. Comments also questioned the use of a

salary overlap between the broad bands and raised concern over the

reallocation of pay upon conversion for special salary rate employees.

Response: The Warfare Centers recognize there may be a concern over

the perceived loss of status and frequency of promotions that result

from a broad banding system. Broad banding systems, by their very

nature, serve to reduce the number of formal promotion events and to

remove some of the distinctions among positions common to the General

Schedule classification system. Results of the ``China Lake'' project

did not indicate that this was a continuing concern of the workforce

during the life of the project. The key objectives of the Warfare

Centers' Broad Banded Classification System are to simplify the current

classification system, reduce distinctions between levels of work, and

provide managers greater flexibility to make assignments as work needs

warrant.

The grouping of General Schedule grades into broad bands under each

of the three career paths was based on the typical career progressions

and full performance level of positions under the current General

Schedule system. In addition, the salary progression of each career

path is reflective of typical salary progression present in the non-

Federal sector. It was not based on non-merit factors such as race,

sex, gender, age, or national origin. Experience of the ``China Lake''

Project, used as a model for the Warfare Centers' Personnel

Demonstration Project, did not support the concerns. To assist the

Warfare Centers in monitoring this important issue, data on band level,

salary, and workforce demographics, supplemented by perceptual data,

are included in the planned evaluation strategy. Evaluation results

will alert the Warfare Centers of any unintended outcomes of the broad

banded classification system and will serve as the basis for decisions

to modify, continue as currently stated, or to curtail the

Demonstration Project.

The salary range of each broad band, with the exception of Band I

of each career path and ND VI, has been extended to cover the salary

range of the next lower General Schedule grade. The extended salary

range serves to replicate the overlap found in the current General

Schedule system and was included to facilitate assignment and pay

setting flexibilities and to control costs that would otherwise occur

upon promotions. The pay special salary rate employees receive under

the current system is in many cases encompassed within the salary range

of the broad banding system. The special provisions for reallocating

the pay of special salary rate employees were included in the project

to avoid payment of an unintended windfall.

(3) Lack of Salary Progression for GS-13 Scientists and Engineers

Comment: Several comments were received on the lack of salary

progression for those individuals who will convert into the Personnel

Demonstration Project at the top end of the recognized full performance

level, in particular Scientists and Engineers at the GS-13 level. One

individual suggested a modification to the Project to have a salary

range extending beyond step 10 of the GS-13 grade level.

Response: This issue results from high grade controls that impact

on all of the Science and Technology Reinvention Laboratory Personnel

Demonstration Projects. Any negative impact under the Demonstration

Project will be no greater than that under the current General Schedule

system.

(C). Performance Appraisal and Performance Development System

Comment: Concern was expressed over the proposed change to a two

level (pass/fail) rating system stating that such a system would de-

motivate employees. Others expressed concern about the lack of

specificity in the requirements for setting and communicating

performance expectations, i.e., timing, format, documentation

requirements. Additionally, comments were made that the non-adverse

reduction to a lower band level would be perceived by employees as an

adverse action.

Response: Since the initial development of the Personnel

Demonstration Project, the Office of Personnel Management has modified

its regulations governing Performance Appraisal Systems granting

agencies the option of adopting a two level rating system. The planned

evaluation of this Demonstration Project will assist in providing data

on the merits of a pass/fail system.

The current performance appraisal system prescribes documentation

of performance standards and elements, includes a requirement for

periodic (mid-year) performance discussions, and establishes the format

for specified documentation requirements. Yet, as acknowledged by the

comments, many perceive the current system as not working despite these

requirements. The Warfare Centers believe it is essential that

employees fully understand performance expectations and will focus

significant training for supervisors to that end. This training will

cover setting and communicating performance expectations, providing

feedback, and communicating the linkage between performance

expectations and the incentive pay process. Furthermore, the Divisions

will determine documentation requirements which meet their specific

organizational needs, values, and cultures.

The reduction in band level may be taken only after an employee has

been placed on and failed a Performance Plan. Safeguards have been

provided in the Demonstration Project to ensure the decision to use the

non-adverse assignment to a lower band is well documented, used

appropriately, and allow employees avenues of redress.

(D). Incentive Pay System

Comment: A number of comments raised concern over the subjective

nature of the incentive pay criteria leaving the employee's salary

progression largely at the discretion of the supervisor. Additionally,

several viewed the criteria as being outside the control of the

employee and bearing little relationship to the employee's actual

performance. Several raised concern on management's ability to adjust

the size of the incentive pay fund in an attempt to maintain or lower

labor rates or delay the need for a reduction-in-force. Also one

comment expressed concern that the incentive payout would be limited to

granting bonus pay in lieu of salary increases, thus negatively

impacting the employee's retirement pay.

Response: The Warfare Centers recognize that employee perceptions

of the success of the overall Personnel Demonstration Project will

largely be governed by their perceptions of the how well the Warfare

Centers manage the incentive pay system. A key flexibility to the

Demonstration Project is to provide the Divisions the authority to

manage an incentive pay system which best meets their needs in terms of

culture, values, and financial situations. The specific criteria and

process for incentive pay decisions as

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well as the size of the incentive pay fund are some of the many aspects

of the Project which have been delegated to the Warfare Centers

Division and will not be defined at the Warfare Center level. The

project provides for supervisory training which will stress the

importance of establishing, interpreting, and communicating incentive

pay criteria to help employees understand what is expected in order to

receive incentive pay. Additionally, in exercising these authorities,

each Warfare Center Division will be prepared to communicate the

criteria, process, and decisions on the use of the incentive pay fund

to its workforce.

(E). Reduction-in-Force

Comment: Two comments included a concern that the revised

Reduction-In-Force system would provide management the ability to

target individuals and stated a belief that this targeting would be in

violation of veterans' preference rights or laws precluding

discrimination based on age. Additional comments raised concern about

the impact of the revised competitive area definition. This is seen as

limiting placement considerations and as a major threat to job

security.

Response: In developing the Personnel Demonstration Project, the

Warfare Centers adopted as one of the guiding principles the

preservation of veterans' preference laws. Extensive review of the

project interventions was conducted to ensure that no aspect of

veterans' preference entitlement has been adversely impacted.

Additionally, simulated reduction-in-force scenarios were conducted to

ensure that at a minimum the proposed changes did not adversely impact

on veterans, women, minorities and other protected groups when compared

with the current reduction-in-force system. The Personnel Demonstration

Project, including the revised reduction-in-force changes, may be

implemented within local bargaining units only through the collective

bargaining process. In the event that full agreement is not reached

prior to the need to conduct a reduction-in-force, the competitive area

was redefined to ensure that Demonstration Project participants and

non-Demonstration Project participants do not compete unfairly for

placement considerations.

(F). Miscellaneous Comments

Additional comments received on the Project Proposal requested that

the project remove the ceiling on overtime rates. One comment perceived

an inconsistency in the assignment of ``non-professional technicians''

to the Administrative/Technical (NT) career path and the exemption from

overtime provisions based on professional criteria. Another comment

communicated refusal to waive any portion of rights conveyed to

citizens by the U.S. Constitution.

Response: The Personnel Demonstration Project covers those

interventions which the Warfare Centers believe to be fundamentally

critical to successful mission execution and organizational excellence

and was not intended to address all problems associated with the

current General Schedule system. Together the interventions proposed

provide the Warfare Centers with the ability to obtain, develop,

incentivize, and retain high performers while being responsive to

business considerations and overall workforce costs. The project does

not modify the overtime provisions and the definitions of exemption

criteria under the Fair Labor Standards Act covered by Title 5, CFR

Part 551. This Demonstration Project has been developed under the

authority granted to agencies in Section 4703 of Title 5. Individual

permission is not needed to implement the Project. There is no

authority nor intent to waive individual constitutional rights.

3. Demonstration Project Clarifications

To clarify how classification appeals are to be processed under the

personnel demonstration project, additional language was incorporated

into section III.B.1. In addition, minor editorial and technical

clarifications were made to improve the final version of the personnel

demonstration project.

Office of Personnel Management.

Janice R. Lachance,

Director.

Table of Contents

I. Executive Summary

II. Introduction

A. Purpose

B. Problems With Present System

C. Changes Required/Expected Benefits

D. Participating Organizations/Mission

E. Participating Employees

F. Employee/Labor Participation

III. Methodology

A. Project Design

B. Personnel System Changes

1. Classification/Pay

2. Performance Development System

3. Incentive Pay System

4. Reduction-In-Force (RIF)

5. Competitive Examining/Distinguished Scholastic Appointments

C. Project Implementation

D. Entry Into/Exit From The Project

E. Project Duration

IV. Evaluation Plan

V. Waivers of Law/Regulation

VI. Cost

VII. Project Oversight/Management

I. Executive Summary

The Naval Surface Warfare Center and the Naval Undersea Warfare

Center, designated as Science and Technology Reinvention Laboratories,

wish to conduct a Personnel Demonstration Project similar in nature to

that of the 1980 Demonstration Project approved for the Naval Weapons

Center, China Lake, and Naval Ocean Systems Center, San Diego. The

Warfare Centers' project includes the following key project components:

A Broad Banding Classification and Pay System for ``white collar''

employees; a Performance Development System; an Incentive Pay System; a

new Reduction-in-Force (RIF) system; and a Competitive Examining and

Appointment System. The Warfare Centers' project addresses an

organization which is substantially larger (over 23,000 employees), has

greater diversity of mission than previous projects, and has extensive

union involvement at all major sites. In addition, the project plan has

been developed with on-going involvement of the various unions

represented in the Warfare Centers.

II. Introduction

A Purpose

The overall goal of the Demonstration Project is to implement a

Human Resource Management System that facilitates mission execution and

organization excellence and responds to today's dynamic environment of

downsizing, restructuring and closures by obtaining, developing,

utilizing, incentivizing and retaining high performing employees; and

adjusting workforce levels to meet program and organizational needs.

The system to be demonstrated has the flexibilities to accommodate and

support wide-ranging activity missions, strategies and cultures. It is

responsive to business considerations and permits a high degree of

control over workforce costs. Clearly, it is more streamlined and

understandable for those who will use it as well as those affected by

it. Most importantly, it is focused not just on the needs of the

organization, but also on the needs of the people who are the

organization.

These objectives reflect the Federal and DoD goals of creating a

government that works better and costs less, and a flexible system that

can reduce, restructure or renew to meet diverse mission needs, expand

or contract a workforce quickly, respond to workload exigencies, and

contribute to quality

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products, people and workplaces. The objectives also align with the

Federal and DoD values and guiding principles of empowering employees

to get results, maximum flexibility tempered with accountability,

innovation and continuous improvement, caring for people during

downsizing, and vital partnerships and teaming with all the

stakeholders in the process.

B. Problems With Present System

The Warfare Centers find the current Federal Personnel System to be

cumbersome, confusing, and unable to provide the flexibility necessary

to respond to the current mandates of downsizing, restructuring, and

possible closure while trying to maintain a high level of mission

excellence. The present system--a patchwork of laws, regulations, and

policies--often inhibits rather than supports the goals of developing,

recognizing, and retaining the employees needed to realign the

organization with its changing fiscal and production requirements.

The current Civil Service General Schedule (GS) system has 15

grades with 10 levels each and involves lengthy, narrative, individual

position descriptions, which have to be classified by complex, OPM-

mandated position classification standards. Because these standards

have to meet the needs of the entire federal government, they are often

not relevant to the needs of the Warfare Centers and are frequently

obsolete. Distinctions between levels are often not meaningful.

Currently, standards do not provide for a clear progression beyond the

full performance level, especially for science/engineering occupations

where career progression through technical as well as managerial career

paths is important.

In addition, there are limited mechanisms for dealing with an

employee who has been promoted out of his/her level of expertise or

who, after a successful career, has been unable to gain the skills

required of a new work environment. In most cases, the only possible

action may be a reduction in grade. Under the current system a demotion

to a lower grade is considered an adverse action even if there is no

loss in pay. Under the proposal, a reduction in band level without a

loss in pay will not be considered an adverse action.

Performance Management systems require additional emphasis on

continuous, career-long development in a work environment characterized

by an ever increasing rate of change. Since past performance and/or

longevity are the factors on which pay raises are currently assessed,

there is often no positive correlation between compensation and

performance contributions nor value to the organization. These limited

criteria do not take into account the future needs of the organization

nor other culturally relevant criteria which an organization may wish

to use as incentives.

The present Reduction in Force (RIF) process is highly complicated

and relatively unresponsive to requirements for rapid work force

restructuring and retention of employees with mission appropriate

skills. RIF is confused by an augmented service credit for performance

that is based in a performance appraisal system fraught with

contention. Round I adds complexity, confusion, and uncertainty. Cost

savings expected from RIF are drastically reduced by the inordinate

administrative costs of the process and the likelihood that the

employee ultimately separated will be at a lower grade than the

originally targeted position. Additionally there is the expense of

retained grade and retained pay. Current RIF procedures impact

negatively on morale because of the high number of people affected and

frequent misunderstandings of a complicated system that leaves affected

employees wondering why they have been ``targeted.''

And finally, the complexity of the current examining system creates

delays in hiring. Line managers find the complexity limiting as they

attempt to accomplish timely recruitment of needed skills. To compete

with the private sector for the best talent available, they need a

process which is streamlined, easy to administer, and allows for timely

job offers.

C. Changes Required/Expected Benefits

The proposed Demonstration Project responds to problems in the

classification system with a Broad Banding Classification system for GS

employees; to problems in the current performance management system

with a Performance Development and Incentive Pay System; to the

problems of the existing RIF procedures with a streamlined RIF system;

and to problems of complicated hiring and examining procedures with a

simplified examining and appointment process.

D. Participating Organizations/Mission

Both the Naval Surface Warfare Center and the Naval Undersea

Warfare Center will participate in the project. The Warfare Centers are

comprised of a total of seven Divisions with 14 major sites nationwide.

The sites are diverse in employment profiles and size and have

bargaining unit populations ranging from a small percentage to more

than half of the workforce. These organizations operate throughout the

full spectrum of research, development, test and evaluation,

engineering and fleet support.

The Warfare Centers are Defense Business Operations Fund (DBOF)

activities. Under DBOF, the cost of operating is paid by billing

customers for work performed. The Warfare Centers seek to maximize

management flexibility to control expenditures since the continued

economic viability of a DBOF activity depends in large measure on

remaining cost competitive with other organizations.

E. Participating Employees

This Demonstration Project will involve civilian personnel at all

Warfare Center sites. There are 14 major sites (over 200 civilian

personnel) and many smaller sites. Currently 23,697 civilians are

employed as shown in Figure 1. The intent of the plan is to cover all

civilian appropriated fund employees at all sites with the exception of

the members of the Senior Executive Service. While the Demonstration

Project, and its five components, cover all General Schedule (GS)

employees, the Federal Wage System (FWS) employees are included only

for purposes of changes in the Performance Development, Reduction-In-

Force and Competitive Examining systems. Likewise, Senior Level (SL)

and Scientific and Technical (ST) employees are covered only under the

Incentive Pay, Performance Development and Reduction-In-Force systems.

The Demonstration Project may be implemented incrementally throughout

the Warfare Centers. The Demonstration Project will be implemented in

bargaining units when those units so request and a negotiated agreement

is reached. Approximately fifty percent of the workforce is represented

by unions.

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F. Employee/Labor Participation

One of the keys to developing a project plan sensitive to the

multiplicity of management and employee needs has been the involvement

of a Steering Committee composed of representatives from the Warfare

Center Divisions and six national unions having bargaining units at the

Warfare Center sites. The American Federation of Government Employees

(AFGE), Metal Trades Council (MTC), International Association of

Machinists (IAM), National Association of Government Employees (NAGE),

the National Federation of Federal Employees (NFFE) and Fraternal Order

of Police (FOP) represent more than half of the more than 25,000

employees in a variety of occupational groups at Warfare Center sites

across the United States. Appendix A further describes the employee/

union participation in this effort. The Steering Committee developed a

project plan capable of meeting the seemingly differing, sometimes

conflicting, goals of management and the unions. The Steering Committee

substantially altered the original concept to address those needs in

order to provide a viable implementation framework capable of meeting

the wide variety of cultures and needs across the Warfare Center

spectrum. The Steering Committee is also working to foster the

establishment of partnerships within the Warfare Centers.

The Steering Committee agreed to the following language with

respect to the implementation of the Demonstration Project in the

Warfare Center bargaining units. ``Essential to the success of the

Demonstration Project within a collective bargaining unit is the

explicit choice of the parties to freely enter into the project with

mutual agreement on all provisions associated with the project. To that

end, either party will have the option NOT to enter the project up to

the point where both parties sign a collective bargaining agreement

covering the Demonstration Project and, if required, that agreement is

ratified and approved. Further the parties may include in the contract

provisions for evaluating, modifying and leaving the project during the

life of the contract.'' Any disputes or impasses that arise in

connection with the negotiation on the implementation of the

Demonstration Project will be subject to mediation but not binding

impasse procedures. For any bargaining subsequent to adoption of the

Demonstration Project, the parties shall use impasse procedures defined

in 5 U.S.C. 7119 unless alternative impasse procedures have been

negotiated. In the event Executive Order 12871 is no longer in effect,

the parties within the Demonstration Project will continue to negotiate

issues covered by 5 U.S.C. 7106(b)(1) to the extent those issues impact

on the provisions of the Demonstration Project. Within bargaining

units, violations of provisions of the Demonstration Project may be

covered by the negotiated grievance procedure.

This Demonstration Project was developed with management and union

input through a collaborative process; however, it was agreed that

union participation did not necessarily constitute full and complete

endorsement of all details of the project. The Project will be

implemented in bargaining units only after there is full agreement

through the collective bargaining process.

While understanding that each bargaining unit will make its own

choice about participating in the Demonstration Project, the Steering

Committee has endeavored to create a project plan to fulfill the mutual

interests of management and employees while supporting the long term

objective of vital, competitive Warfare Centers capable of developing

and delivering the best possible technology to their customers.

III. Methodology

A. Project Design

An overarching objective in the project design has been the

development of a personnel system that provides a maximum opportunity

for local ``tailoring'' to meet the variety of requirements of

organizations engaged in missions ranging from theoretical research

into submarine vulnerability and survivability to the storage of

torpedoes. While the Divisions seek to recruit and retain world class

engineers and scientists in order to remain viable as laboratories,

they must also meet the development and motivational needs of an

extraordinarily diverse workforce; i.e., employees ranging from small

arms repairers in Crane, Indiana to program analysts in Newport, Rhode

Island. In order to accomplish that end, the goal is to begin the

process of delegating decision making to the people who know the most

about what they need and how to get their work accomplished: the

Divisions and sites.

While much of the Demonstration Project will be applied uniformly,

there are decisions which will be delegated to

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the Divisions and activities so that the needs and cultures of those

organizations may be taken into account. Decisions at the local level

will be made through the collective bargaining process.

B. Personnel System Changes

1. Classification/Pay

A fundamental element of the system is a simplified white collar

classification and pay component. The proposed broad banding scheme

reduces the fifteen GS grade levels and the Senior Level (SL) and

Scientific & Technical (ST) pay levels, into five to six broad pay

bands. (See Figure 2) GS occupations are further broken down into three

separate career paths: Scientific and Engineering (ND), Administrative

and Technical (NT), and General Support (NG).

The OPM-developed classification standards are replaced by a small

number of one-page, generic benchmark standards developed within the

Demonstration Project. These standards also serve as the core of the

position description and replace lengthy individually tailored position

descriptions. These generic level descriptions encompass multiple

series and provide maximum flexibility for the organization to assign

individuals consistent with the needs of the organization, established

level or rank that the individual has achieved, and the individual's

qualifications. Career progression between levels will occur by

promotion, and pay progression within levels will occur through

incentive pay.

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The Warfare Centers' long experience with industrial funding will

ensure their ability to control costs, an essential requirement in

today's environment.

a. Career Paths. The Warfare Centers request exemption from the

current GS classification system and substitute career paths and band

levels. The designated career paths are: Scientific and Engineering

(ND), Administrative and Technical (NT), and General support (NG). Like

the China Lake system, the GS classification series would be retained.

More detailed descriptions of the career paths and the classification

series for each path are provided below. The breakdown of occupational

series to career paths reflects only those occupations which currently

exist within the two Warfare Centers. Additional series may be added as

a result of changes in mission requirements or OPM recognized

occupations. These additional series will be placed in the appropriate

career path consistent with the established career path definitions.

SCIENTIFIC AND ENGINEERING: Professional engineering positions and

scientific positions in the physical, biological, mathematical, and

computer sciences; and student positions for training in these

disciplines. Series and titles included in the path are: 0401, General

Biological Science Series; 0403, Microbiology Series; 0408, Ecology

Series; 0440, Genetics Series; 0460, Forestry Series; 0471, Agronomy

Series; 0499, Biological Science Student Trainee Series; 0801, General

Engineering Series; 0803, Safety Engineering Series; 0804, Fire

Protection Engineering Series; 0806, Materials Engineering Series;

0807, Landscape Architecture Series; 0808, Architecture Series; 0810,

Civil Engineering Series; 0819, Environmental Engineering Series; 0830,

Mechanical Engineering Series; 0840, Nuclear Engineering Series; 0850,

Electrical Engineering Series; 0854, Computer Engineering Series; 0855,

Electronics Engineering Series; 0861, Aerospace Engineering Series;

0871, Naval Architecture Series; 0892, Ceramic Engineering Series;

0893, Chemical Engineering Series; 0894, Welding Engineering Series;

0896, Industrial Engineering Series; 0899, Engineering and Architecture

Student Trainee Series; 1301, General Physical Science Series; 1306,

Health Physics Series; 1310, Physics Series; 1313, Geophysics Series;

1320, Chemistry Series; 1321, Metallurgy Series; 1330, Astronomy and

Space Science Series; 1350, Geology Series; 1360, Oceanography Series;

1372, Geodesy Series; 1386, Photographic Technology Series; 1399,

Physical Science Student Trainee Series; 1515, Operations Research

Series; 1520, Mathematics Series; 1529, Mathematical Statistician

Series; 1530, Statistician Series; 1550,

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Computer Science Series; 1599, Mathematics and Statistics Student

Trainee Series.

ADMINISTRATIVE AND TECHNICAL: Professional or specialist positions

in such administrative, technical and managerial fields as finance,

procurement, human resources, computer, legal, librarianship, public

information, safety, social sciences, and program management and

analysis; nonprofessional technician positions that support scientific

and engineering activities through the application of various skills

and techniques in electrical, mechanical, physical science, biology,

mathematics, and computer fields; and student positions for training in

these disciplines. Series and titles included in this path are: 0018,

Safety and Occupational Health Management Series; 0020, Community

Planning Series; 0028, Environmental Protection Specialist Series;

0080, Security Administration Series; 0099, General Student Trainee

Series; 0101, Social Science Series; 0110, Economist Series; 0132,

Intelligence Series; 0170, History Series; 0180, Psychology Series;

0185, Social Work Series; 0187, Social Services Series; 0188,

Recreation Specialist Series; 0201, Personnel Management Series; 0205,

Military Personnel Management Series; 0212, Personnel Staffing Series;

0221, Position Classification Series; 0230, Employee Relations Series;

0233, Labor Relations Series; 0235, Employee Development Series; 0260,

Equal Employment Opportunity Series; 0299, Personnel Management Student

Trainee Series; 0301, Miscellaneous Administration and Program Series;

0334, Computer Specialist Series; 0340, Program Management Series;

0341, Administrative Officer Series; 0342, Support Services

Administration Series; 0343, Management and Program Analysis Series;

0346, Logistics Management Series; 0391, Telecommunications Series;

0399, Administration and Office Support Student Trainee Series; 0501,

Financial Administration and Program Series; 0505, Financial Management

Series; 0510, Accounting Series; 0560, Budget Analysis Series; 0599,

Financial Management Student Trainee Series; 0602, Medical Officer

Series; 0610, Nurse Series; 0690, Industrial Hygiene Series; 0802,

Engineering Technician Series; 0809, Construction Control Series; 0818,

Engineering Drafting Series; 0856, Electronics Technician Series; 0895,

Industrial Engineering Technician Series; 0899, Engineering and

Architecture Student Trainee Series; 0905, General Attorney Series;

0950, Paralegal Specialist Series; 0962, Contact representative; 1001,

General Arts and Information Series; 1010, Exhibits Specialist Series;

1015, Museum Curator Series; 1016, Museum Specialist and Technician

Series; 1020, Illustrating Series; 1035, Public Affairs Series; 1060,

Photography Series; 1071, Audiovisual Production Series; 1082, Writing

and Editing Series; 1083, Technical Writing and Editing Series; 1084,

Visual Information Series; 1101, General Business and Industry Series;

1102, Contracting Series; 1103, Industrial Property Management Series;

1104, Property Disposal Series; 1150, Industrial Specialist Series;

1152, Production Control Series; 1173, Housing Management Series; 1176,

Building Management Series; 1199, Business and Industry Student Trainee

Series; 1222, Patent Attorney Series; 1311, Physical Science Technician

Series; 1410, Librarian Series; 1412, Technical Information Services

Series; 1420, Archivist Series; 1521, Mathematics Technician Series;

1601, General Facilities and Equipment Series; 1640, Facility

Management Series; 1654, Printing Management Series; 1670, Equipment

Specialist Series; 1701, General Education and Training Series; 1710,

Educational and Vocational Training Series; 1712, Training Instruction

Series; 1810, General Investigating Series; 1811, Criminal

Investigating Series; 1910, Quality Assurance Series; 2001, General

Supply Series; 2003, Supply Program Management Series; 2010, Inventory

Management Series; 2030, Distribution Facilities and Storage Management

Series; 2032, Packaging Series; 2050, Supply Cataloging Series; 2101,

Transportation Specialist Series; 2130, Traffic Management Series;

2150, Transportation Operations Series; 2181, Aircraft Operations

Series.

GENERAL SUPPORT: Assistant and clerical positions providing support

in such fields as budget, finance, supply, human resources; positions

providing support through application of typing, clerical, or

secretarial knowledge and skills; positions providing specialized

facilities support such as guards, police officers and firefighters;

and student positions for training in these disciplines. This path

includes the following series and titles: 0019, Safety Technician

Series; 0029, Environmental Protection Assistant Series; 0081, Fire

Protection and Prevention Series; 0083, Police Series; 0085, Security

guard Series; 0086, Security Clerical and Assistance Series; 0134,

Intelligence Aid and Clerk Series; 0186, Social Services Aid and

Assistant Series; 0189, Recreation Aid and Assistant Series; 0203,

Personnel Clerical and Assistance Series; 0204, Military Personnel

Clerical and Technician Series; 0303, Miscellaneous Clerk and Assistant

Series; 0304, Information Receptionist Series; 0305, Mail and File

Series; 0318, Secretary Series; 0322, Clerk-Typist Series; 0326, Office

Automation Clerical and Assistance Series; 0332, Computer Operation

Series; 0335, Computer Clerk and Assistant Series; 0344, Management

Clerical and Assistance Series; 0350, Equipment Operator Series; 0351,

Printing Clerical Series; 0356, Data Transcriber Series; 0361, Equal

Opportunity Assistance Series; 0382, Telephone Operating Series; 0390,

Telecommunications Processing Series; 0392, General Communications

Series; 0394, Communications Clerical Series; 0399, Administration and

Office Support Student Trainee Series; 0462, Forestry Technician

Series; 0503, Financial Clerical and Assistance Series; 0525,

Accounting Technician Series; 0530, Cash Processing Series; 0540,

Voucher Examining Series; 0544, Civilian Pay Series; 0561, Budget

Clerical and Assistance Series; 0640, Health Technician; 0647,

Diagnostic Radiologic Technologist Series; 0675 Medical Records

Technician Series; 0679, Medical Clerk Series; 0698, Environmental

Health Technician Series; 0945, Clerk of Court Series; 0986, Legal

Clerical and Assistance Series; 1087, Editorial Assistance Series;

1105, Purchasing Series; 1106, Procurement Clerical and Technician

Series; 1107, Property Disposal Clerical and Technician Series; 1411,

Library Technician Series; 1531, Statistical Assistant; 1702, Education

and Training Technician Series; 2005, Supply Clerical and Technician

Series; 2091 Sales Store Clerical Series; 2102, Transportation Clerk

and Assistant Series; 2131, Freight Rate Series; 2135, Transportation

Loss and Damage Claims Examining Series; 2151, Dispatching Series.

b. Broad Bands and Levels of Responsibility. A fundamental purpose

of broad banding is to make the distinctions between levels easier to

discern and more meaningful. In that regard, the 15 GS grade levels are

reduced to no more than six band levels, each representing a defined

level of work. Within each career path, bands typically include the

following categories of positions: student trainee and/or entry level,

developmental, full performance level, and expert and/or supervisor/

manager.

With fewer band levels than GS grades, the level of responsibility

reflected in each band typically

[[Page 64057]]

encompasses the responsibilities of two or more GS grade levels. For

example, the responsibilities of a band level covering work at the full

performance level may represent a synthesis of GS-11 and GS-12

responsibilities. For the NT career path, the responsibilities

associated with the top two bands do not precisely align with

equivalent GS levels. Some GS-14 level responsibilities band best with

GS-13 while others band best with GS-15.

Although Band VI of the ND career path covers SL and ST positions,

this does not represent a requested change in the basis for

classification or allocation of billets for these positions. The

authority to allocate new billets, classify positions and set initial

pay for assignment to SL and ST positions within the Warfare Centers

will be retained at the Assistant Secretary of the Navy (Manpower and

Reserve Affairs) level. (Accordingly, classification appeal procedures

for such positions are not affected by the provisions of this

demonstration project.) The intent of including these positions in the

ND career path was two fold: (1) to emphasize the dual career

progression for scientists and engineers in nonsupervisory and

nonmanagerial career paths; and (2) to include SL and ST employees in

all other aspects of the Demonstration Project, i.e., performance

development, incentive pay and reduction-in-force systems. Consistent

with our goal of developing, recognizing, and retaining employees

needed to meet our changing organizational needs, the Demonstration

Project seeks the authority to manage its SL and ST workforce under the

same performance development and incentive system as other employees.

This includes the authority at the Division level to adjust the pay of

SL and ST employees up to Level IV of the Executive Schedule. Incentive

pay decisions will be made against criteria relevant to the needs of

the organization including the criticality and difficulty of the

position, critical skills, and current salary level of the employees.

c. Simplified Classification Process. A limited number of Warfare

Center one-page generic, level descriptors that also serve as the core

of preclassified position descriptions will be created within the

Demonstration Project. Those descriptions may be further tailored with

an addendum to provide information on Fair Labor Standards Act (FLSA)

coverage, selective placement factors, specialized knowledge/skills/

abilities, etc. Within the Demonstration Project, the term

``classification of a position'' for positions covered by broad banding

is defined as the placement of a position in its appropriate career

path, occupational series, and band level based on the application of

standards (referred to as level descriptions or benchmark standards)

established at the Warfare Center level. Line managers will be

meaningfully involved in the classification process to make it more

relevant to their organization's needs.

d. Classification Appeals. (Classification appeal procedures for SL

and ST employees placed in Band VI of the ND career path remain as

currently provided for and are not affected by the appeal procedures

described in this demonstration project.) An employee may appeal the

career path, series, or broad band level of his or her position at any

time. When doing so, the employee must formally raise the areas of

concern to the supervisor in the immediate chain of command. If an

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

then appeal to the DOD appellate level via the employee's chain of

command and the Warfare Centers' Demonstration Project Office. Only

after DOD has rendered a decision under the provisions of this

demonstration project, may an employee file an appeal with the Office

of Personnel Management. 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 demonstration project classification

criteria, the accuracy of the level descriptor, or the pay setting

criteria; the assignment of occupational series to a career path; 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 is based upon

the demonstration project classification criteria. Case files will be

forwarded for adjudication through the servicing human resources

organization and will include copies of the employee's level

descriptor, the addendum, and a copy of the Warfare Centers'

classification criteria along with other documents or information

required by the Office of Personnel Management.

e. Simplified Assignment Process. Today's environment of downsizing

and workforce transition mandates that the organization has maximum

flexibility to assign individuals. Broad banding can be used to address

these needs. As a result of the assignment to a particular level

descriptor, the organization will have maximum flexibility to assign an

employee within broad descriptors 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 currently level descriptor. Such assignments within the

coverage of the generic descriptors are accomplished as realignments

and do not constitute a position change. For instance, 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.

f. Broad Bands and Salary Ranges. The basis for the Demonstration

Project pay system is each band level having a basic salary range that

exactly corresponds to salaries of three or more GS grade levels. This

continued linkage with the GS system will result in adjustments to the

salary ranges through future general and locality pay increases under

the General Schedule System. To more closely replicate the salary

overlap found in the current GS system, there is a one grade extended

salary overlap with each lower band for bands II and above. (See Figure

3) The one exception is the band for ST and SL positions (ND VI). The

pay range for these positions will be 120% of the minimum rate of basic

pay for GS-15 up to Level IV of the Executive Schedule. The purpose of

the salary overlap is twofold. First, it is to provide pay setting

flexibilities and cost containment opportunities in promotions. This

reduces the instances of nondiscretionary promotion pay increases of

greater than 6% that may otherwise be required to advance pay to the

lower end of the next higher band level. The second purpose is to

facilitate an assignment back to the next lower level without loss in

pay when appropriate.

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g. Locality Pay and Special Salary Rates. For each band level., the

basic annual rate of pay will be adjusted to reflect the appropriate

locality pay percentage. The maximum locality rate for each band level

will be referred to as a ``locality pay point.'' When the special

salary rates authorized under the GS system exceed the locality pay

point, the top of the applicable band will be extended to the maximum

special salary rate authorized for that series and geographic location.

Placement within this special rate extension will be restricted to

employees in an occupation and location covered by that special rate.

An employee will be considered a special rate employee only if his/her

basic pay falls within the extension, i.e., the basic pay exceeds the

locality pay point. Consistent with the intent of locality pay, special

salary rate employees, as defined above, will not be eligible for

locality pay adjustments. When the locality pay point overtakes the

employee's rate of basic pay through general or locality pay increases,

the employee will no longer be considered a special salary rate

employee. In this instance, the employee's total adjusted basic pay

will be increased to the new locality pay point. The employee's new

adjusted salary will then be reallocated into a new basic pay and a

locality pay adjustment rate. Pay retention provisions and adverse

action procedures will not apply to the reallocation of the employee's

salary as the employee's total adjusted salary will remain the same.

h. Pay Administration. The following definitions and policies will

apply to the movement of employees within the Demonstration Project

from one career path or band level to another, or placement in a

Demonstration Project Career Path from the GS, FWS, or other personnel

systems:

ADVANCED IN-HIRE RATE: Upon initial appointment, the individual's

pay may be set anywhere within the band level consistent with the

special qualifications of the individual and the unique requirements of

the position. These special qualifications may be in the form of

education, training, experience, or any combination thereof that is

pertinent to the position in which the employee is being placed.

Geographic Movement Within the Demonstration Project: An employee

covered by broad banding who moves to a new duty station in a different

geographic area and continues to be an employee covered by the Warfare

Center Demonstration Project will have his/her pay in the new area

computed as explained below. In all cases, the geographic movement is

processed before any other simultaneous pay action (e.g., promotion,

reassignment, downgrade, change in series, etc.) effective on the same

day.

1. Regular Range Employees. An employee paid at a rate below the

locality pay point for his or her band level will receive no change in

his or her rate of basic pay upon geographic movement. The employee's

locality pay adjustment will be recomputed using the newly applicable

locality pay percentage, which may result in a higher or lower locality

pay adjustment and, thus, a higher or lower adjusted rate (locality

rate or special rate, as applicable). Exception: For employees who

would be eligible for a special rate under the GS system and who are in

the regular range of a band with a special rate extension, the new

adjusted salary following a geographic move may not be less than the

old adjusted salary multiplied by the factor derived by dividing the

new adjusted band maximum by the old adjusted band maximum.

2. Special Rate Extension Employees. For an employee being paid at

a rate in a special rate extension, the new adjusted salary following a

geographic move is equal to the old adjusted salary multiplied by the

factor derived by dividing the new adjusted band maximum by the old

adjusted band maximum; however the new adjusted rate may not be less

than the applicable locality pay point in the new area.

3. Pay Protection Provision. A special pay protection provision

applies to employees who (a) were entitled to a special rate

immediately before conversion into the Demonstration project, (b)

continue to meet the GS special rate eligibility conditions, and (c)

are paid at a rate that equals or exceeds the dollar amount of the pre-

conversion special rate. For these employees, the new adjusted rate

[[Page 64059]]

following a geographic move may not be less than the dollar amount of

the employee's pre-conversion special rate. Adverse action and pay

retention provisions of Title 5, United States Code, will not apply to

any reduction in basic pay due solely to the operation of the above

rules.

PROMOTION: Within the Demonstration Project Broad Banding system a

promotion will be defined as the movement of an employee from a lower

to a higher band level in the same career path, or from one career path

to another wherein the band in the new career path has a higher maximum

salary than the band from which the employee is moving.

After the implementation of the Demonstration Project, for an

employee moving from the GS, a promotion will be defined as placement

in a band level which incorporates a GS grade level which is higher

than the employee's current grade.

For an employee moving from the FWS, a promotion will be defined as

placement in the Demonstration Project in a band level where the

representative rate of the highest GS grade covered (i.e., step 04

adjusted rate of the highest GS grade) is higher than the

representative rate of the employee's current FWS grade (i.e., step

02).

Promotions will follow basic federal merit promotion policy that

provides for competitive and non-competitive promotions. Except for

promotions from the FWS to positions covered by the Demonstration

Project broad banding system, an employee will normally receive an

increase of six percent upon promotion unless a higher increase is

necessary to raise the employee's salary to the minimum salary of the

new band. The employee's total adjusted pay (basic pay and locality

pay; if any) will be used in determining the amount of the promotion

increase and in setting the employee's adjusted pay in the higher band.

Decisions not to increase pay or for increases of other than six

percent or to the minimum level of the band must be approved at the

Division level, unless otherwise delegated to lower levels. In no

situation may an employee's salary upon promotion be established lower

than the minimum salary range of the new band.

Factors to be used to help determine the amount of the increase may

include, but are not limited to, the employee's directly related

experience which may be of immediate use in the new position; the

employee's current pay; and the relationship to salaries of other

similarly qualified employees.

REASSIGNMENT: For movement within the Demonstration Project Broad

Banding system, a reassignment will be movement to a position covered

by the same band level, or from one career path to another when the

salary range of the new band level and the employee's current band

level remains the same.

For an employee moving from the GS, a reassignment will be defined

as placement in the Demonstration Project in a band level where the

highest GS grade covered is the same as the employee's current GS

grade.

For an employee moving from the FWS, a reassignment will be defined

as placement in the Demonstration Project in a band level where the

representative rate of the highest GS grade covered (i.e., step 04

adjusted rate of the highest GS grade included in that broad band) is

the same as the representative rate of the employee's current FWS

grade.

DEMOTION OR CHANGE TO LOWER BAND LEVEL: For movement within the

Demonstration Project Broad Banding system, a demotion will be defined

as the movement of an employee from a higher band to a lower band

within the same career path, or from one career path to another where

the band in the new career path has a lower maximum salary than the

band from which the employee is moving.

For an employee moving from the GS, a demotion will be defined as

placement in the Demonstration Project in a band level where the

highest GS grade covered is lower than the employee's current GS grade.

For employees moving from the FWS, a demotion will be defined as

placement in the Demonstration Project in a band level where the

representative rate of the highest GS grade covered (i.e., step 04

adjusted rate of the highest grade included in that pay band) is lower

than the representative rate of the employee's current FWS grade.

SALARY ADJUSTMENT: A salary adjustment is defined as an increase in

an employee's base pay (by other than the incentive pay process) within

the employee's current band level to an amount which does not exceed

the top of the band. The salary adjustment may be used to adjust the

pay of individuals who have acquired a level of education that would

otherwise make the employee qualified for an appointment at a higher

level and would be used in lieu of a new appointment. For example, this

authority may be used to adjust the pay of graduate level Cooperative

Education (COOP) students or employees who have obtained an advanced

degree, e.g., Ph.D.

OTHER: Current provisions for Highest Previous Rate, Pay Retention

(except as otherwise noted), Special Recruitment and Relocation

Bonuses, Retention Allowances and Accelerated Promotions will continue.

The use of OPM's Operating Manual for ``Qualification Standards For

General Schedule Positions'' will continue with minor modifications;

``Band'' will be substituted for ``Grade'' where appropriate and the

time in grade requirement will be eliminated.

2. Performance Development System

The philosophical base of this Demonstration Project is that

employees are valued and trusted and are the organization's most

critical assets. Accordingly, the primary objectives of the

Demonstration Project are to: develop employees to meet the changing

needs of the organization; to help employees achieve their career

goals; to improve performance in current positions; to retain high

performers, and to improve communication with customers, colleagues,

managers and employees. The system focuses on continuous performance

improvement and minimizes administrative requirements. On-going

dialogue between the employee and supervisor is fundamental to this

development focus, and Performance Development Resources are provided

as part of the system to facilitate this dialogue and assist with

diagnosis of performance issues. The emphasis on continued improvement

is carried over into the process for addressing performance problems.

The proposed system substitutes an early intervention which focuses

immediately on a formal performance plan designed to support the

employee's success. A determination of unacceptable performance is made

only if the employee does not meet the requirements for acceptable

performance detailed in that plan. The following paragraphs describe

the key components of the Performance Development System. Figure 4

depicts the relationship of these components and their linkage with the

Incentive Pay System.

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BILLING CODE 6325-01-C

a. Performance Development Resources (PDR). At the heart of the

performance development system is the concept of providing

organizational resources to support the development process. While the

design of these resources will be delegated to each Division, they will

typically consist of a pool of people, including union representatives,

who act as a support system to identify or help provide for the needs

of employees and managers in the development process. Current

limitations regarding union involvement in discussions concerning

assigning and directing employees will not prevent the parties within

the Demonstration Project from developing appropriate procedures for

the Performance Development Resources.

The PDR will be available to facilitate communications around

expectations and needs, and help supervisors and employees seek

agreement throughout all aspects of the performance development

process. Should performance problems arise, the PDR will be

particularly useful in diagnosing issues impacting performance (e.g.,

employee skills, attitudes and motivation, clarity of job expectations,

systemic issues, access to information and resources, relationships

with co-workers and supervisor, etc.) and identifying options for

addressing these issues (e.g., development opportunities, tools or

equipment to support improved performance, reassignment of the employee

to a position that better matches his/her capabilities and interests,

etc.) They will also make referrals to others who may be helpful, and

identify systemic or organization wide issues which may be affecting

performance.

Supervisors are expected to utilize the PDR for assistance in

preventing and alleviating performance problems. Employees may also use

the PDR to assist them in correcting self-identified performance

problems, in development planning to enhance their career opportunities

consistent with the needs of the organization, and to facilitate

communication and feedback with their supervisors, etc.

b. Two Level Rating System. The system employs a two level rating

system: ``acceptable'' and ``unacceptable'' performance. ``Acceptable''

performance is defined as ``performance that fulfills the requirements

for which the position exists.'' An employee's performance may not be

determined ``unacceptable'' unless the employee has been placed on and

failed a performance plan. Employee performance ratings will be

documented annually.

c. Establishing Performance Expectations. Clear, mutually

understood performance expectations that are linked to organizational

goals, strategies and values are fundamental to successful individual

and organizational performance. The outcome of this component of the

Performance Development System is clear communication of the products

and/or services to be delivered by the employee(s), and the success

criteria against which those outputs will be assessed. Documentation of

outputs and success criteria is expected when necessary to facilitate

mutual understanding of performance expectations.

The most effective means of creating a common understanding is

through a process in which the supervisor and employee(s) discuss

requirements and establish performance goals and expectations.

Employees and supervisors are expected to actively participate in these

discussions to seek clarity regarding expectations and identify

potential obstacles to meeting goals. In addition, employees should

explain (to the extent possible) what they need from their supervisor

to support goal accomplishment. The timing of these goal setting

discussions will vary based on the nature of work performed, but will

occur at least annually. More frequent, task specific, discussions of

expectations may be more appropriate in some organizations. In cases

where work is accomplished by a team, team discussions regarding goals

and expectations may be appropriate,

[[Page 64061]]

however expectations for individual contributions to the team goals

should always be clearly specified. Either the supervisor, the

employee, or the union may enlist the assistance of the Performance

Development Resources to facilitate effective dialogue with regard to

these issues.

Documentation of performance expectations is a helpful mechanism

for ensuring clarity of understanding and providing a focus for later

discussions on progress and developmental needs. As a minimum, formal

documentation of expectations is required when an employee begins a new

or substantially different job. Documentation in other situations is

based on the needs and desires of the employee and supervisor, and may

rely on other existing documentation (e.g., project plans, process

documentation, customer requirements, etc.) No prescribed format is

required for such documentation; the employee and supervisor are

encouraged to seek agreement on what form of documentation will meet

their needs and who will be responsible for producing it. The

assistance of the Performance Development Resources may be enlisted by

either party to support their efforts to reach agreement. In bargaining

units, documentation procedures will be subject to bargaining. Current

limitations regarding union involvement in decisions concerning

assigning and directing employees will not prevent the parties within

the Demonstration Project from developing appropriate procedures for

documenting performance discussions.

d. On-going Performance Dialogue. To facilitate performance

development, employees and supervisors will engage in on-going

dialogue. Ideally this dialogue will occur as part of normal day-to-day

interactions for the purpose of ensuring a common understanding of

expectations, reviewing whether expectations are being met, providing

support in identifying resources or solving problems, providing

coaching on complex or sensitive issues, providing information to

increase the understanding of the project context, and keeping the

supervisor informed of progress. In addition to this on-going

interaction, however, it is expected that periodically a more formal

dialogue will occur focused on reviewing progress, discussing customer

feedback, exploring process improvements that could remove obstacles to

effective performance, and identifying developmental needs to support

continual improvement and career growth. The employee and supervisor

should seek agreement on the frequency and form for both the formal and

informal dialogues to ensure they will meet their needs. Either the

supervisor, the employee or the union may call upon the Performance

Development Resources to facilitate communications or conflict

resolution around these issues. In cases where work is accomplished by

a team, team meetings may be an appropriate forum for some of this

interaction, however team discussions do not eliminate the need for the

supervisor to have some form of individual dialogue with each employee.

The expected outcomes from this on-going dialogue component are

plans to support the continuous improvement of individual and

organizational performance. Documentation of these discussions and

resulting plans is encouraged to the extent that it contributes to

clarity of understanding and facilitates later review of progress on

continuous improvement efforts. The nature and content of such

documentation is based on the needs and desires of the employee and

supervisor. No prescribed format is required for such documentation;

the employee and supervisor are encouraged to seek agreement on what

form of documentation will meet their needs and who will be responsible

for producing it. The assistance of the Performance Development

Resources may be enlisted by either party to support their efforts to

reach agreement.

In bargaining units, these procedures are subject to bargaining.

Current limitations regarding union involvement in decisions concerning

assigning and directing employees will not prevent the parties within

the Demonstration Project from developing appropriate procedures for

ongoing performance dialogues and for documenting performance

discussions.

e. Feedback from Multiple Sources. The primary purpose of feedback

in the Performance Development System is to provide employees with

information regarding how well their performance is meeting customer

requirements in order to help the employees continually improve their

performance. The outputs expected from this component are data and

customer feedback which enable review of performance against success

criteria. These data provide input to the review and continuous

performance improvement planning discussed as part of the on-going

dialogue component.

The responsibility for employee development and continuous

improvement is jointly held between the supervisor and employee. They

are expected to work together to identify internal and external

customers and to define and implement a process by which the employee

can regularly receive feedback. A variety of mechanisms may be

appropriate, such as customer surveys, process measures which track

customer requirements, an discussions with customers. Supervisors are

expected to facilitate this process and work with employees to

interpret the feedback and establish improvement goals. Performance

Development Resources may be helpful during this process. Their

assistance may be requested by the supervisor, the employee or the

union. Current limitations regarding union involvement in decisions

concerning assigning and directing employees will not prevent the

parties within the Demonstration Project from developing appropriate

mechanisms and procedures for obtaining feedback from multiple sources.

Managers and supervisors are also expected to obtain feedback from

their customers, including their employees, and to use that feedback as

a basis for establishing both personal and organizational performance

development goals. The use of an anonymous instrument is appropriate

for providing feedback to supervisors and managers on the impact of

their behavior. The use of these instruments will help focus attention

on desired leadership behaviors, structure the feedback in a

constructive manner, and offset the power imbalance that often prevents

supervisors from getting useful feedback from their employees. When

necessary, supervisors and managers may choose to use the Performance

Development Resources to help support their own developmental needs.

f. Performance Plan. When an employee has continued performance

difficulties, the organization will provide a formal Performance Plan

to support the supervisor and employee in resolving Performance Plan to

support the supervisor and employee in resolving the performance

problems. Use of the Performance Development Resources will be an

integral part of this effort. Supervisors are expected to call on the

Resources for assistance in preventing or alleviating performance

problems before the need for formal action arises. When there is an

indication that performance is not consistently meeting customer

requirements, supervisors are expected to call on the Resources to

analyze the causes of the difficulty and develop an approach for

resolving it. Development of a formal Performance Plan is indicated if

and when it is determined that the employee's performance (vs. system

performance) is a contributor to the problem informal intervention has

[[Page 64062]]

not been successful in correcting the problem. Use of the Performance

Development Resources is expected throughout the period of the

Performance Plan in an attempt to facilitate a solution to the problem.

The Performance Plan must be written, and will clearly document

organizational expectations for successful job performance, specify

accountability, identify developmental resources to correct any skill

deficiencies, define the time frame of the performance plan, specify

organizational support that will be provided and how performance

results will be monitored. In addition, the Plan will clearly specify

the potential consequences if performance is not acceptable. Periodic

discussions between the supervisor and employee must occur during the

time frame of the Performance Plan to review progress; these

discussions must be documented. Current limitations regarding union

involvement in decisions concerning assigning, directing, removing or

reducing in grade employees will not prevent the parties within the

Demonstration Project from developing appropriate procedures and

documentation in connection with Performance Plans. (NOTE: Nothing in

this subsection will preclude action under Title 5, United States Code,

Chapter 75, when appropriate.)

g. Accountability for Performance. An employee will be given a

rating of ``unacceptable'' only if and when the employee is unable to

successfully complete the Performance Plan. When an employee's

performance is rated as ``unacceptable,'' one of four actions will be

taken: (1) removal from the Federal Service, (2) placement in a lower

band level with a corresponding reduction in pay (demotion), (3)

reduction in pay while remaining in the same band level, or (4)

placement in a lower band level with no reduction in pay (demotion).

For the third category of action, the amount of reduction in pay

will be up to, but may not exceed, the maximum amount of incentive pay

(see below) that the employee could be eligible to receive during the

current payout period, i.e., up to the equivalent of 4 continuing pay

points as of the most recent payout cycle. Following the pay reduction,

the objection is to restore performance and may commensurate with it. A

formal Development Plan will be established to maximize the opportunity

for success in the assignment by clearly identifying performance

expectations and defining a plan to achieve them within an appropriate

time frame, not to exceed 12 months. The activity's Performance

Development Resources will be utilized throughout this process. If and

when performance improves during the period in which the employee is

otherwise ineligible for incentive pay, some or all of the reduced pay

may be restored. Such restoration is not retroactive and is separate

and apart from incentive pay.

For the fourth category of action, the employee may be moved to the

next lower band level provided no loss in pay results and the

employee's pay does not exceed the top of the lower bank level. Within

the Demonstration Project, this would not be considered an adverse

action and would not be appealable through a statutory appeals process

except for preference eligible employees. Employees will be provided

with a written notice of the decision and preference eligibles will be

notified of their right to appeal the action to the Merit Systems

Protection Board. Current limitations regarding union involvement in

decisions concerning reducing employees in grade will not prevent the

parties within the Demonstration Project from developing procedures for

the non-adverse reduction in band level. The decision to reduce an

employee to a lower band level with no reduction in pay will be subject

to review under existing grievance or alternative dispute resolution

procedures.

3. Incentive Pay System

The Incentive Pay System provides a mechanism for encouraging and

rewarding performance contributions and other outcomes resulting from

the continuous improvement focus of the performance development system.

INCENTIVE PAY FOR EMPLOYEES COVERED BY BROAD BANDING: Supervisors

will conduct an annual review of each employee's salary and decide how

total compensation should be adjusted to reflect the employee's

performance contribution to the organization. The adjustment may be

made as a continuing increase to base pay and/or as a one-time cash

bonus to adjust total compensation. The philosophical foundation for

incentive pay is described below:

Principles of Incentive Pay

Background: One of the outcomes of pay banding is an expanded

range of pay progression opportunities for employees. This is

accomplished through ``incentive pay.'' Incentive pay is awarded to

people based on the value of their performance contributions to the

organization. With this comes the necessity to insure that pay

decisions are consistent with the needs and values of the

organization. At the same time, they must be seen as fair and

equitable. While the Demonstration Project provides discretion for

Warfare Center Divisions to substantially define the criteria and

process for managing incentive pay, it is appropriate that there be

general Project-wide principles that provide a policy framework for

division decisions. The following are those principles.

PRINCIPLE: ``The organization succeeds through the collective

contributions of people in all occupations.''

The Warfare Centers perform critical missions for the Navy in

support of national defense. These missions require the collective

efforts of all their people. While certain positions and occupations

are highly visible, it is the whole organization as a team pulling

in the same direction and towards the same goals that enables the

Centers to excel. In that regard, no occupational groups are to be

effectively excluded from opportunities for incentive pay and other

forms of recognition. Rather, there is an expectation that incentive

pay generally will be distributed proportionally to the various

career paths. Further, all people who are making positive

performance contributions as demonstrated by acceptable performance

will share in incentive pay. Amounts and time intervals will be set

by Divisions/sites.

PRINCIPLE: ``Pay should be commensurate with value of

performance to the organization.''

In general, an individual's total pay (base pay, plus any

incentive pay) should be commensurate with the value of the

performance contributions to the organization. Contributions may be

based on past and/or potential performance consistent with criteria

defined by the Warfare Center Divisions. In that regard, there

should be relative pay equity between people whose contributions to

the organization are of equal value. Consistent with this principle,

as the value of a person's contribution increases, compensation

should likewise increase. It follows that as an individual's

compensation increases, there is a corresponding increase in

expected performance contributions.

Typically, when a person is hired, or promoted to a higher band

level, and pay is at or near the lower end of that band, there are

expected successive increases in pay toward the mid range of that

band. This pay growth is reflective of a learning curve upon

entering a new position, and the corresponding increasing value to

the organization. Pay progression through the mid range occurs with

progressively higher levels of performance contributions. Beyond

that, extraordinary contributions are expected for pay to increase

through the upper levels of the band.

a. Eligibility. All employees who are making positive performance

contributions as demonstrated by acceptable performance will share in

incentive pay with the amounts and time intervals set by the Divisions

and sites. Employees receiving an unacceptable rating since the last

incentive payout are ineligible for the next incentive pay

consideration.

b. Incentive Pay Pool. Payments under the Incentive Pay System are

made from the incentive pay pool. Within the incentive pay pool, there

are separate

[[Page 64063]]

funds for continuing pay increases and bonus payments. The incentive

pay pool is not used to fund promotions between pay bands. It is also

not used to fund general pay increases, special rate increases, or

locality pay increases; rather, employees will continue to receive any

such increases (as applicable under the Plan) consistent with other

employees outside the demonstration project.

The incentive pay pool will be operated within the parameters of

the overall finance system governing the Warfare Centers. As a Defense

Business Operating Fund (DBOF) activity, the Warfare Centers are 100

percent industrially funded and operate as ``not-for-profit''

competitors within the Department of Defense. Under DBOF, the Centers

are reimbursed for their work by their customers through billings based

on stabilized rates. The assistant Secretary of the Navy for Financial

Management and Comptroller oversees the establishment of these

stabilized rates through reviews of Biannual Financial Management

Budget submissions, which are highly visible at all Command levels.

This funding process imposes a discipline in controlling costs

(including salary expenditures for the Warfare Centers that is not

present under appropriated funded organizations.

The size of the continuing pay fund is based on appropriate

factors, including the following:

a. Historical spending for within-grade increases, quality step

increases, and in-level career promotions (with dynamic adjustments to

account for changes in law or in staffing factors e.g., average

starting salaries and the distribution of employees among job

categories and band levels);

b. Labor market conditions and the need to recruit and retain a

skilled workforce to meet the business needs of the organization; and

c. The fiscal condition of the organization.

Given the implications of base pay increases on long-term pay and

benefit costs, the amount of the continuing pay fund will be derived

after a cost analysis with documentation of the mission-driven

rationale for the amount. Any decision to substantially reduce the

amount of funds devoted to continuing pay increases would typically

occur only in lieu of more drastic cost cutting measures (e.g., RIF or

furlough). As part of the evaluation of the project, average salary

(base pay) will be tracked over time using two comparison groups: (1)

The original two Navy Demonstration labs in China Lake and San Diego,

and (2) a comparison group constructed using OPM's Central Personnel

Data File.

The size of the bonus pay fund will be based on appropriate

factors, including the following:

a. Historical spending for performance awards, special act awards,

and awards for beneficial suggestions;

b. The organization's fiscal condition and financial strategies;

and

c. Employee retention rates.

The decision process for defining the size of the incentive pay

pool and the two funds within that pool will be established at the

Division/site level. The design of the decision process, insofar as it

affects bargaining unit employees, will be subject to collective

bargaining.

d. Delegated Criteria Setting. The criteria and process for

incentive pay will be substantially defined at the Division/site level.

The incentive pay decision may be based on some combination of past,

present and future performance. Examples of criteria may include

criticality of skills, difficulty of position, criticality of position,

individual or team contributions, suggestions for improving system or

organization processes, length and/or quality of experience, current

total compensation, etc. The criteria and process for incentive pay

distribution for bargaining unit employees are subject to collective

bargaining. Current limitations regarding union involvement in

decisions concerning assigning and directing employees will not prevent

the parties from developing the criteria and process for incentive pay

decisions. (Note: The movement of an employee within a band based on

the execution of an incentive pay decision is not a ``classification''

action.)

e. Pay Points. The payout process will utilize a point system to

distribute incentive pay increases. A maximum of four (4) points will

be available, thus each employee performing in an acceptable manner

will be eligible to receive 0, 1, 2, 3 or 4 pay points in the form of

continuing pay, bonus pay or some combination.

FOR FWS EMPLOYEES, cash awards continue to be available under the

existing Incentive Awards system based on performance and special acts.

f. Communication and Documentation. It is important that employees

understand what is expected in order to receive a pay increase.

Supervisors will interpret organizational criteria for their employees

to clarify how it applies to their work and have periodic assessment

discussions with employees to prevent surprise decisions at the time of

payout. These assessment discussions should normally be held separately

from performance development dialogues. Supervisors and employees are

encouraged to seek agreement on their documentation needs. In addition,

supervisors are expected to document their payout recommendation

decisions and to discuss their decision rationale with employees. In

bargaining units, documentation procedures will be subject to

bargaining. Current limitations regarding union involvement in

decisions concerning assigning and directing employees will not prevent

the parties from developing documentation procedures for the

communication and documentation of incentive pay discussions and

decisions.

g. Reconsideration of Incentive Pay Decisions. Employees will have

the opportunity for a reconsideration of incentive pay decisions. While

the specific purpose of the reconsideration is to address employee

concerns about such decisions, the process is also intended to

facilitate communication and understanding between employees and

supervisors/managers concerning performance contributions and their

impact on pay decisions. In addition, the process seeks to identify

possible systemic problems that need to be addressed. In that regard,

reconsideration is considered a positive and integral component of an

effective incentive pay system by providing a mechanism to support

continuous improvement. Accordingly, employees will not be discouraged

from requesting reconsideration. Neither will they be subjected to

reprisal or stigma. The specific process for reconsideration will be

defined at the Division/site level. Current limitations regarding union

involvement in decisions concerning assigning and directing employees

will not prevent the parties from developing procedures for the

reconsideration of incentive pay decisions. That process will include,

but will not necessarily be limited to, the following characteristics:

It should be administratively streamlined; provide expedited

resolution; maintain appropriate confidentiality; be fair and

impartial; address assertions of harmful error involving issues of

process and procedure; and ensure that management payout decisions

reflect reasonableness in judgment in evaluating applicable criteria.

h. Guidance on Managing Incentive Pay. Each Division is expected to

develop policies and criteria to guide the implementation of the

incentive pay system which are consistent with their mission,

strategies and organizational values, and supportive of the Naval Sea

[[Page 64064]]

Systems Command and Warfare Center strategic plans. Some Divisions may

rely on individual management judgment based on general guidance, while

other Divisions may define a more mechanical process based on highly

objective criteria. Additional guidance may be provided by major

organizational components (e.g., departments or directorates) to tailor

or interpret the command-level criteria for their specific mission and

strategies. Each major organizational component will have authority to

manage the incentive pay allocation derived from the salaries of

employees in that component. Departments/Directorates may further

delegate authority to mange a prorated portion of the fund to the next

lower echelon. Supervisors and managers within the unit will be

assessing the nature of each employee's contribution, consistent with

the organization's policy and criteria as reflected in the written

guidance. They will then make recommendations to a second level

reviewer regarding the number of pay points to be awarded to each

employee (i.e., 0 to 4 points) and the nature of incentive pay (i.e.,

continuing pay and/or bonus pay). Decisions regarding approval/

disapproval of recommendations will be made at the organizational level

to which authority has been delegated to manage the pay pool; typically

this will be the second or third level reviewer. In cases where work is

accomplished by a team, the team members may be involved in formulating

the recommendation for distribution of incentive pay.

4. Reduction-In-Force (RIF)

Flexible and responsive alternatives are needed to restructure an

organization in a short period of time. The current RIF system is

complicated, costly, and relatively unresponsive to the needs of the

organization.

The proposed RIF system will have a single round of competition to

replace the current ``two round'' process. Once the position to be

abolished has been identified, the incumbent of that position may

``displace'' another employee when the incumbent has a higher retention

standing and is fully qualified for the position occupied by the

employee with a lower standing. Retention standing is based on tenure,

veterans' preference, length of service, and performance. However,

there will be no augmented service credit based on performance ratings.

An employee rated as unacceptable during the 12 month period preceding

the effective date of a RIF may only displace an employee rated

unacceptable during that same period. The same ``undue disruption''

standard currently utilized will serve as the criteria to determine if

an employee is fully qualified. The displaced individual may similarly

displace other employees. If/when there is no position in which an

employee can be placed by this process or assigned to a vacant

position, that employee will be separated.

Displacement is limited to one broad band level below the

employee's present level. A preference eligible employee with a

compensable service connected disability of 30 percent or mre may

displace up to two broad band levels (or the equivalent of five General

Schedule grades) below the employee's present level. Employees not

covered by broad banding (FWS), may ``displace'' up to three grades/

intervals (five grades/intervals for preference eligibles with a

service connected disability of 30 percent or more).

The new system will eliminate retained grade but will preserve

retained pay.

All positions included in the Demonstration Project within an

activity at a specific geographic location will be considered a

separate competitive area.

5. Competitive Examining and Distinguished Scholastic Appointments

The Warfare Center needs a process which will allow for the rapid

filling of vacancies, is less labor intensive, and is responsive to our

needs. Restructuring the examining process and providing an authority

to appoint candidates meeting distinguished scholastic achievements

will help achieve these goals. When a Division implements the

Demonstration Project for some portion of their workforce, this

component may be available for all occupations. This will eliminate the

imposition of multiple examining and appointment systems on the public

and will strengthen efficiencies gained under the Demonstration

Project. To further minimize resource requirements and the complexities

inherent in administering two different sets of examining and hiring

processes, this component may also be applied to GS and FWS positions

in activities for which the Warfare Center Divisions provide human

resource services.

a. Delegated Examining Authority. The Warfare Centers propose to

demonstrate a streamlined examining process for both permanent and non-

permanent positions. This authority will be further delegated to the

Division level. This authority will apply to all positions with

exception of positions in the Senior Executive Service, to Senior Level

(ST/SL) positions, to the Executive Assignment System or positions of

Administrative Law Judge. This authority will include the coordination

of recruitment and public notices, the administration of the examining

process, the administration of veterans' preference, the certification

of candidates, and selection and appointment consistent with merit

principles.

b. Description of Examining Process: The primary change in the

examining process to be demonstrated is the grouping of eligible

candidates into three Quality Groups using numerical scores and the

elimination of consideration according to the ``rule of three''.

For each candidate, minimum qualifications will be determined using

OPM's Operating Manual for ``Qualification Standards For General

Schedule Positions''/``Job Qualification Systems For Trades and Labor

Occupations (Handbook X-118C)'' including any selective placement

factors identified for the position. Candidates who meet basic

(minimum) qualifications will be further evaluated based on knowledge,

skills and abilities which are directly linked to the position(s) to be

filled. Based on this assessment, candidates will receive a numerical

score of 70, 80, or 90. No intermediate scores will be granted except

for those eligibles who are entitled to veterans' preference.

Preference eligibles meeting basic (minimum) qualifications will

receive an additional 5 or 10 points (depending on their preference

eligibility) which is added to the minimum scores identified above.

Candidates will be placed in one of three quality groups based on their

numerical score, including any veterans' preference points: Basically

Qualified (score of 70 and above), Highly Qualified (score of 80 and

above), or Superior (score of 90 and above). The names of preference

eligibles shall be entered ahead of others having the same numerical

rating.

For scientific/engineering and professional positions at the

equivalent of GS-9 and above, candidates will be referred by quality

groups in the order of the numerical ratings, including any veterans'

preference points. For all other positions, i.e., other than

scientific/engineering and professional positions at the equivalent of

GS-9 and above, preference eligibles with a compensable service-

connected disability of 10 percent or more who meet basic (minimum)

eligibility will be listed at the top of the highest group certified.

In selecting the top candidate, selecting officials should be

provided with a reasonable number of qualified candidates from which to

choose. All

[[Page 64065]]

candidates in the highest group will be certified. If there is an

insufficient number of candidates in the highest group, candidates in

the next lower group may be certified in rank order. When two or more

groups are certified, candidates will be identified by quality group

(i.e., Superior, Highly Qualified, Basically Qualified) in the order of

their numerical scores. In making selections, to pass over any

preference eligible(s) to select a nonpreference eligible requires

approval under current pass over or objection procedures.

c. Distinguished Scholastic Achievement Appointment: The Warfare

Centers further propose to establish a Distinguished Scholastic

Achievement Appointment using an alternative examining process which

provides the authority to appoint undergraduates and graduates through

the doctoral level to professional positions at the equivalent of GS-7

through GS-11, and GS-12 positions involved in research.

At the undergraduate level, candidates may be appointed to

positions at a pay level no greater than the equivalent of GS-7 step 10

provided they meet the minimum standards for the position as published

in OPM's operating manual, Qualification Standards for General Schedule

Positions, plus any selective factors stated in the vacancy

announcement; the occupation has a positive education requirement; and,

the candidate has a cumulative grade point average of 3.5 or better (on

a 4.0 scale) in those courses in those fields of study that are

specified in the Qualifications Standards for the occupational series.

Appointments may also be made at the equivalent of GS-9 through GS-12

on the basis of graduate education and/or experience for those

candidates with a grade point average of 3.5 or better (on a 4.0 scale)

for graduate level courses in the field of study required for the

occupation.

Veterans' preference procedures will apply when selecting

candidates under this authority. Preference eligibles who meet the

above criteria will be considered ahead of nonpreference eligibles. In

making selections, to pass over any preference eligible(s) to select a

nonpreference eligible requires approval under current objection

procedures. Priority must also be given to displaced employees as may

be specified in OPM and Department of Defense regulations.

Distinguished Scholastic Achievement Appointments will enable the

Warfare Centers to respond quickly to hiring needs with eminently

qualified candidates possessing distinguished scholastic achievements.

C. Project Implementation

While many of the basic elements of each component of the project

will be implemented uniformly at all sites through policies established

at the Warfare Center level, a number of policies, procedures, or

processes will be delegated to the Division and/or site levels. This

permits the system to be operationally defined, within a Warfare Center

directed framework, to fit the culture and needs of the local

organizations. In bargaining units, the project will be implemented

only after there is full agreement through the collective bargaining

process.

D. Entry Into/Exit From the Project

1. Initial Conversion of Current Workforce

For the most part, current GS/GM employees will be converted

automatically from their current grades to the appropriate career paths

and band levels. However, the Warfare Centers consider it essential to

the success of the project that employees, upon entering the project,

feel that they are not losing a pay entitlement accrued under the GS

system. Accordingly, the current employees of the Warfare Centers will

be ``made whole'' through a one year ``buy-in'' period. On the day of

conversion, employees typically will receive base pay increases for

prorated step increase equivalents. Employees at the 10th step or

receiving a retained rate are not eligible for the increase. Further,

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 band, 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.

Additionally, in many cases, employees who are today covered by a

local or national special salary rate will no longer be considered a

special rate employee under the Demonstration Project and will thus

gain eligibility for full locality pay. To control conversion costs and

to avoid a salary increase windfall for these employees, 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 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.

2. New and Transfer Employees

New hires, including employees transferring from other Federal

activities, will be converted into the Demonstration Project in the

career path and at the level and pay consistent with the duties and

responsibilities of the position and individual qualifications.

3. Exit From the Demonstration Project

Employees who leave the Demonstration Project broad banding system

to accept federal employment in the traditional Civil Service system

will have their pay set by the gaining activity. To assist activities

in setting pay and in determining whether such placement constitutes a

promotion, reassignment, or change to lower grade, the employee's band

and salary level will be converted to a General Schedule equivalent

grade prior to leaving the Demonstration Project in the following

manner:

Employees who exit the Demonstration Project will be tentatively

converted to a GS grade most comparable to the employee's current

Demonstration Project level and salary. In instances where the current

salary is in the area between two overlapping GS grades within the same

level, the converted grade is either (1) the higher of the two

overlapping GS grades if the current salary meets or exceeds Step 4 of

the higher GS grade, or (2) the lower of the overlapping grades if the

current salary is less than Step 4 of the higher GS grade. In those

instances where the current salary falls below the established GS

salary range for the lowest GS grade covered by the Demonstration

Project band level, the converted grade is the lowest GS grade level in

that band. In those situations where an employee has not been promoted

or placed in a lower pay band while covered by the Demonstration

Project, the employee will be converted at a level which is no lower

than the GS grade held immediately prior to entering the Demo project.

This converted GS grade is the GS equivalent grade and is not

necessarily the grade the employee will have upon transfer or

reassignment outside the Demonstration Project. If the employee is

receiving a retained rate under the Demonstration Project, the

employee's GS-equivalent grade is the highest grade encompassed in his

or her bank level. The Warfare Center will coordinate with OPM to

describe a procedure for determining the GS-equivalency pay rate for an

employee retaining a rate under the Demonstration Project.

[[Page 64066]]

An employee's pay within the converted GS grade is set by

converting the Demonstration project adjusted rate of pay to a rate on

the highest applicable adjusted rate range for the converted GS grade

(including locality rates and special rates, as applicable). For

example, if the highest applicable adjusted rate range under the GS pay

system for a particular employee is a special rate range, the adjusted

project rate (locality rate or special rate) is converted to the lowest

special rate in that range that equals or exceeds the project rate;

from this converted special rate, the employee's unadjusted GS rate and

locality rate would be derived. This pay conversion is done before

processing any geographic movement or other pay-related action

coinciding with the employee's conversion out of the Demonstration

project.

When an employee transfers to another activity, the employee's

rating of record will be transferred. When the gaining activity uses

other than a two level performance system, the employee may be provided

a supplementary performance assessment using the gaining organizations

appraisal criteria. If the employee requests such an appraisal, the

employee will be responsible for providing the criteria to the

supervisor for completion. Gaining organizations are not bound to use

this supplementary performance appraisal in any formal actions.

Service under the Demonstration Project is creditable for within-

grade increase purposes upon conversion back to the GS system.

Incentive 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).

E. Project Duration

The initial implementation period for the Project will be five

years. At that time, the entire Demonstration project will be

reexamined to determine whether to continue, modify or terminate the

Project.

IV. 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 contact 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.

V. Waivers of Law and Regulation

A. Waivers to Title 5, United States Code

Chapter 33, Section 3317(a): Competitive service, certification

from register (in so far as ``rule of three'' is eliminated under the

Demonstration project).

Chapter 33, Section 3318(a): In so far as ``rule of three'' is

eliminated under the Demonstration Project. Veterans preference

provisions remain unchanged.

Chapter 43, Section 4301: Definitions.

Chapter 43, Section 4302: Establishment of performance appraisal

systems.

Chapter 43, Section 4303: 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 or reduced in band level

without a reduction in pay based on unacceptable performance. For

employees who are reduced in band level without a reduction in pay,

Sections 4303(b) and 4303(e) (2) and (3) do not apply.

Chapter 43, Section 4303(b)(1)(A)(ii): Requirement for critical

elements.

Chapter 51, Section 5101-5111: Purpose, definitions, basis,

classification of positions, review, authority--To the extent that

white collar employees will be covered by broad banding. Pay category

determination criteria for Federal Wage System positions remain

unchanged.

Chapter 53, Section 5303; 5302 (1), (8), and (9); Section 5303; and

Section 5304: Pay Comparability System. (To the extent necessary to

allow Demonstration project employees covered by broad banding 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

basic pay.) (This waiver does not apply to Federal Wage System (FWS)

employees. This waiver does not apply to SL/ST employees who

[[Page 64067]]

continue to be covered by these provisions, as appropriate.)

Section 404 of the Federal Employees Pay Comparability Act of 1990

(P.L. 101-509): Special Pay Adjustments for Law Enforcement Officers in

Selected Cities. (To the extent necessary to allow law enforcement

officers under the Demonstration project to be treated as law

enforcement officers under the General Schedule.)

Chapter 53, Section 5305: Special Pay Authority.

Chapter 53, Section 5331-5336: General Schedule Pay Rates.

Chapter 53, Section 5362: Grade Retention.

Chapter 53, Section 5363: Pay Retention. (Only to the extent

necessary to (1) replace ``grade'' with ``band level''; (2) allow

Demonstration Project employees to be treated as General Schedule

employees; (3) provide that pay retention does not apply to conversions

from General Schedule special rates to Demonstration project pay and

reallocations of Demonstration project pay rates within special rate

extensions to locality adjusted pay rates due to promotions or general

or locality pay increases, as long as the employee's total rate of pay

is not reduced; and (4) provide that pay retention does not apply to

reductions in basic pay due solely to the operation of the pay setting

rules for geographic movement within the Demonstration Project.) (This

waiver does not apply to FWS employees who continue to be covered by

these provisions, as appropriate. This waiver does not apply to SL/ST

employees unless they move to a GS equivalent position under conditions

that trigger entitlement to pay retention.)

Chapter 53, Section 5371: Health Care Positions. (Only to the

extent necessary to allow Demonstration project employees to hold

positions subject to chapter 51 of title 5. (This waiver does not apply

to FWS employees.)

Chapter 55, Section 5545(d): Hazardous Duty Differential. (Only to

the extent necessary to allow Demonstration project employees covered

by broad banding to be treated as General Schedule employees.) (This

waiver does not apply to FWS and SL/ST employees.)

Cgapter 57, Sections 5753, 5754, and 5755: Recruitment; Relocation

Bonuses; Retention Allowances; Supervisory Differentials: (Only to the

extent necessary to allow employees and positions under the

Demonstration project covered by broad banding to be treated as

employees and positions under the General Schedule.) (This waiver does

not apply to FWS employees. This waiver does not apply to SL/ST

employees who continue to be covered by these provisions, as

appropriate.)

Chapter 59, Section 5941: Allowances based on living costs and

conditions of environment; employees stationed outside continental

United States or Alaska (Only to the extent necessary to provide that

COLA's paid to employees under the Demonstration project are paid in

accordance with regulations prescribed by the President (as delegated

to OPM).

Chapter 71, Section 7106(a)(2): In so far as provision on assigning

and directing, documenting performance discussions, Performance

Development Resources, Performance Plans, criteria and process for

incentive pay, and communication and documentation requirements for

incentive pay and reconsideration of incentive pay decisions; and, in

so far as provision on reducing employees in grade may prevent the

parties from negotiating procedures for non-adverse assignment of

employees to a lower pay band.

Chapter 71, Section 7119(b)(1): In so far as provision for either

party to request impasse proceedings would be contrary to provisions of

the Demonstration project.

Chapter 75, Section 7512(3); To the extent necessary to (1) replace

``grade'' with ``band level''; and, (2) exclude reductions in band

level not accompanied by a reduction in pay taken under Chapter 43.

Chapter 75, Section 7512(4): Adverse Action. (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 and reallocations of Demonstration project pay rates within

special rate extensions to locality adjusted pay rates due to

promotions of general or locality pay increases, as long as the

employee's total rate of pay is not reduced; and (2) reductions in

basic pay due solely to the operations of the pay setting rules for

geographic movement within the Demonstration project.)

B. Waivers to Title 5, Code of Federal Regulations

Part 300, Sections 300.601 through .605: Time in grade restrictions

are eliminated in the Demonstration project.

Part 332, Section 332.401(b): Only to the extent that for non-

professional or non-scientific positions equivalent to GS-9 and above,

preference eligibles with a compensable service-connected disability of

10 percent or more who meet basic (minimum) qualification requirements

will be entered at the top of the highest group certified without the

need for further assessment.

Part 332, Section 332.402: ``Rule of three'' will not be used in

the Demonstration project.

Part 332, Section 332.404: Order of selection is not limited to

highest three eligibles.

Part 351, Section 351.402(b): Competitive area to the extent that

the Demonstration project will be a separate competitive area within

the activity.

Part 351, Sections 351.403 (a) and (b): Competitive levels to the

extent that there is no requirement for the establishment of

competitive levels in the Demonstration project.

Part 351, Section 351.404 (a) and (b): Retention register to the

extent that the requirement to establish separate retention registers

by competitive level is eliminated.

Part 351, Section 351.501(a)(3): For order of retention, delete

``as augmented by credit for performance'' under Section 351.504.

Part 351, Section 351.504: Credit for performance to the extent

that the Demonstration project eliminates service credit for

performance.

Part 351, Section 351.601 through .608: References to competitive

levels are eliminated.

Part 351, Section 351.701 (b) and (c) Assignment rights (bump and

retreat): To the extent that the distinction between bump and retreat

is eliminated and the placement of ``white collar'' Demonstration

Project employees is restricted to no more than one broad band level

below the employee's current level, except that for a preference

eligible with a compensable service connected disability of 30 percent

or more, the limit is two broad band levels (or the equivalent of five

General Schedule grades) below the employee's present level.

Part 430, Subpart B: Performance appraisal for General Schedule,

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

referenced 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, except that such sections continue to apply to preference

eligible employees.

[[Page 64068]]

Part 432, Section 432.104 and .105: Proposing and Taking Action

Based on Unacceptable Performance: In so far as references to

``critical elements'' are deleted and adding that the employee may be

``reduced in grade or pay or removed'' if performance does not improve

to acceptable levels after a reasonable opportunity. In addition,

requirements waived to the extent that a reduction in band level is

taken based on skill utilization criteria when there is no reduction in

pay.

Part 511, Section 511.201: Coverage of and exclusions from the

General Schedule (To the extent that White Collar positions are covered

by broad banding. Pay category determination criteria for Federal Wage

System positions remain unchanged)

Part 511, Section 511.601: Classification appeals--modified to the

extent that white collar positions established under this demonstration

project, although specifically excluded from Title 5, are covered by

the classification appeal process outlined in this section, as amended

below.

Part 511, Section 511.603(a): Right to appeal--substitute ``band''

for grade.

Part 511, Section 511.607(b): Non Appealable Issues--add to the

list of issues which are neither appealable nor reviewable, ``the

assignment of series under this demonstration project to appropriate

career paths.''

Part 530, Subpart C: Special Salary Rates.

Part 531, Subparts B, D, and E: Determining The Rate of Basic Pay,

Within-Grade Increases, and Quality Step Increases. (Except that the

provisions relating to highest previous rate under Parts 531.202 and

531.203 are waived only to the extent necessary to work in a broad

banding system.)

Part 531, Subpart C and F: Special Pay Adjustments for Law

Enforcement Officers and Locality-Based Comparability Payments. (Only

to the extent necessary to allow Demonstration Project employees

covered by broad banding to be treated as General Schedule employees

and to allow basic rates of pay under the Demonstration project to be

treated as scheduled annual rates of pay.) (This waiver does not apply

to FWS employees. This waiver does not apply to SL/ST employees who

continue to be covered by these provisions, as appropriate.)

Part 536: All provisions pertaining to grade retention.

Part 536, Section 536.104: Pay Retention. (Only to the extent

necessary to (1) Replace ``grade'' with ``band level''; (2) allow

Demonstration Project employees to be treated as General Schedule

employees; (3) provide that pay retention does not apply to--

conversions from General Schedule special rates to Demonstration

project pay and reallocations of Demonstration project pay rates within

special rate extensions to locality adjusted pay rates due to

promotions or general or locality pay increases, as long as the

employee's total rate of pay is not reduced; and (4) provide that pay

retention does not apply to reductions in basic pay due solely to the

operation of the pay setting rules for geographic movement within the

Demonstration Project.) (This waiver does not apply to FWS employees

who continue to be covered by these provisions, as appropriate. This

waiver does not apply to SL/ST employees unless they move to a GS

equivalent position under conditions that trigger entitlement to pay

retention.)

Part 550, Section 550.703: Severance Pay. (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.'').

(This waiver does not apply to FWS employees.)

Part 550, Section 550.902, definition of ``employee'': Hazardous

Duty Pay. (Only to the extent necessary to treat Demonstration project

employees covered by broad banding as General Schedule employees.)

(This waiver does not apply to FWS and SL/ST employees.)

Part 575, Subparts A, B, C, and D: Recruitment Bonuses, Relocation

Bonuses, Retention Allowances, and Supervisory Differentials. (Only to

the extent necessary to allow employees and positions under the

Demonstration project covered by broad banding to be treated as

employees and positions under the General Schedule.) (This waiver does

not apply to FWS employees. This waiver does not apply to SL/ST

employees who continue to be covered by these provisions, as

appropriate.)

Part 591, Subpart B: Cost-of-Living Allowances and Post

Differential-Nonforeign Areas. (To the extent necessary to allow

Demonstration project employees covered by broad banding to be treated

as employees under the General Schedule.) (This waiver does not apply

to FWS employees. This waiver does not apply to SL/ST employees who

continue to be covered by these provisions, as appropriate.)

Part 752: Section 752.401(a)(3): To the extent necessary to (1)

Replace ``grade'' with ``band level''; and (2) exclude reductions in

band level not accompanied by a reduction in pay taken under Chapter

43.

Part 752: Section 752.401(a)(4): Adverse Action. (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 and reallocations of Demonstration project

pay rates within special rate extensions to locality adjusted pay rates

due to promotions or general or locality pay increases, as long as the

employee's total rate of pay is not reduced; and (2) reductions in

basic pay due solely to the operation of the pay setting rules for

geographic movement within the Demonstration Project.

VI. Cost

The goal of this Demonstration Project is the implementation of a

system in which payroll costs and resource utilization can be

controlled consistent with the organization's larger fiscal strategies.

This is especially critical in our industrially funded (DBOF)

environment. The continued economic viability of the DBOF activities

depends in large measure on controlling expenditures and remaining cost

competitive with other organizations. This Demonstration Project

proposes a system of pay incentives and processes that are flexible and

can operate in harmony with the organization's operational needs and

the financial needs of the larger organization. The costs of project

implementation will be borne by the Divisions/sites.

Costs associated with the development of the Demonstration Project

include software automation, training and project evaluation. All

funding will be provided through the Warfare Centers budget. Training

costs will be approximately $192K per thousand employees. The timing of

the expenditure will be site specific and dependent upon the

implementation schedules. Because automation requirements will be

minimized as a result of system similarities to existing Navy

Demonstration Projects, costs are estimated at $100K for the first two

years of project implementation. Evaluation costs are estimated at

approximately $60K per year.

VII. Project Oversight and Management

Project oversight and management will be carried out by the Warfare

Centers' Executive Group, composed of the Commanders and Technical

Directors of the two Warfare Centers. They will be assisted by the

Demonstration Project Management Office and the Steering Committee.

(See Figure 5)

The Steering Committee, chaired by a senior executive or senior

Navy officer

[[Page 64069]]

appointed by the Executive Group, is comprised of a senior member of

each Division of the Warfare Centers, and a member from the American

Federation of Government Employees, Metal Trades Council, International

Association of Machinists, National Association of Government

Employees, National Federation of Federal Employees, and Fraternal

Order of Police. This group serves as an advisory body to the Executive

Group which makes final decisions on the Demonstration Project proposal

and implementation. The role of the Steering Committee is to aggregate

and analyze incoming data from formal and informal evaluations and make

recommendations. It may also include facilitating information sharing,

mediating impasses, and promotion of partnership roles.

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Appendix A--Employee/Union Involvement Methodology

From the inception of the Naval Sea Systems Command Warfare

Centers' Personnel Demonstration Project, employee involvement in

crafting the Project Proposal was viewed as essential to producing a

plan that considered the needs of all parties. National union

representatives participated as members of the steering Committee which

developed the Personnel Demonstration Project Proposal and will be

overseeing its implementation. While the process that produced the

Project Proposal was a collaborative one, union participation did not

necessarily constitute full and complete endorsement of all details of

the Proposal.

At the Warfare Centers' various Divisions and sites, employees and

unions are involved through a variety of communications strategies.

Within the Divisions, communications teams composed of a cross section

of the workforce have been formed for the purpose of disseminating

information about the project as well as a focal point for employee

questions. Further, Divisions are establishing groups or committees to

help guide the implementation of the Project throughout the

organization. This model of broad participation is envisioned to

continue throughout the life of the Demonstration Project.

Unions Represented

Dahlgren, VA: American Federation of Government Employees

White Oak, MD: American Federation of Government Employees; Metal

Trades Council

Panama City, FL: National Federation of Federal Employees

Crane, IN: American Federation of Government Employees; Fraternal Order

of Police

Louisville, KY: International Association of Machinists & Aerospace

Workers

Carderock, MD: Metal Trades Council; Federal Firefighters Association

Pattern Maker Association

Annapolis, MD: National Federation of Federal Employees

Philadelphia, PA: Metal Trades Council; Fraternal Order of Police,

International Association of Firefighters

Ft. Lauderdale, FL: American Federation of Government Employees

[[Page 64070]]

Port Hueneme, CA: National Association of Government Employees; Federal

Union of Scientists and Engineers

Indian Head, MD: American Federation of Government Employees;

International Association of Firefighters; International Association of

Machinists and Aerospace Workers

McAlester, OK: American Federation of Government Employees

Keyport, WA: Metal Trades Council

Newport, RI: National Association of Government Employees; Federal

Union of Scientists and Engineers

New London, CT: National Association of Government Employees

Appendix B--Project Evaluation and Oversight

Intervention Impact Model--DOD Lab Demonstration Program

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

Intervention and expected effects Measures Data sources

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

1. COMPENSATION

a. Broad banding:

Increased organizational Perceived flexibility........... Attitude survey.

flexibility.

Reduced administrative workload, Actual perceived time savings... Personnel office data, PME results,

paperwork reduction. attitude survey.

Advanced in-hire rates.......... Starting salaries of banded v. Workforce data.

non-banded employees.

Slower pay progression at entry Progression of new hires over Workforce data.

levels--increased pay potential. time by band, career path--mean

salaries by band, career path,

demographics.

Increased satisfaction with Employee perceptions of Attitude survey.

advancement. advancement.

Increased pay satisfaction...... Pay satisfaction, internal/ Attitude survey.

external equity.

Improved recruitment............ Offer/acceptance ratios......... Personnel office data.

Percent declinations............

No change in high grade (GS-14) Number/percentage of high grade Workforce data.

distribution. salaries pre/post banding.

b. Conversion buy-in: Employee Employee perceptions of equity, Attitude survey.

acceptance. fairness.

Cost as a percent of payroll.... Workforce data.

2. PERFORMANCE MANAGEMENT

a. Cash awards/bonuses:

Reward/motivate performance..... Perceived motivational power.... Attitude survey.

To support fair and appropriate Amount and number of awards by Workforce data.

distribution of awards. career path, demographics.

Perceived fairness of awards.... Attitude survey.

Satisfaction with monetary Attitude survey.

awards.

b. Performance/contribution based

pay progresson:

Increased pay-performance link.. Perceived pay-performance link.. Attitude survey.

Perceived fairness of ratings Attitude survey.

Improved performance feedback... Satisfaction with ratings....... Attitude survey.

Employee trust in supervisors... Attitude survey

Adequacy of performance feedback Attitude survey.

Decreased turnover of high Turnover by performance rating Workforce data.

performers. category.

Increased turnover of low

performers:

Differential pay progression Pay progression by performance Workforce data.

of high/low performers. rating category, career path.

Alignment of organizational Linkage of performance Performance expectations, strategic

and individual performance expectations to strategic plans/ plans.

expectations and results. goals. Attitude survey/focus groups.

Performance expectations

Perceived involvement

Increased employee Performance management Attitude survey/focus groups.

involvement in performance procedures. Personnel regulations.

planning and assessment.

c. New appraisal process:

Reduced administrative burden... Employee and supervisor Attitude survey.

perception of revised

procedures.

Improved communication.......... Perceived fairness of process... Focus group.

d. Performance development:

Better communication of Feedback and coaching procedures Focus groups.

performance expectations. used. Personnel office data.

Time, funds spent on training by

demographics

Improved satisfaction and Organizational commitment....... Training records.

quality of workforce. Perceived workforce quality Attitude surveys.

Attitude survey.

3. ``WHITE COLLAR'' CLASSIFICATION

a. Improved classification systems

with generic standards:

Reduction in amount of time and Time savings.................... Personnel office data.

paperwork spent on Reduction of paperwork/number of

classification. personnel actions

(classification/promotion)

Ease of use..................... Managers' perceptions of time Attitude survey.

savings, ease of use, improved

ability to recruit.

Improved recruitment of employee Perceived quality of recruits... Focus groups/interviews.

with appropriate skills. GPA's of new hires, education Personnel office date.

levels

[[Page 64071]]

b. Classification authority

delegated to managers:

Increased supervisory authority/ Perceived authority............. Attitude survey.

accountability.

Decreased conflict between Number of classification Personnel records.

management and personnel staff. disputes/appeals pre/post.

Management satisfaction with Attitude survey.

service provided by personnel

office.

No negative impact on internal Internal pay equity............. Attitude survey.

pay equity.

c. Dual career ladder:

Increased flexibility to assign Assignment flexibility.......... Focus groups, surveys.

employees. Sup/non-sup ratios.............. Workforce data.

Improved internal mobility...... Perceived internal mobility..... Attitude survey.

Increased pay equity............ Perceived pay equity............ Attitude survey.

Flatter organization............ Supervisory/non-supervisory Workforce data.

ratios.

Improved quality of supervisory Employee perceptions of quality Attitude survey.

staff. of supervisors.

4. STAFFING/RECRUITMENT

Competitive examining and

categorical grouping:

Improved hiring process......... Management satisfaction with Attitude survey.

hiring process, time to hire,

perceived quality of new hires.

Increased quality of hires...... GPA's of new hires, education Personnel office data (from issue of

levels. Form 52 to referral of candidates).

Increased timeliness............ Time to fill positions.......... Attitude survey.

No negative impact on fairness Candidate/employee satisfaction.

of process, openness to

competition.

5. RIF

Modified RIF:

Prevent loss of high performing Separated employees by Workforce data.

employees with needed skills. demographics, performance. Attitude survey/focus groups.

Contain cost and disruption..... Satisfaction with RIF process... Attitude survey/focus groups.

Cost comparisons of traditional Rightsizing and documenting systems/

v. modified RIF. personnel office/budget data.

Time to conduct RIF

Number of appeals/reinstatements

6. COMBINATION OF ALL INTERVENTIONS

All:

Improved organizational Combination of personnel All data sources.

effectiveness. measures.

Improved management of R&D Employee/Management satisfaction Attitude survey.

workforce.

Improved planning............... Planning procedures............. Strategic planning documents.

Improved cross functional Perceived effectiveness of Attitude survey.

coordination. planning procedures. Organizational charts.

Actual/perceived coordination... Attitude survey.

Increased product success....... Customer satisfaction........... Customer satisfaction surveys.

Cost of innovation.............. Project training/development Demo project office records.

costs (staff salaries, contract Contract documents.

cost).

Training hours per employee)

7. CONTEXT

a. Regionalization:

Reduced servicing ratios/cost... HR servicing ratios............. Attitude survey.

average cost per employee served

No negative impact on service Service quality, timeliness..... Workforce data.

quality. Attitude survey/focus groups.

b. GPRA: Improved organizational Other measures to be developed.. As established.

performance.

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[FR Doc. 97-31625 Filed 12-2-97; 8:45 am]

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