# Science and Technology Reinvention Laboratory Personnel Management Demonstration Project, Department of the Army, Army Research, Development and Engineering Command, Edgewood Chemical Biological Center (ECBC) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3AE9-30479 ## Record - **Collection:** Federal Register - **Document type:** Notice - **Published:** December 29, 2009 - **Citation:** 74 FR 68936 ## Text DEPARTMENT OF DEFENSE Office of the Secretary Science and Technology Reinvention Laboratory Personnel Management Demonstration Project, Department of the Army, Army Research, Development and Engineering Command, Edgewood Chemical Biological Center (ECBC) AGENCY: Office of the Under Secretary of Defense (Civilian Personnel Policy) (DUSD (CPP)), Department of Defense (DoD). ACTION: Notice of approval of a demonstration project final plan. SUMMARY: Section 342(b) of Public Law 103-337, as amended, authorizes the Secretary of Defense to conduct personnel demonstration projects at Department of Defense (DoD) laboratories designated as Science and Technology Reinvention Laboratories (STRLs). The above-cited legislation authorizes DoD to conduct demonstration projects to determine whether a specified change in personnel management policies or procedures would result in improved Federal personnel management. Section 1107 of Public Law 110-181 as amended by section 1109 of Public Law 110-417 requires the Secretary of Defense to execute a process and plan to employ the Department's personnel management demonstration project authorities found in title 5 United States Code (U.S.C.) section 4703 at the STRLs enumerated in 5 U.S.C. 9902(c)(2), as redesignated in section 1105, Public Law 111-84, and 73 Federal Register (FR) 73248 to enhance the performance of these laboratories. The ECBC is listed as one of the designated STRLs. DATES: Implementation of this demonstration project will begin no earlier than February 1, 2010. FOR FURTHER INFORMATION CONTACT: Edgewood Chemical Biological Center ECBC: Ms. Kim Hoffman, U.S. Army ECBC, Directorate of Program Integration, Workforce Management Office (RDCB-DPC-W), 5183 Blackhawk Road, Building 3330, Room 264, Aberdeen Proving Ground, MD 21010-5424. DoD: Ms. Betty Duffield, CPMS-PSSC, Suite B-200, 1400 Key Boulevard, Arlington, VA 22209-5144. SUPPLEMENTARY INFORMATION: 1. Background Since 1966, many 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. Pursuant to the authority provided in section 342(b) of Public Law 103-337, as amended, a number of DoD STRL personnel demonstration projects were approved. These projects are “generally similar in nature” to the Department of Navy's “China Lake” Personnel Demonstration Project. The terminology, “generally similar in nature,” does not imply an emulation of various features, but rather implies a similar opportunity and authority to develop personnel flexibilities that significantly increase the decision authority of laboratory commanders and/or directors. This demonstration project involves: (1) Two appointment authorities (permanent and modified term); (2) extended probationary period for newly hired engineering and science employees; (3) pay banding; (4) streamlined delegated examining; (5) modified reduction-in-force (RIF) procedures; (6) simplified job classification; (7) a pay-for-performance based appraisal system; (8) academic degree and certificate training; (9) sabbaticals; and (10) a Voluntary Emeritus Corps. 2. Overview DoD published notice in 73 FR 73248, December 2, 2008, that pursuant to subsection 1107(c) of Public Law 110-181 the three STRLs listed in 73 FR 73248 not having personnel demonstration projects at this time may adopt any of the flexibilities of the other laboratories listed in subsection 9902(c)(2), as redesignated in section 1105 of Public Law 111-84, and further provided notice of the proposed adoption of an existing STRL demonstration project by two centers under the United States (U.S.) Army Research, Development and Engineering Command (RDECOM): ECBC and Natick Soldier Research, Development and Engineering Center (NSRDEC). The notice indicated that these two centers intended to adopt the STRL Personnel Management Demonstration project designed by the U.S. Army Communications—Electronics Command, Research, Development, and Engineering organizations (a reorganization changed this designation to the U. S. Army Communications—Electronics Research, Development and Engineering Center (CERDEC)). Relative to ECBC's intent to adopt the CERDEC demonstration project, DoD received comments from three employees during the public comment period which ended on January 2, 2009: Two presented interests on behalf of the Unions they represent and the other presented comments on behalf of the organization itself. All comments were carefully considered. The following summary addresses the pertinent comments received, provides responses, and notes resultant changes to the original CERDEC project plan published in 66 FR 54872, October 30, 2001. Each commenter addressed more than one topic and each topic was counted separately. Thus, the total number of comments exceeds the number of individuals cited above. A. Pay-for-Performance System Ten comments were received that relate to the pay-for-performance system. (1) General Comments: Three comments were received concerning the pay-for-performance system in general as follows: questioned impact to “good” workers since this system is designed to reward “very high” performers; asserted that individual performance appears to be more critical and questioned impact to teamwork; and expressed concern that favoritism could impact employees getting a fair share in payouts from pay pools which have a fixed amount of money. Response: The demonstration project performance management system is designed to provide greater differentiation among performers, as opposed to the current Total Army Performance Evaluation System (TAPES) which has evolved into most employees being rated at the same level. This new approach is based on a pay-for-performance model which allows for greater communication between supervisor and employee, promotes clearer accountability of performance, facilitates employee career progression and provides an understandable and rational basis for pay changes by linking pay and performance. Under a pay-for-performance appraisal system there is a fixed amount of money for allocation to all employees rated. It is expected that higher performing employees earn greater rewards than lower performing employees. It is important to note that under this demonstration project, no employee who is rated at an acceptable level (10 or above on a scale of 0-50) loses base pay. A reduction in base pay could only occur if an employee receives an unacceptable rating (9 or below on a scale of 0-50) and is the subject of an adverse action. Pay-for-performance systems are often viewed as increasing competition among employees for limited financial rewards and are believed to have a negative impact on teamwork. However, the Office of Personnel Management (OPM), in an independent evaluation of laboratory demonstration projects analyzed this factor and concluded that teamwork had actually improved and that the pay-for-performance system had no negative effect on teamwork. Furthermore, a rigorous review process is an integral part of the demonstration project's pay-for-performance system which links base pay and bonus to organizational, team and individual performance. Interpersonal skills is one of the critical performance elements in every employee's performance plan. This element includes such qualities as being an effective team player, coordinating actions with others, being considerate of differing viewpoints, maintaining effective relationships, etc., all of which encourage sustainment of teamwork. Lastly, special act and other traditional 5 U.S.C. awards are still viable options that can be used to reward groups for exceptional team work. Major features in the design of the rating system are intended to overcome perceptions of favoritism and limited differentiation among ratings. Improved communication throughout the rating cycle facilitates building a common understanding of performance expectations and progress toward achieving those expectations. The automated performance management tool helps assure that objectives are in place on a timely basis, accomplishments are recorded, and communication related to performance is on-going. The pay-for-performance system uses standard performance elements and performance benchmarks to evaluate employee performance that supports the mission, allows managers to make meaningful performance distinctions, considers pay in making performance-based pay decisions and provides information to employees about the results of the appraisal process and pay decision. At the end of the rating period, employees submit their accomplishments. Following the initial scoring of each employee, raters in an organizational unit along with their next level of supervision, meet to ensure consistency and equity of the ratings. Through discussion and consensus building, consistent and equitable ratings are determined based on similar level of performance, level of work and level of base pay. This improves upon the current performance appraisal system where there are only brief performance standards described for the fully successful level and rating is typically done by a supervisor with review and approval by a senior rater. The demonstration project plan includes other means of checks and balances that address perceptions of favoritism and bias. A Personnel Management Board has been created to provide oversight for the project and includes members representing each directorate. A cross-section of employees participate in a Workforce Advisory Group and are actively involved in identifying training needs and developing operating procedures. Training in the pay-for-performance system and other aspects of the demonstration project will be mandatory for all supervisors. Finally, perceived fairness of the appraisal process has been identified as an area for evaluation and will be included in surveys of the workforce and focus group discussions with employees. An annual report with a thorough review and analysis of the pay-for-performance cycle will be published to assist in providing greater transparency. (2) Rating Comments: One commenter believes that higher scores are needed each year to receive pay increases and questioned whether salary increases taper off after a few years. The same commenter questioned whether managers will be involved in rating employees they do not have direct contact with and whether pay pool managers will be familiar with those they are rating. Response: Base pay increases and/or bonuses are earned based on an employee's total performance score. Scores of 21 or higher earn a performance payout. Higher scores are not needed each year to receive a base pay increase. Base pay increases can continue to be earned which allows progression in base pay up to the maximum base pay rate for the employee's pay band. Once an employee reaches the maximum base pay rate for their pay band their base pay is “capped,” similar to when an employee reaches step 10 of their General Schedule (GS) grade. The performance payout earned is then converted to bonus. The project plan also includes two performance-based rules (midpoint rule and significant accomplishment rule) that may affect base pay increases. Refer to III.C.10. and III.C.11. for how these rules relate to scores. It is important to note that as base pay progresses over time, performance expectations also increase and are factored into the appraisal process. As to the rating process, first-line supervisors initially rate their employees. These initial scores are then subject to discussion, review and reconciliation and may result in adjustments upward or downward. Review of the scores across organizational lines continues at succeeding levels up the management chain to the final level of review which is the pay pool manager. Participants in the next level reconciliation will have full knowledge of their respective preceding level's discussions and decisions to represent those employees. Other participants may have varying degrees of direct knowledge of an employee's performance but will be knowledgeable of the nature of the technologies/work being performed. The requirement for raters to explain their recommended ratings and the active discussion within the group emphasizes to each rater the importance of taking performance management earnestly. The process of reconciliation serves to overcome variations in expectations from one rater to another, helps to ensure that different raters apply the performance benchmarks consistently, and resolves variances in what one manager considers exceptional work from another who judges it as merely acceptable. (3) Pay Pools Comments: One commenter recommended that the base pay and bonus pay pool funding percentage be revised to set a minimum percentage rather than ranges. Another commenter questioned how many pay pools would be set for the Rock Island site. This same commenter asked who would serve as the pay pool manager(s) for the Rock Island site. Response: The laboratory considered the recommendation to alter the pay pool funding percentage and has amended III.C.7. “Pay Pools” to define pay pool funding for base pay increases and bonuses at minimum levels as opposed to a range of minimum and maximum. The base pay increase pool of money will be set at no less than the current minimum of 2% and the bonus increase pool of money will be set at no less than the current minimum of 1%. Higher amounts may be set within budgetary limits. With regard to the questions concerning pay pools and pay pool manager(s) at one of ECBC's remote sites (Rock Island), the Personnel Management Board will annually determine the number of pay pools using guidelines such as size, number of supervisory/non-supervisory employees participating, etc., and make a recommendation to the Technical Director for final approval. Once the pay pools have been decided, then the pay pool managers will be named for each pay pool by the Personnel Management Board. All employees will be informed of their pay pool assignment and designated pay pool manager. (4) Payout Determinations Comments: One commenter questioned how payouts are computed and the factors that affect the equation. The same commenter asked whether management can decide to not give a base pay increase or bonus for an employee's rating and give payouts in the form of all bonus rather than a combination of base pay increase and bonus. Response: Management cannot arbitrarily decide to not give a pay increase or a bonus. An employee's performance payout is based on the employee's score, the shares earned for that score, the value of the shares and the employee's adjusted base pay. The performance payout is calculated based on provisions set forth in the FR Notice and the resulting payout is a base pay increase and/or bonus. Scores translate into shares and each point above the score of 20 is worth one tenth of a share with a maximum score of 50 equaling 3 shares. There is no discretion on the amount of shares earned. For example, a score of 32 earns 1.2 shares. The value of a single share, however, may vary from one pay pool to another since it is based on factors relative to individual pay pools (such as the number of shares awarded in the pay pool, etc. ). Figure 3 (III.C.8.) illustrates the formula for computing share value. The value of a share is computed after the scores for each individual in the pay pool have been finalized. The payout (base pay increase/bonus) is calculated by first multiplying the shares earned by the share value and multiplying that product by base pay. An adjustment is then made to account for locality pay or staffing supplement. Payouts are typically a combination of base pay increase and bonus. The split is generally determined by the funding in the pay pool ( i.e., if the pay pool funding is two-thirds base pay and one-third bonus funding, then the payout split would be two-thirds base pay increase and one-third bonus). For employees at the maximum base pay of their band or affected by a performance-based rule, some or all of the payout converts to bonus as determined by the end of the band or the specific performance rule. The full amount of the base pay increase and bonus may also be affected if an employee leaves the demonstration project prior to the effective date of the payout. There is some discretion on the part of the pay pool manager to shift all or some of an employee's bonus portion to base pay increase depending on available unexpended base pay funds and other criteria to be established. Any dollar increase to an employee's base pay increase will be offset by a corresponding decrease in the employee's bonus. Thus, the employee's total performance payout is unchanged. Internal operating procedures will provide further guidance. B. Pay Nine comments were received related to pay. (1) General Comments: Five comments were received regarding pay in general as follows: whether the GS salary tables will be used as a guide and at what point an employee's salary is capped; whether employees will receive the annual general pay increase; an interest in history of employees reaching the top of their pay band since GS employees can reach the top of their grade over time; a remark that morale could be an issue for careerists who have paid their dues since new employees under the demonstration will have greater monetary incentives available to them; and a suggestion to relieve pay compression by providing additional waivers to permit full locality payment. Response: The minimum and maximum rate of base pay for each band continues to be linked to the GS rates of pay. The rates are updated each year following the general pay increase which typically takes place in January. As long as the general pay increase is authorized, all employees in the demonstration project who are performing at an acceptable level will receive it. Acceptable performance under the demonstration project is defined as a total score of 10 or above and every performance element scored at 10 or above (on a scale of 0-50). If an employee is on a Performance Improvement Plan (PIP) due to unacceptable performance when the general pay increase takes effect, he/she will not receive it until such time as the performance improves to an acceptable level and remains so for at least 90 days. Maximum potential base pay progression depends on the end point of the employee's pay band. For example, if the base pay rate range is GS-12/step 1 to GS-13/step 10, as is the case for DE-III, the employee can progress in base pay beyond the GS-12/step 10 base pay rate up to the maximum of the GS-13/step 10 base pay rate equivalent based on individual performance. Refer to III.A.2. which illustrates the pay band structure and the crosswalk to GS grades. Under the demonstration project, base pay progression within a pay band is directly linked to individual performance. As a result, we can not specify a certain number of years it would take to progress from the minimum to the maximum of the band. However, progress through the band will be one of the areas assessed. As previously stated, employees are eligible (based on their performance scores) to receive annual base pay increases (unless they have reached the top of their band or are impacted by a performance-based rule). Annual base pay increases replace the traditional within-grade increases and quality step increases. In addition, an employee under the GS system is limited in base pay progression to step 10 of their grade. Under the demonstration project, however, employees are placed in pay bands which cover a wider range of base pay than a single grade (except for DK-III) and promotions are required only for movement to a higher band. Under the GS pay system, employees must perform at an acceptable level and meet length of service requirements in order to be entitled to a within-grade increase. The waiting period for a step increase changes from one year to two years and then to three years over time, totaling eighteen years for normal progression in grade from step 1 to step 10. While it is true that most GS employees will reach step 10 of their grade given enough time, it is not a guarantee because of the performance factor. The demonstration pay-for-performance system rewards good performance and as such, it is entirely possible that employees in the demonstration project could receive base pay increases that are equivalent to or higher than a step increase each year and could, therefore, progress in their band faster than they would under the GS system. Motivating and incentivizing the workforce is one of the objectives of the laboratory demonstration project. In fact, in an evaluation of laboratory demonstration projects, OPM conducted a pulse survey which concluded that motivation levels remained high and that pay satisfaction increased in all labs. As previously described, employees have the opportunity to advance without competition within a pay band, thus eliminating previous promotion requirements and grade limitations. While it is true that under the demonstration project pay may be set anywhere in the band for newly hired employees, decisions are based on the qualifications of the individual, the unique requirements of the position and the labor market considerations relative to the occupation. Other demonstration projects who are offering higher starting base pay for interns, as an example, have seen a significant increase in the recruitment of graduates with higher Grade Point Averages (GPAs) and are able to recruit at more selective colleges and universities. Although the starting base pay is higher than the GS counterpart, this is offset by slower pay progression that is dependent upon individual performance and tends to be slower than the rapid career ladder promotions that occur in the GS system. Consequently, at the conclusion of the 18-30 month internship, employees' base pay is comparable. As to the last comment, there is concern that individuals whose base pay is at the higher end of the GS-15 base pay range do not receive their full locality pay. This situation also occurs within the demonstration project for the Engineering and Science (E&S) and the Business and Technical (BT) occupational families since Pay Band IV of both is linked to a range of GS base pay with a cap equivalent to the GS-15, step 10 base pay rate. However, increasing the maximum base pay for GS-15 equivalent pay bands will create a compensation imbalance with individuals in Scientific and Professional and Senior Executive Service positions. This locality cap issue is being examined at higher levels; therefore, no change is proposed. (2) Supervisory Pay Comments: One commenter proposed that supervisory/team leader pay adjustments and pay differentials be changed to provide up to ten percent for team leaders. Another commenter asked whether supervisory pay is based on the number of employees supervised. Response: The suggestion to increase the maximum for team leader pay adjustments and differentials from five percent to ten percent of base pay was considered and senior management agreed that this change would increase our flexibility to incentivize team leaders when warranted. Therefore, language has been added to revise the amount of pay adjustments and pay differentials for team leaders from “up to five percent” to “up to ten percent” in III.F.7. “Supervisory and Team Leader Pay Adjustments” and III.F.8. “Supervisory/Team Leader Pay Differentials.” As to the second comment, for a position to be classified as supervisory, the individual must spend at least 25 percent of their time performing supervisory duties, e.g. assigning/reviewing work, evaluating performance, approving leave, etc. Pay is not based on a specific number of employees supervised but the number of employees supervised may be an influencing factor in determinations related to supervisory base pay adjustments and pay differentials. Adjustments and differentials will be used selectively, not routinely, to compensate supervisors and/or team leaders who meet detailed criteria contained in the demonstration project internal operating procedures. (3) Internal Placement Comments: One commenter suggested that a pay increase of up to a defined amount should be permitted when a person moves to a position of greater responsibility (reassignment) within the same pay band. Another commenter inquired how performance payouts are handled for employees on temporary assignments/promotions and whether pay increases are withdrawn when the temporary assignment/promotion ends. Response: Since broad pay bands include positions of varying complexity and responsibility, a base pay increase would provide incentive to encourage employees to accept positions of greater responsibility in the same pay band. Therefore, language has been added at III.F.5. to address this issue and to define “reassignment” in III.E.2. A reassignment may be effected without a change in base pay. However, a base pay increase may be granted where a reassignment significantly increases the complexity, responsibility, authority or for other compelling reasons. Such an increase is subject to specific guidelines to be established by the Personnel Management Board. With regard to a temporary assignment/promotion, an employee can be rated if they are under approved objectives for the position for a minimum of 120 days. The payout is calculated using the computations in III.C.8. When a temporary promotion is terminated, pay will be determined based on the position of record, with appropriate adjustments to reflect pay events during the temporary promotion, subject to policies established by the Personnel Management Board. Those adjustments may not increase the base pay for the position of record beyond the applicable pay band maximum base pay. Internal operating procedures will provide further guidance. C. Extraordinary Achievement Recognition Two comments were received about the Extraordinary Achievement Recognition. Comments: One commenter suggested that the Extraordinary Achievement Recognition language be moved to a separate section since it is considered after and separate from the pay pool payout process. The same commenter also proposed that the Extraordinary Achievement Recognition language be revised to allow for bonus as an alternative to a base pay increase since capped employees would be precluded from receiving this recognition. Response: While an Extraordinary Achievement Recognition is considered after the pay pool payout process, it is not entirely separate from the process itself. Following the performance evaluation process, the pay pool manager is the agent who requests permission from the Personnel Management Board to grant a base pay increase higher than the one generated by the compensation formula for that employee. However, senior management is in agreement that a separate paragraph would clarify the intent and process for the Extraordinary Achievement Recognition and the provision has been moved to a separate paragraph in III.C.9. “Base Pay Increases and Bonuses.” As to the second comment, language has been added to the new section at III.C.9. as referenced above allowing for the option to grant either a base pay increase and/or a bonus as an Extraordinary Achievement Recognition. This permits employees whose base pay is at the maximum of their pay band to receive this recognition. D. Pay Bands Two comments were received concerning Pay Bands. Comments: One commenter advised that reconsideration be given to initial placement of all GS-14 engineers and scientists to the E&S occupational family (DB) Pay Band IV and requested clarification of how any subsequent conversions for GS-14 E&S positions will be handled. Another comment received suggested that the number of Pay Band V positions be expanded to permit a certain number or percent at each STRL since the current limited number has already been allocated to other organizations which would preclude ECBC from having this flexibility. Response: We have carefully considered these comments. With regard to placement of GS-14 E&S employees, language has been changed in III.A.1. and added in III.A.2. to reflect that upon conversion into the demonstration project, E&S employees currently at grade GS-14 will be assigned to either Pay Band III or Pay Band IV based on a review of the duties and responsibilities of the position as compared to the classification criteria. In response to the second comment, the use of Pay Band V has proven to be beneficial in recruiting and retaining highly-qualified senior scientific technical managers in those STRL personnel demonstration projects that have such positions. The limited number of such positions makes it difficult to meet the requirements of all the STRLs who wish to use this flexibility. The DoD is currently reviewing all Pay Band V positions. No change is proposed in the number of Pay Band V positions pending the completion of the DoD review. E. Probationary Period Two comments were received about the extended probationary period. Comments: One commenter advised that a recent court decision limited the intent of the extended probationary period. The other commenter questioned why the probationary period is extended to three years and is only applicable to new engineers and scientists. Response: The purpose of extending the probationary period is to allow supervisors a proper period of time to fully evaluate an employee's performance and conduct. It applies to newly hired engineers and scientists since this group is often given advanced training during their first year on the job, which removes them from the workplace and direct observations of their performance. This can minimize the time available for the supervisor to determine whether the employee should be retained beyond the probationary period. The extended probationary period of up to three years allows supervisors sufficient time to properly, objectively and completely evaluate an employee's performance and conduct. Probationary employees whose conduct and/or performance is unsatisfactory may be terminated in accordance with the procedures in part 315 of title 5 of the Code of Federal Regulations (CFR). However, a recent court decision has extended adverse action procedural and substantive protections to individuals defined as employees without regard to whether the individuals are serving a probationary period. To permit termination during the probationary period without using adverse action procedures, waivers have been added under IX. “Required Waivers to Law and Regulation” to allow for up to a three-year probationary period and to remove from the definition of employee, except for those with veterans' preference, those serving a probationary period under an initial appointment. If a probationary employee's performance is determined to be satisfactory at a point prior to the end of the three-year period, a supervisor has the option of ending the probationary period at an earlier date, but not before the employee has completed one year of continuous service. F. Conversion Two comments were received related to conversion into the demonstration project. Comments: One commenter inquired whether management can place an employee into a lower band upon conversion than where they are under the GS system. Another commenter recommended that conversion of interns into the demonstration project occur when the employees reach their full performance level for their GS position. Response: Initial entry into the demonstration project is accomplished through a full employee-protection approach that ensures initial placement of each employee into a pay band with no loss of pay upon conversion. Employees are placed in an occupational family ( i.e., DB, DE, DK) based upon their occupational series and in a pay band that includes their current grade. The GS-14 grade occurs in two bands of the E&S occupational family, which are Pay Band III and Pay Band IV. The placement of GS-14 employees in the DB family will be decided upon a review of the position's duties and responsibilities as compared to the demonstration project classification criteria and may occur in either DB Pay Band III or DB Pay Band IV. Placement of a GS-14 into DB-III, however, is not placement in a lower graded position. As to the second comment, interns typically receive several career promotions prior to reaching their full performance level. Average base pay performance payouts may not provide increases as substantial as career promotions under the GS. Delaying conversion into the demonstration project pay bands until interns reach their full performance level will assure that the interns' base pay is commensurate with the full performance level base pay rate. Therefore, the language at II.E. has been revised to reflect that interns will not convert into demonstration project pay bands until they reach their full performance level. G. Classification One comment was received concerning classification. Comment: One commenter questioned that with the GS system having over 400 series and the laboratory demonstration project with only 22, how classification of positions will be conducted and who ( i.e., employees) will be involved in that process. Response: OPM series and position titles will continue to be used in the demonstration project. Based on the nature of the work, the series will be assigned to one of three occupational families. A listing of the series assigned to each occupational family for ECBC is contained in Appendix B. Demonstration project classification criteria will be developed for each occupational family. These classification criteria will replace the OPM classification standards and guides for purposes of grading. The Technical Director will have classification authority and this authority may be re-delegated. As is the case now, Civilian Personnel Advisory Center (CPAC) specialists will assist the classification authority to assure that positions are properly classified in accordance with the demonstration project criteria. On conversion into the demonstration project, employees will be assigned to an occupational family and pay band based on their current occupational series and grade. Since there is an overlapping band for engineers and scientists at the GS-14 level, the assignment of the pay band will be on a case-by-case basis. The classification conversion will be performed by the servicing Civilian Personnel Office, and each employee will receive a Notification of Personnel Action, Standard Form 50, documenting the change from GS to the demonstration project. Employees will continue to be able to initiate a classification appeal as described in the operating procedures. H. Promotion One comment was received related to promotion eligibility. Comment: One commenter suggested that the minimum score of “30” to be eligible for a competitive promotion is too high. Response: We considered the suggestion to lower the minimum performance score of “30” required for promotion eligibility. Scores of 10 and higher are considered “acceptable performance” and scores of 21 and higher earn a performance payout. Setting a minimum score of 30 for promotion sets the requirement higher than the score for a performance payout and may discourage the use of scores in the 21 to 29 range. Accordingly, the minimum performance score for promotion has been changed from “30” to “21” in III.E.1. “Promotions.” I. Reduction in Force (RIF) One comment was received regarding RIF. Comment: One commenter asked what criteria is used during a RIF. Response: Existing RIF procedures will be followed with slight modifications. Separate competitive areas will be established for demonstration project employees at each geographic location. Within each competitive area, competitive levels will be established based on the occupational family (DB, DE, DK), pay band, occupational series, etc. In order to determine who is affected in a RIF, employees are listed in RIF retention order based on tenure group, veterans' preference and adjusted length of Federal service, in that sequence. An employee's length of service is adjusted by receiving additional years of service based on the last three total performance scores during the preceding four years ( e.g., 48-50 = 10 years, 45-47 = 9 years, and so on; refer to II.H.3.). A score below 20 adds no credit for RIF. Under the demonstration project, the adjusted service computation date is calculated by adding the additional years, not by averaging. J. Historical Analysis Two comments were received concerning demonstration project data results. Comment: One commenter questioned acceptance of the demonstration project in comparison to the GS system beyond anecdotal evidence and inquired whether surveys were conducted at other demonstration project sites. Another commenter asserted that CERDEC has not presented data showing a more effective organization under the demo project. Response: The Office of Personnel Management (OPM) started conducting surveys of STRL personnel demonstration projects as far back as 1996 and have several reports, all of which include CERDEC data subsequent to its implementation, on their Web site at http://www.opm.gov/aps/about/reports/index.aspx. According to the 2006 report, “historic data for past demonstration projects” * * * “show support grows slowly over time and that it takes at least five years to gain the support of two-thirds of the participating employees. Typically, support stabilizes at the two-thirds level, and that level is considered a benchmark with respect to the change efforts these demonstration projects represent.” K. Miscellaneous Comments There were ten comments in this area as follows: (1) Positive Comment One commenter voiced support of the demonstration and remarked that the flexibilities afforded will help the Center achieve greater effectiveness. (2) Administrative Changes/Technical Updates Two comments were received related to administrative changes and technical updates to the Federal Register document. Comments: One commenter advised that updates throughout the document were needed to reference ECBC rather than CECOM RDE and to reflect legal or regulatory changes. The same commenter also suggested that the occupational series listing in Appendix B be revised to include those series employed at ECBC. Response: A number of changes were made to the final Federal Register to include ECBC as the name of the organization; its organizational and workforce information; approval authorities; and technical modifications to conform to changes in the law and governing regulations. In addition, some areas have been re-formatted for clarity and to improve readability. Throughout the document changes have been made to clarify and provide consistent use of pay terminology. Minor revisions have been made to Appendix C: Performance Elements to be consistent with the descriptions currently in use by CERDEC. (3) Resources One comment was received regarding staffing requirements for the project. Comment: One commenter asked what additional staffing requirements (personnel, software) are required to implement the project. Response: There is currently one civilian who is assigned overall demonstration project management responsibility for ECBC. This employee is assisted by a part-time contractor. Staffing requirements may be adjusted over the course of the project as necessary. Each directorate/office will continue to process personnel actions through their respective human resources analyst. It is expected that various working groups beyond the Personnel Management Board will be established to contribute to various components and phases of the project. As to software, ECBC is planning to adopt an existing automated system, developed at Fort Monmouth, NJ. It's a Web-based tool that supports development of position descriptions and all actions in support of the pay-for-performance rating process. The application enables employees to input objectives and record accomplishments, raters to score the performance, and higher-level supervisors to review employee scores and analyze scoring trends to achieve greater consistency across organizational lines. (4) Reference to the National Security Personnel System (NSPS) Five comments were received that made reference to NSPS. Comment: Two comments cited quotes from publications relating to fairness under the NSPS pay-for-performance system. Two comments cited quotes from articles and one comment referenced the 2008 National Defense Authorization Act (NDAA) concerning inclusion of bargaining unit members under NSPS. Management will continue to comply with the labor relation provisions of 5 U.S.C. 4703(f) and 7117 concerning inclusion of bargaining unit employees. With regard to references concerning inclusion of bargaining unit members under NSPS, collective bargaining rights are granted under Federal law and the demonstration project does not impede those rights. ECBC is committed to meeting its bargaining obligation under the law. 3. Access to Flexibilities of Other STRLs Flexibilities published in this Federal Register shall be available for use by all STRLs listed in section 9902(c)(2) of title 5, United States Code, as redesignated in section 1105 of Public Law 111-84, if they wish to adopt them in accordance with DoD Instruction 1400.37; pages 73248 to 73252 of volume 73, Federal Register; and the fulfilling of any collective bargaining obligations. Dated: December 17, 2009. Patricia Toppings, OSD Federal Register Liaison Officer, Department of Defense. Table of Contents I. Executive Summary II. Introduction A. Purpose B. Problems With the Present System C. Changes Required/Expected Benefits D. Participating Organizations E. Participating Employees and Union Representation F. Project Design G. Personnel Management Board III. Personnel System Changes A. Pay Banding B. Classification C. Pay for Performance D. Hiring Authority E. Internal Placement F. Pay Setting G. Employee Development H. Reduction-in-Force Procedures IV. Implementation Training V. Conversion A. Conversion to the Demonstration Project B. Conversion out of the Demonstration Project C. Personnel Administration D. Automation E. Experimentation and Revision VI. Project Duration VII. Evaluation Plan A. Overview B. Evaluation Model C. Evaluation D. Method of Data Collection VIII. Demonstration Project Costs A. Cost Discipline B. Developmental Costs IX. Required Waivers to Law and Regulation A. Waivers to title 5, U.S.C. B. Waivers to title 5, CFR Appendix A: ECBC Employees by Duty Locations Appendix B: Occupational Series by Occupational Family Appendix C: Performance Elements Appendix D: Intervention Model I. Executive Summary This project adopts with some modifications the STRL personnel management demonstration project, designed by the then named U.S. Army Communications-Electronics Command (CECOM), Research, Development and Engineering (RDE) organizations, with participation and review by the Department of the Army (DA) and DoD. After implementation of the CECOM RDE demonstration project, CECOM reorganized. Its laboratory, the Communications-Electronics Research Development and Engineering Center (CERDEC), was realigned under RDECOM. At the same time, the ECBC was also realigned under RDECOM. The ECBC includes the ECBC organization at the Edgewood Area of Aberdeen Proving Ground, employees matrixed to the Joint Program Executive Office for Chemical/Biological Defense (JPEO-CBD) and ECBC employees with duty stations at other sites. The ECBC provides integrated science, technology and engineering solutions to address chemical and biological vulnerabilities and threats. ECBC's core competency is working with chemical and biological agents at all stages of the materiel life cycle. ECBC maintains the following fundamental capabilities: (1) Chemistry and Bioscience of Chemical and Biological Warfare. (2) Inhalation Toxicology. (3) Aerosol Physics. (4) Filtration Sciences. (5) Agent Spectroscopy/Algorithm Development. (6) Chemical and Biological Testing and Evaluation. (7) Chemical and Biological Materiel Acquisition. (8) Agent Handling and Surety. (9) Chemical Munitions Field Operations. In order to sustain these unique capabilities, the ECBC must be able to hire, retain and continually motivate enthusiastic, innovative, and highly-educated scientists and engineers, supported by skilled business management and administrative professionals as well as a skilled administrative and technical support staff. The goal of the project is to enhance the quality and professionalism of the ECBC workforce through improvements in the efficiency and effectiveness of the human resource system. The project interventions will strive to achieve the best workforce for the ECBC mission, adjust the workforce for change, and improve workforce satisfaction. This demonstration project extends the CERDEC demonstration project to ECBC. The CERDEC project built on the concepts, and uses much of the same language, as the demonstration projects developed by the Army Research Laboratory (ARL); the Aviation and Missile Research, Development, and Engineering Center (AMRDEC); the Navy's “China Lake;” and the National Institute of Standards and Technology (NIST). The results of the project will be evaluated within five years of implementation. II. Introduction A. Purpose The purpose of the project is to demonstrate that the effectiveness of DoD STRLs can be enhanced by expanding opportunities available to employees and by allowing greater managerial control over personnel functions through a more responsive and flexible personnel system. Federal laboratories need more efficient, cost effective, and timely processes and methods to acquire and retain a highly creative, productive, educated, and trained workforce. This project, in its entirety, attempts to improve employees' opportunities and provide managers, at the lowest practical level, the authority, control, and flexibility needed to achieve the highest quality organization and hold them accountable for the proper exercise of this authority within the framework of an improved personnel management system. Many aspects of a demonstration project are experimental. Modifications may be made from time to time as experience is gained, results are analyzed, and conclusions are reached on how the system is working. The provisions of this project plan will not be modified, or extended to individuals or groups of employees not included in the project plan without the approval of the ODUSD(CPP). The provisions of DoDI 1400.37, are to be followed for any modifications, adoptions, or changes to this demonstration project plan. B. Problems With the Present System The current Civil Service GS system has existed in essentially the same form since the 1920's. Work is classified into one of fifteen overlapping pay ranges that correspond with the fifteen grades. Base pay is set at one of those fifteen grades and the ten interim steps within each grade. The Classification Act of 1949 rigidly defines types of work by occupational series and grade, with very precise qualifications for each job. This system does not quickly or easily respond to new ways of designing work and changes in the work itself. The performance management model that has existed since the passage of the Civil Service Reform Act has come under extreme criticism. Employees frequently report there is inadequate communication of performance expectations and feedback on performance. There are perceived inaccuracies in performance ratings with general agreement that the ratings are inflated and often unevenly distributed by grade, occupation and geographic location. The need to change the current hiring system is essential as ECBC must be able to recruit and retain scientific, engineering, acquisition support and other professionals and skilled technicians. ECBC must be able to compete with the private sector for the best talent and be able to make job offers in a timely manner with the attendant bonuses and incentives to attract high-quality employees. Finally, current limitations on training, retraining and otherwise developing employees make it difficult to correct skill imbalances and to prepare current employees for new lines of work to meet changing missions and emerging technologies. C. Changes Required/Expected Benefits The primary benefit expected from this demonstration project is greater organizational effectiveness through increased employee satisfaction. The long-standing Department of the Navy “China Lake” and NIST demonstration projects have produced impressive statistics on increased job satisfaction and quality of employees versus that for the Federal workforce in general. This project will demonstrate that a human resource system tailored to the mission and needs of the ECBC workforce will facilitate: (1) Increased quality in the workforce and resultant products, (2) Increased timeliness of key personnel processes, (3) Increased retention of “excellent performers,” (4) Increased success in recruitment of personnel with critical skills, (5) Increased management authority and accountability, (6) Increased satisfaction of customers, and (7) Increased workforce satisfaction with the personnel management system. An evaluation model was developed for the Director, Defense, Research and Engineering (DDR&E) in conjunction with STRL service representatives and the OPM. The model will measure the effectiveness of this demonstration project, as modified in this plan, and will be used to measure the results of specific personnel system changes. D. Participating Organizations The RDECOM ECBC is comprised of the ECBC at the Edgewood Area of Aberdeen Proving Ground, Maryland, ECBC employees matrixed to JPEO-CBD and ECBC employees geographically dispersed at the locations shown in Appendix A. It should be noted that some sites currently employ fewer than ten people and that the sites may change should ECBC reorganize or realign. Successor organizations will continue coverage in the demonstration project. E. Participating Employees and Union Representation This demonstration project will cover approximately 1,100 ECBC civilian employees under title 5, U.S.C. in the occupations listed in Appendix B. The project plan does not cover members of the Senior Executive Service (SES), Scientific and Professional (ST) employees, Federal Wage System (FWS) employees, employees presently covered by the Defense Civilian Intelligence Personnel System (DCIPS), Department of Army (DA) and Army Command centrally funded interns and students employed under the Student Career Experience Program. Employees on temporary appointments will not be covered in the demonstration project. Department of Army, Army Command centrally funded, and local interns (hired prior to implementation of the project) will not be converted to the demonstration project until they reach their full performance level. They will also continue to follow the TAPES performance appraisal system. Local interns hired after implementation of the project will be covered by all terms of the demonstration project. The National Federation of Federal Employees (NFFE), Federal District 1, Local 178 and the American Federation of Government Employees (AFGE) Local 15 represent a majority of ECBC employees. Of those employees assigned to ECBC, approximately 87% are represented by a labor union. To foster union acceptance of ECBC's proposed personnel demonstration project, initial discussions with the local NFFE union began in May 2006. Later that same month, at ECBC's invitation, the NFFE Local 178 participated in a presentation briefed by CERDEC which covered the major aspects of their personnel demonstration project plan. Subsequent to this meeting, senior leadership for both ECBC and NFFE Local 178 had changed. ECBC's new Technical Director continued to support the former Director's initiative to adopt a personnel demonstration project and committed to the effort. In July 2008, senior management arranged for another meeting with NFFE which included the new local president and regional representative to re-introduce and discuss key features of the project plan. In October 2008, ECBC began similar discussions with the AFGE Local 15. ECBC has maintained on-going communication with the Unions regarding its intent to pursue approval for a laboratory personnel demonstration project. The unions have received updates as specific phases of the project have evolved and have been invited to attend town hall meetings and smaller information sessions provided to the workforce. ECBC will continue to fulfill its obligation to consult and/or negotiate with all labor organizations in accordance with 5 U.S.C. Sections 4703(f) and 7117. F. Project Design The ECBC has been a DOD STRL since June 1995. This status authorized ECBC to participate in all of the STRL initiatives, to include the authority to carry out personnel demonstration projects. In December 2005, RDECOM Headquarters asked ECBC of their intent to pursue a personnel demonstration project. In-depth discussions with both CERDEC and NSRDEC resulted in an ECBC Laboratory Demonstration decision brief to its senior leadership in April 2006. At the conclusion of that briefing, ECBC senior leadership voted to move toward adopting CERDEC's existing laboratory personnel demonstration project. Subsequently, the ECBC submitted a request to adopt the CERDEC demonstration project. The CERDEC demonstration project was the most recently approved demonstration project, used an inclusive approach for its design, and benefitted from the experiences of prior STRL demonstration projects. After the enactment of the National Defense Authorization Act for Fiscal Year 2008 providing for full implementation of the personnel demonstration project, the DoD announced ECBC's intent to adopt the CERDEC demonstration project in 73 FR 73248, December 2, 2008. G. Personnel Management Board ECBC has created a Personnel Management Board to oversee and monitor the fair, equitable, and consistent implementation of the provisions of the demonstration project to include establishment of internal controls and accountability. Members of the board are senior leaders appointed by the ECBC Technical Director. As needed, ad hoc members, (such as labor counsel, human resource representatives, etc. ) will serve as advisory members to the board. The board will execute the following: (1) Determine the composition of the pay-for-performance pay pools in accordance with the guidelines of this proposal and internal procedures; (2) Review operation of pay pools and provide guidance to pay pool managers; (3) Oversee disputes in pay pool issues; (4) Formulate and execute the civilian pay budget; (5) Manage the awards pools; (6) Determine hiring and promotion base pay as well as exceptions to pay-for-performance base pay increases; (7) Conduct classification review and oversight, monitoring and adjusting classification practices and deciding board classification issues; (8) Approve major changes in position structure; (9) Address issues associated with multiple pay systems during the demonstration project; (10) Establish Standard Performance Elements and Benchmarks; (11) Assess the need for changes to demonstration project procedures and policies; (12) Review requests for Supervisory/Team Leader Base Pay Adjustments and provide recommendations to the appropriate Center Director; (13) Ensure in-house budget discipline; (14) Manage the number of employees by occupational family and pay band; (15) Develop policies and procedures for administering Developmental Opportunity Programs; (16) Ensure that all employees are treated in a fair and equitable manner in accordance with all policies, regulations and guidelines covering this demonstration project; and (17) Monitor the evaluation of the project. III. Personnel System Changes A. Pay Banding The design of the ECBC pay banding system takes advantage of the many reviews performed by DA and DoD. The design has the benefit of being preceded by exhaustive studies of pay banding systems currently practiced in the Federal sector, to include those practiced by the Navy's “China Lake” experiment and NIST. The pay banding system will replace the current GS structure. Currently, the fifteen grades of the GS are used to classify positions and, therefore, to set pay. The GS covers all white-collar work-administrative, technical, clerical and professional. Changes in this rigid structure are required to allow flexibility in hiring, developing, retaining, and motivating the workforce. 1. Occupational Families Occupations with similar characteristics will be grouped together into one of three occupational families with pay band levels designed to facilitate pay progression. Each occupational family will be composed of pay bands corresponding to recognized advancement and career progression expected within the occupations. These pay bands will replace individual grades and will not be the same for each occupational family. Each occupational family will be divided into three to five pay bands with each pay band covering the same pay range now covered by one or more GS grades. Employees track into an occupational family based on their current series as provided in Appendix B. With the exception of the Engineering and Science Pay Band III and IV *, employees are initially assigned to the highest band in which their grade fits. For example a Management Analyst, GS-343-12, in the Business and Technical occupational family is assigned to Pay Band III as illustrated in Figure 1. The upper and lower pay rate for base pay of each band is defined by the GS rate for the grade and step as indicated in Figure 1 except for Pay Band V of the E&S occupational family (refer to III.A.3.). Comparison to the GS grades was used in setting the upper and lower base pay dollar limits of the pay band levels. However, once employees are moved into the demonstration project, GS grades will no longer apply. The current occupations have been examined, and their characteristics and distribution have served as guidelines in the development of the following three occupational families: Engineering and Science (E&S) (Pay Plan DB): This occupational family includes technical professional positions, such as engineers, physicists, chemists, mathematicians, operations research analysts and computer scientists. Specific course work or educational degrees are required for these occupations. Five bands have been established for the E&S occupational family: (1) Band I is a student trainee track covering GS-1, step 1 through GS-4, step 10. (2) Band II is a developmental track covering GS-5, step 1 through GS-11, step 10. (3) Band III * is a full-performance technical track covering GS-12, step 1 through GS-14, step 10. (4) Band IV * includes both senior technical positions along with supervisors/managers covering GS-14, step 1 through GS-15, step 10. (5) Band V is a senior scientific-technical manager. The pay range is: Minimum base pay is 120 percent of the minimum base pay of GS-15; maximum base pay is Level IV of the Executive Schedule (EX-IV); and maximum adjusted base pay is Level III of the Executive Schedule (EX-III). * Bands III and IV overlap at the end and start points. These two bands have been designed following a feature used by the Navy's “China Lake” project. Upon conversion into the demonstration project, employees in the E&S family currently at grade GS-14 will be assigned to either Band III or Band IV based on a review of the duties and responsibilities of the position as compared to the classification criteria. Business & Technical (B&T) (Pay Plan DE): This occupational family includes such positions as computer specialists, equipment specialists, quality assurance specialists, telecommunications specialists, engineering and electronics technicians, procurement coordinators, finance, accounting, administrative computing, and management analysis. Employees in these positions may or may not require specific course work or educational degrees. Four bands have been established for the B&T occupational family: (1) Band I is a student trainee track covering GS-1, step 1 through GS-4, step 10. (2) Band II is a developmental track covering GS-5, step 1 through GS-11, step 10. (3) Band III is a full performance track covering GS-12, step 1 through GS-13, step 10. (4) Band IV is a senior technical/manager track covering GS-14, step 1 through GS-15, step 10. General Support (GEN) (Pay Plan DK): This occupational family is composed of positions for which specific course work or educational degrees are not required. Clerical work usually involves the processing and maintenance of records. Assistant work requires knowledge of methods and procedures within a specific administrative area. This family includes such positions as secretaries, office automation clerks, and budget/program/computer assistants. Three bands have been established for the GEN occupational family: (1) Band I includes entry-level positions covering GS-1, step 1 through GS-4, step 10. (2) Band II includes full-performance positions covering GS-5, step 1 through GS-8, step 10. (3) Band III includes senior technicians/assistants/secretaries covering GS-9 step 1 through step 10. 2. Pay Band Design The pay bands for the occupational families and how they relate to the current GS framework are shown in Figure 1. Figure 1—Pay Band Chart Occupational family Equivalent GS grades I II III IV V E&S GS-01—GS-04 GS-05—GS-11 GS-12—GS-14 GS-14—GS-15 >GS-15. Business & Technical GS-01—GS-04 GS-05—GS-11 GS-12—GS-13 GS-14—GS-15 General Support GS-01—GS-04 GS-05—GS-08 GS-9 Employees will be converted into the occupational family and pay band that corresponds to their GS/GM series and grade. With respect to conversion of Engineering and Science GS-14 positions, placement to a DB-III or DB-IV will be based on a review of the duties and responsibilities of the position as compared to the classification criteria. Each employee converted to the demonstration project is assured, upon conversion, an initial place in the system without loss of pay. New hires will ordinarily be placed at the lowest base pay rate in a pay band. Exceptional qualifications, specific organizational requirements, or other compelling reasons may lead to a higher entrance base pay within a band. As the rates of the GS are increased due to the annual general pay increases, the upper and lower base pay rates of the pay bands will also increase. Since pay progression through the bands depends directly on performance, there will be no scheduled Within-Grade Increases (WGIs) or Quality Step Increases (QSIs) for employees once the pay banding system is in place. Special rate schedules will no longer be applicable to demonstration project employees. Special provisions have been included to ensure no loss of pay upon conversion ( See III.E.9. Staffing Supplements). 3. Pay Band V The pay banding plan expands the pay banding concept used at “China Lake” and NIST by creating Pay Band V for the E&S occupational family. This pay band is designed for Senior Scientific Technical Managers (SSTM). The current definitions of Senior Executive Service (SES) and Scientific and Professional (ST) positions do not fully meet the needs of the ECBC organization. The SES designation is appropriate for executive level managerial positions whose classification exceeds GS-15. The primary competencies of SES positions relate to supervisory and managerial responsibilities. Positions classified as ST are designed for bench research scientists and engineers. These positions require a very high level of technical expertise and have little or no supervisory responsibilities. The ECBC has positions that may warrant classification above GS-15 because of their technical expertise requirements. These positions have characteristics of both SES and ST classifications. Most of these positions are responsible for supervising other GS-15 positions, including lower level supervisors, non-supervisory engineers and scientists, and in some cases ST positions. The supervisory and managerial requirements exceed those appropriate for ST positions. Management considers the primary requirement for these positions to be knowledge of and expertise in the specific scientific and technology areas related to the mission of their organization, rather than the executive leadership qualifications that are characteristic of the SES. Historically, incumbents of these positions have been recognized within the community as scientific and engineering leaders who possess strong managerial and supervisory abilities. Therefore, although some of these employees have scientific credentials that might compare favorably with ST criteria, classification of these positions as STs is not an option because the managerial and supervisory responsibilities cannot be ignored. Pay Band V will apply to a new category of positions designated as Senior Scientific Technical Managers (SSTM). Positions so designated will include those requiring scientific/engineering technical expertise and full managerial and supervisory authority. Their scientific/engineering technical expertise and responsibilities warrant classification above the GS-15 level. Current GS-15 positions will convert into the demonstration project at Pay Band IV. After conversion these positions will be reviewed against established criteria to determine if the positions should be reclassified to Pay Band V. Other positions possibly meeting criteria for designation as SSTM will be reviewed on a case-by-case basis. The pay range for SSTM positions is: minimum base pay is 120 percent of the minimum base pay of GS-15; maximum rate of base pay is Level IV of the Executive Schedule (EX-IV); and maximum adjusted base pay is Level III of the Executive Schedule (EX-III). Adjusted base pay is base rate plus locality or staffing supplement as appropriate. Vacant SSTM positions will be filled competitively to ensure that selectees are preeminent technical leaders in specialty fields who also possess substantial managerial and supervisory abilities. Panels will be created to assist in filling SSTM positions. Panel members typically will be SES members, ST employees and later those designated as SSTMs. In addition, General Officers and recognized technical experts from outside ECBC may also serve as appropriate. The panel will apply criteria developed largely from the OPM Research Grade Evaluation Guide for positions exceeding the GS-15 level and other OPM guidance related to positions exceeding the GS-15 level. The purpose of the panel is to ensure impartiality, breadth of technical expertise, and a rigorous and demanding review. SSTM positions will be subject to limitations imposed by DoD. SSTM positions will be established only in a STRL that employs scientists, engineers, or both. Incumbents of these positions will work primarily in their professional technical capacity on research and development and secondarily, will perform managerial or supervisory duties. The final component of Pay Band V is the management of all Pay Band V assets. Specifically, this authority will be exercised at the DA level, and includes the following: authority to classify, create, or abolish positions within the limitations imposed by DoD; recruit and reassign employees in this pay band; set pay and appraise performance under this project's pay-for-performance system. B. Classification 1. Occupational Series The present GS classification system has over 400 occupational series, which are divided into 23 occupational groupings. ECBC currently has positions in approximately 65 occupational series that fall into 16 occupational groupings. All positions listed in Appendix B will be in the classification structure. Provisions will be made for including other occupations in response to changing missions. 2. Classification Standards and Position Descriptions ECBC will use CERDEC's fully automated classification system modeled after the Navy's “China Lake” and ARL's automated systems. ARL developed a Web-based automated classification system that can create standardized, classified position descriptions under the new pay banding system in a matter of minutes. The present system of OPM classification standards will be used for the identification of proper series and occupational titles of positions within the demonstration project. Current OPM position classification standards will not be used to grade positions in this project. However, the grading criteria in those standards will be used as a framework to develop new and simplified standards for the purpose of pay band determinations. The objective is to record the essential criteria for each pay band within each occupational family by stating the characteristics of the work, the responsibilities of the position, and the competencies required. New position descriptions will replace the current DA job descriptions. The classification standard for each pay band will serve as an important component in the new position description, which will also include position-specific information, and provide data element information pertinent to the job. The computer-assisted process will produce information necessary for position descriptions. The new descriptions will be easier to prepare, minimize the amount of writing time and make the position description a more useful and accurate tool for other personnel management functions. Specialty work codes (narrative descriptions) will be used to further differentiate types of work and the competencies required for particular positions within an occupational family and pay band. Each code represents a specialization or type of work within the occupation. 3. Fair Labor Standards Act Fair Labor Standards Act (FLSA) exemption and non-exemption determinations will be consistent with criteria found in 5 CFR part 551. All employees are covered by the FLSA unless they meet the criteria for exemption. The duties and responsibilities outlined in the classification standards for each pay band will be compared to the FLSA criteria. As a general rule, the FLSA status can be matched to occupational family and pay band as indicated in Figure 2. For example, positions classified in Pay Band I of the E&S occupational family are typically nonexempt, meaning they are covered by the overtime entitlements prescribed by the FLSA. An exception to this guideline includes supervisors/managers whose primary duty meet the definitions outlined in the OPM GS Supervisory Guide. Therefore, supervisors/managers in any of the pay bands who meet the foregoing criteria are exempt from the FLSA. Supervisors with classification authority will make the determinations on a case-by-case basis by comparing assigned duties and responsibilities to the classification standards for each pay band and the 5 CFR 551 FLSA criteria. Additionally, the advice and assistance of the servicing CPAC will be obtained in making determinations. The benchmark position descriptions will not be the sole basis for the determination. Basis for exemption will be documented and attached to each position description. Exemption criteria will be narrowly construed and applied only to those employees who clearly meet the spirit of the exemption. Changes will be documented and provided to the CPAC. Figure 2—FLSA Status [Pay bands] Occupational family I II III IV V E&S N N/E E E E B&T N N/E E E GEN N N E N—Non-Exempt from FLSA; E—Exempt from FLSA. N/E—Exemption status determined on a case-by-case basis. Note: Although typical exemption status under the various pay bands is shown in the above table, actual FLSA exemption determinations are made on a case-by-case basis. 4. Classification Authority The ECBC Technical Director will have delegated classification authority and may, in turn, re-delegate this authority to appropriate levels. Position descriptions will be developed to assist managers in exercising delegated position classification authority. Managers will identify the occupational family, job series, functional code, specialty work code, pay band level, and the appropriate acquisition codes. Personnel specialists will provide ongoing consultation and guidance to managers and supervisors throughout the classification process. These decisions will be documented on the position description. 5. Classification Appeals Classification appeals under this demonstration project will be processed using the following procedures: An employee may appeal the determination of occupational family, occupational series, position title, and pay band of his/her position at any time. An employee must formally raise the area of concern to supervisors in the immediate chain of command, either verbally or in writing. If the employee is not satisfied with the supervisory response, he/she may then appeal to the DoD appellate level. Appeal decisions rendered by DoD will be final and binding on all administrative, certifying, payroll, disbursing, and accounting officials of the government. Classification appeals are not accepted on positions which exceed the equivalent of a GS-15 level. Time periods for cases processed under 5 CFR part 511 apply. An employee may not appeal the accuracy of the position description, the demonstration project classification criteria, or the pay-setting criteria; the assignment of occupational series to the occupational family; the propriety of a pay schedule; or matters grievable under an administrative or negotiated grievance procedure, or an alternative dispute resolution procedure. The evaluations of classification appeals under this demonstration project are based upon the demonstration project classification criteria. Case files will be forwarded for adjudication through the CPAC providing personnel service and will include copies of appropriate demonstration project criteria. C. Pay for Performance 1. Overview The purpose of the pay-for-performance system is to provide an effective, efficient, and flexible method for assessing, compensating, and managing the ECBC workforce. It is essential for the development of a highly productive workforce and to provide management at the lowest practical level, the authority, control, and flexibility needed to achieve a quality organization and meet mission requirements. The pay-for-performance system allows for more employee involvement in the assessment process, strives to increase communication between supervisor and employee, promotes a clear accountability of performance, facilitates employee career progression, and provides an understandable and rational basis for pay changes by linking pay and performance. The pay-for-performance system uses annual performance payouts that are based on the employee's total performance score rather than within-grade increases, quality step increases, promotions from one grade to another where both grades are now in the same pay band ( i.e., there are no within-band promotions) and performance awards. The normal rating period will be one year. The minimum rating period will be 120 days. Pay-for-performance payouts can be in the form of increases to base pay and/or in the form of bonuses that are not added to base pay but rather are given as a lump sum bonus. Other awards such as special acts, time-off awards, etc., will be retained separately from the pay-for-performance payouts. The system will have the flexibility to be modified, if necessary, as more experience is gained under the project. 2. Performance Objectives Performance objectives define a target level of activity, expressed as a tangible, measurable objective, against which actual achievement can be compared. These objectives will specifically identify what is expected of the employee during the rating period and will typically consist of three to ten results-oriented statements. The employee and his/her supervisor will jointly develop the employee's performance objectives at the beginning of the rating period. These are to be reflective of the employee's duties/responsibilities and pay band along with the mission/organizational goals and priorities. Objectives will be reviewed annually and revised upon changes in pay reflecting increased responsibilities commensurate with pay increases. Use of generic one-size-fits-all objectives will be avoided, as performance objectives are meant to define an individual's specific responsibilities and expected accomplishments. In contrast, performance elements as described in the next paragraph will identify generic performance characteristics, against which the accomplishment of objectives will be measured. As a part of this demonstration project, training focused on overall organizational objectives and the development of performance objectives will be held for both supervisors and employees. Performance objectives may be jointly modified, changed or deleted as appropriate during the rating cycle. As a general rule, performance objectives should only be changed when circumstances outside the employee's control prevent or hamper the accomplishment of the original objectives. It is also appropriate to change objectives when mission or workload shifts occur. 3. Performance Elements Performance elements define generic performance characteristics that will be used to evaluate the employee's success in accomplishing his/her performance objectives. The use of generic characteristics for scoring purposes helps to ensure comparable scores are assigned while accommodating diverse individual objectives. This pay-for-performance system will utilize those performance elements provided in Appendix C. All elements are critical. A critical performance element is defined as an attribute of job performance that is of sufficient importance that performance below the minimally acceptable level requires remedial action and may be the basis for removing an employee from his/her position. Non-critical elements will not be used. Each of the performance elements will be assigned a weight, which reflects its importance in accomplishing an individual's performance objectives. A minimum weight is set for each performance element. The sum of the weights for all of the elements must equal 100. A single set of performance elements will be used for evaluating the annual performance of all ECBC personnel covered by this plan. This set of performance elements may evolve over time, based on experience gained during each rating cycle. This evolution is essential to capture the critical characteristics the organization encourages in its workforce toward meeting individual and organizational objectives. This is particularly true in an environment where technology and work processes are changing at an increasingly rapid pace. The ECBC Personnel Management Board will annually review the set of performance elements and set them for the entire organization before the beginning of the rating period. The following is an initial set of performance elements along with their minimum weight: (1) Technical Competence (Minimum Weight: 15%). (2) Interpersonal Skills (Minimum Weight: 10%). (3) Management of Time and Resources (Minimum Weight: 15%). (4) Customer Satisfaction (Minimum Weight: 10%). (5) Team/Project Leadership (Minimum Weight: 15%). (6) Supervision/Equal Employment Opportunity (EEO) (Minimum Weight: 25%). All employees will be rated against the first four performance elements. Team/Project Leadership is mandatory for team leaders (within this document “team leader” refers to non-supervisory team leaders as determined by the OPM GS Leader Grade Evaluation Guide). Supervision/EEO is mandatory for all managers/supervisors. At the beginning of the rating period, pay pool managers will review the objectives and weights assigned to employees within the pay pool, to verify consistency and appropriateness. 4. Performance Feedback and Formal Ratings The most effective means of communication is person-to-person discussion between supervisors and employees of requirements, performance goals and desired results. Employees and supervisors alike are expected to actively participate in these discussions for optimum 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 discussions will vary based on the nature of work performed, but will occur at least at the mid-point and end of the rating period. The supervisor and employee will discuss job performance and accomplishments in relation to the performance objectives and elements. At least one review, normally the mid-point review, will be documented as a formal progress review. More frequent, task specific, discussions may be appropriate in some organizations. In cases where work is accomplished by a team, team discussions regarding goals and expectations will be appropriate. The employee will provide a list of his/her accomplishments to the supervisor at both the mid-point and end of the rating period. An employee may elect to provide self-ratings on the performance elements and/or solicit input from team members, customers, peers, supervisors in other units, subordinates, and other sources which will permit the supervisor to fully evaluate accomplishments during the rating period. At the end of the rating period, following a review of the employee's accomplishments, the supervisor will rate each of the performance elements by assigning a score between 0 and 50. Benchmark performance standards have been developed that describe the level of performance associated with a score. Using these benchmarks, the supervisor decides where (at any point on a scale of 0 to 50) the performance of the employee fits and assigns an appropriate score. It should be noted that these scores are not discussed with the employee or considered final until all scores are reconciled and approved by the pay pool manager. The element scores will then be multiplied by the element-weighting factor to determine the weighted score expressed to two decimal points. The weighted scores for each element will then be totaled to determine the employee's overall appraisal score and rounded to a whole number as follows: if the digit to the right of the decimal is between five and nine, it should be rounded to the next higher whole number; if the digit to the right of the decimal is between one and four, it should be dropped. A total score of 10 or above will result in a rating of acceptable. A total score of 9 or below will result in a rating of unacceptable, and requires the employee be placed on a Performance Improvement Plan (PIP) immediately or following a temporary assignment. A score of 9 or below in a single element will also result in a rating of unacceptable, and requires the employee be placed on a PIP. A new rating of record will be issued if the employee's performance improves to an acceptable level at the conclusion of the PIP. 5. Unacceptable Performance Informal employee performance reviews will be a continuous process so that corrective action, to include placing an employee on a PIP, may be taken at any time during the rating cycle. Whenever a supervisor recognizes an employee's performance on one or more performance elements is unacceptable, the supervisor should immediately inform the employee. Efforts will be made to identify the possible reasons for the unacceptable performance. An employee who is on a PIP is not eligible to receive the general pay increase (refer to III.C.13.). As an informal first step, the supervisor and employee may explore a temporary assignment to another unit in the organization. This recognizes that conflicts sometimes occur between a supervisor and an employee, or that an employee may be assigned to a position for which he/she is not suited. The supervisor is under no obligation to explore this option prior to taking more formal action. If the temporary assignment is not possible or has not worked out, and the employee continues to perform at an unacceptable level or has received an unacceptable rating, written notification outlining the unacceptable performance will be provided to the employee. At this point an opportunity to improve will be structured in a PIP. The supervisor will identify the items/actions that need to be corrected or improved, outline required time frames (no less than 30 days) for such improvement, and provide the employee with any available assistance as appropriate. Progress will be monitored during the PIP, and all counseling sessions will be documented. If the employee's performance is acceptable at the conclusion of the PIP, no further action is necessary. If a PIP ends prior to the end of the annual performance cycle and the employee's performance improves to an acceptable level, the employee is appraised again at the end of the annual performance cycle. If the employee fails to improve during the PIP, the employee will be given notice of proposed appropriate action. This action can include removal from the Federal service, placement in a lower pay band with a corresponding reduction in pay (demotion), reduction in pay within the same pay band, or change in position or occupational family. For the most part, employees with an unacceptable rating will not be permitted to remain at their current pay and may be reduced in pay band. Reductions in base pay within the same pay band or changes to a lower pay band will be accomplished with a minimum of a five-percent decrease in an employee's base pay. Note: Nothing in this subsection will preclude action under 5 U.S.C. chapter 75, when appropriate. All relevant documentation concerning a reduction in pay or removal based on unacceptable performance will be preserved and made available for review by the affected employee or a designated representative. As a minimum, the record will consist of a copy of the notice of proposed personnel action, the employee's written reply, if provided, or a summary when the employee makes an oral reply. Additionally, the record will contain the written notice of decision and the reasons therefore along with any supporting material (including documentation regarding the opportunity afforded the employee to demonstrate improved performance). If the employee's performance deteriorates to an unacceptable level, in any element, within two years from the beginning of a PIP, follow-on actions may be initiated with no additional opportunity to improve. If an employee's performance is at an acceptable level for two years from the beginning of the PIP, and performance once again declines to an unacceptable level, the employee will be given an additional opportunity to improve, before management proposes follow-on actions. 6. Reconciliation Process Following the initial scoring of each employee by the rater, the rating officials in an organizational unit, along with their next level of supervision, will meet to ensure consistency and equity of the ratings. In this step, each employee's performance objectives, accomplishments, preliminary scores and pay are compared. Through discussion and consensus building, consistent and equitable ratings are reached. Managers will not prescribe a distribution of total scores. The pay pool manager will then chair a final review with the rating officials who report directly to him or her to validate these ratings and resolve any scoring issues. If consensus cannot be reached in this process, the pay pool manager makes all final decisions. After this reconciliation process is complete, scores are finalized. Payouts proceed according to each employee's final score and adjusted base pay. Upon approval of this plan, implementing procedures and regulations will provide details on this process to employees and supervisors. 7. Pay Pools ECBC employees will be placed into pay pools. Pay pools are combinations of organizational elements ( e.g., Directorates, Divisions, Branches, Teams, etc. ) that are defined for the purpose of determining performance payouts under the pay-for-performance system. The guidelines in the next paragraph are provided for determining pay pools. These guidelines will normally be followed. However, the ECBC Technical Director may deviate from the guidelines if there is a compelling need to do so and document their rationale in writing. The ECBC Technical Director will establish pay pools. Typically, pay pools will have between 35 and 300 employees. A pay pool should be large enough to encompass a reasonable distribution of ratings but not so large as to compromise rating consistency. Supervisory personnel will be placed in a pay pool separate from subordinate non-supervisory personnel. Team leaders classified by the GS Leader Grade Evaluation Guide will be included in a supervisory pay pool. Those team leaders who have project responsibility but who do not actually lead other workers will be included in a non-supervisory pay pool. Neither the pay pool manager nor supervisors within a pay pool will recommend or set their own individual pay. Decisions regarding the amount of the performance payout are based on the established formal payout calculations. Funds within a pay pool available for performance payouts are calculated from anticipated pay increases under the existing system and divided into two components, base pay and bonus. The funds within a pay pool used for base pay increases, are those that would have been available from within-grade increases, quality step increases and promotions (excluding the costs of promotions still provided under the banding system). This amount will be defined based on historical data and will be set at no less than two percent of total adjusted base pay annually. The funds available to be used for bonus payouts are funded separately within the constraints of the organization's overall award budget. This amount will be defined based on historical data and at no less than one percent of total adjusted base pay annually. The sum of these two factors is referred to as the pay pool percentage factor. The ECBC Personnel Management Board will annually review the pay pool funding and recommend adjustments to the ECBC Technical Director to ensure cost discipline over the life of the demonstration project. Cost discipline is assured within each pay pool by limiting the total base pay increase to the funds available, based on what would have been available in the GS system from within-grade increases, quality step increases and within-band promotions. The ECBC Technical Director may reallocate the amount of funds assigned to each pay pool as necessary to ensure equity and to meet unusual circumstances. 8. Performance Payout Determination The performance payout an employee will receive is based on the total performance score from the pay-for-performance assessment process. An employee will receive a performance payout as a percentage of adjusted base pay. This percentage is based on the number of shares that equates to their final appraisal score. Shares will be awarded on a continuum as follows: Score = Shares 50 = 3 40 = 2 30 = 1 21 = .1 10 - 20 = 0 < = 9 = 0 (Performance Improvement Plan required). Fractional shares will be awarded for scores that fall in between these scores. For example: A score of 38 will equate to 1.8 shares, and a score of 44 will equate to 2.4 shares. The value of a share cannot be exactly determined until the rating and reconciliation process is completed and all scores are finalized. The share value is expressed as a percentage. The formula that computes the value of each share uses base pay rates and is based on (1) the sum of the base pay of all employees in the pay pool times the pay pool percentage factor, (2) the employee's base pay, (3) the number of shares awarded to each employee in the pay pool, and (4) the total number of shares awarded in the pay pool. This formula assures that each employee within the pool receives a share amount equal to all others in the same pool who are at the same rate of base pay and receiving the same score. The formula is shown in Figure 3. Figure 3. Formula EN29DE09.002 An individual payout is calculated by first multiplying the shares earned by the share value and multiplying that product by base pay. An adjustment is then made to account for locality pay or staffing supplement. A pay pool manager is accountable for staying within pay pool limits. The pay pool manager makes final decisions on base pay increases and/or bonuses to individuals based on rater recommendation, the final score, the pay pool funds available, and the employee's pay. 9. Base Pay Increases and Bonuses The amount of money available for performance payouts is divided into two components, base pay increases and bonuses. The base pay and bonus funds are based on the pay pool funding formula established annually. Once the individual performance amounts have been determined, the next step is to determine what portion of each payout will be in the form of a base pay increase as opposed to a bonus payment. The payouts made to employees from the pay pool may be a mix of base pay and bonus, such that all of the allocated funds are disbursed as intended. To continue to provide performance incentives while also ensuring cost discipline, base pay increases may be limited or capped. Certain employees will not be able to receive the projected base pay increase due to base pay caps. Base pay is capped when an employee reaches the maximum rate of base pay in an assigned pay band, when the mid-point rule applies ( see below) or when the Significant Accomplishment/Contribution rule applies ( see below). Also, for employees receiving retained rates above the applicable pay band maximum, the entire performance payout will be in the form of a bonus payment. When capped, the total payout an employee receives will be in the form of a bonus versus the combination of base pay and bonus. Bonuses are cash payments and are not part of the base pay for any purpose ( e.g., lump sum payments of annual leave on separation, life insurance, and retirement). The maximum base pay rate under this demonstration project will be the unadjusted base pay rate of GS-15/step 10, except for employees in Pay Band V of the E&S occupational family. In this case, the pay range is as noted in III.A.3. If the organization determines it is appropriate, it may re-allocate a portion (up to the maximum possible amount) of the unexpended base pay funds for capped employees to uncapped employees. This re-allocation will be determined by the pay pool manager. Any dollar increase in an employee's projected base pay increase will be offset, dollar for dollar, by an accompanying reduction in the employee's projected bonus payment. Thus, the employee's total performance payout is unchanged. In addition, a pay pool manager may request approval from the Personnel Management Board for use of an Extraordinary Achievement Recognition. Such recognition grants a base pay increase and/or bonus to an employee that is higher than the one generated by the compensation formula for that employee. Examples that might warrant consideration are extraordinary achievements or accelerated compensation for a local intern. The funds available for an Extraordinary Achievement Recognition are separately funded within the constraints of the organization's budget. 10. Mid-Point Rule To provide added performance incentives as an employee progresses through a pay band, a mid-point rule will be used to determine base pay increases. The mid-point rule dictates that any employee must receive a score of 30 or higher for his/her base pay to cross the mid-point of the base pay range for his/her pay band. Also, once an employee's base pay exceeds the mid-point, the employee must receive a score of 30 or higher to receive any additional base pay increases. Any amount of an employee's performance payout, not paid in the form of a base pay increase because of the mid-point rule, will be paid as a bonus. This rule effectively raises the standard of performance expected of an employee once the mid-point of a band is crossed. This applies to all employees in every occupational family and pay band. 11. Significant Accomplishment/Contribution Rule The purpose of this rule is to maintain cost discipline while ensuring that employee payouts are in consonance with accomplishments and levels of responsibility. The rule will apply only to employees in E&S Pay Band III whose base pay falls within the top 15 percent of the band. For employees meeting these criteria, the following provisions will apply: (1) If an employee's score falls in the top third of scores received in his/her pay pool, he/she will receive the full allowable base pay increase portion of the performance payout. The balance of the payout will be paid as a lump sum bonus. (2) If an employee's score falls in the middle third of scores received in his/her pay pool, the base pay increase portion will not exceed one percent of base pay. The balance of the payout will be paid as a lump sum bonus. (3) If an employee's appraisal score falls in the bottom third of scores received in his/her pay pool, the full payout will be paid as a lump sum bonus. 12. Awards To provide additional flexibility in motivating and rewarding individuals and groups, some portion of the performance award budget will be reserved for special acts and other categories as they occur. Awards may include, but are not limited to, special acts, patents, suggestions, on-the-spot, and time-off. The funds available to be used for traditional 5 U.S.C. awards are separately funded within the constraints of the organization's budget. While not directly linked to the pay-for-performance system, this additional flexibility is important to encourage outstanding accomplishments and innovation in accomplishing the diverse mission of ECBC. Additionally, to foster and encourage teamwork among its employees, organizations may give group awards. Under the demonstration project, a team may elect to distribute such awards among themselves. Thus, a team leader or supervisor may allocate a sum of money to a team for outstanding performance, and the team may decide the individual distribution of the total dollars among themselves. The Commanding General, RDECOM will have the authority to grant special act awards to covered employees of up to $10,000 IAW the criteria of AR 672-20, Incentive Awards. This authority may be delegated to the Technical Director, ECBC. 13. General Pay Increase Employees, who are on a PIP at the time pay determinations are made, do not receive performance payouts or the annual general pay increase. An employee who receives an unacceptable rating of record will not receive any portion of the general pay increase or RIF service credit until such time as his/her performance improves to the acceptable level and remains acceptable for at least 90 days. When the employee has performed acceptably for at least 90 days, the general pay increase will not be retroactive but will be granted at the beginning of the next pay period after the supervisor authorizes its payment. These actions may result in a base pay that is identified in a lower pay band. This occurs because the minimum rate of base pay in a pay band increases as the result of the general pay increase (5 U.S.C. 5303). This situation (a reduction in band level with no reduction in pay) will not be considered an adverse action, nor will band retention provisions apply. 14. Reverse Feedback Employee feedback to supervisors is considered essential for the success of the pay-for-performance system. A feedback instrument for subordinates to anonymously evaluate the effectiveness of their supervisors is being developed and shall be implemented as part of the demonstration project. Supervisors and their managers will be provided the results of that feedback in a format that does not identify individual raters or ratings. The data will be aggregated into a summary and used to establish both personal and organizational performance development goals. The use of this type of instrument 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. 15. Grievances An employee may grieve the performance rating/score received under the pay-for-performance system. Non-bargaining unit employees, and bargaining unit employees covered by a negotiated grievance procedure that does not permit grievances over performance ratings, must file under administrative grievance procedures. Bargaining unit employees whose negotiated grievance procedures cover performance rating grievances must file under those negotiated procedures. 16. Adverse Actions Except where specifically waived or modified in this plan, adverse action procedures under 5 CFR part 752 remain unchanged. D. Hiring Authority 1. Qualifications The qualifications required for placement into a position in a pay band within an occupational family will be determined using the OPM Operating Manual for Qualification Standards for GS Positions. Since the pay bands are anchored to the GS grade levels, the minimum qualification requirements for a position will be the requirements corresponding to the lowest GS grade incorporated into that pay band. For example, for a position in the E&S occupational family, Pay Band II individuals must meet the basic requirements for a GS-5 as specified in the OPM Qualification Standard for Professional and Scientific Positions. Selective factors may be established for a position in accordance with the OPM Qualification Standards Operating Manual, when determined to be critical to successful job performance. These factors will become part of the minimum requirements for the position, and applicants must meet them in order to be eligible. If used, selective factors will be stated as part of the qualification requirements in vacancy announcements and recruiting bulletins. 2. Delegated Examining Competitive service positions will be filled through Merit Staffing and through direct-hire authority or under Delegated Examining. Recent legislative changes provide for delegation of direct-hire authority for shortage category positions under the Defense Acquisition Workforce Improvement Act (DAWIA) at certain levels as well as direct hire authority for qualified candidates with an advanced degree to scientific and engineering positions within 5 U.S.C. 9902(c)(2) STRL laboratories as redesignated under section 1105 of Public Law 111-84. Where delegated to the laboratory level, direct-hire authority will be exercised in accordance with the requirements of the delegation of authority. The “Rule of Three” will be eliminated. When there are no more than 15 qualified applicants and no preference eligibles, all eligible applicants are immediately referred to the selecting official without rating and ranking. Rating and ranking will be required only when the number of qualified candidates exceeds 15 or there is a mix of preference and non-preference applicants. Statutes and regulations covering veterans' preference will be observed in the selection process and when rating and ranking are required. If the candidates are rated and ranked, a random number selection method will be used to determine which applicants will be referred when scores are tied after the rating process. Veterans will be referred ahead of non-veterans with the same score. 3. Legal Authority For actions taken under the auspices of the demonstration project, the legal authority, Public Law 103-337, as amended, will be used. For all other actions, the nature of action codes and legal authority codes prescribed by OPM, DoD, or DA will continue to be used. 4. Revisions to Term Appointments ECBC conducts a variety of projects that range from three to six years. The current four-year limitation on term appointments often forces the termination of term employees prior to completion of projects they were hired to support. This disrupts the research and development process and affects the organization's ability to accomplish the mission and serve its customers. ECBC will continue to have career and career-conditional appointments and temporary appointments not to exceed one year. These appointments will use existing authorities and entitlements. Under the demonstration project, ECBC will have the added authority to hire individuals under a modified term appointment. These appointments will be used to fill positions for a period of more than one year, but not more than a total of five years when the need for an employee's services is not permanent. The modified term appointments differ from term employment as described in 5 CFR 316 in that they may be made for a period not to exceed five, rather than four years. The Technical Director is authorized to extend a term appointment one additional year. Employees hired under the modified term appointment authority are in a non-permanent status, but may be eligible for conversion to career-conditional appointments. To be converted, the employee must (1) have been selected for the term position under competitive procedures, with the announcement specifically stating that the individual(s) selected for the term position may be eligible for conversion to a career-conditional appointment at a later date; (2) have served two years of continuous service in the term position; (3) be selected under merit promotion procedures for the permanent position; and (4) be performing at the acceptable level of performance with a current score of 30 or greater. Employees serving under regular term appointments at the time of conversion to the demonstration project will be converted to the new modified term appointments provided they were hired for their current positions under competitive procedures. These employees will be eligible for conversion to career-conditional appointments if they (1) have served two years of continuous service in the term position; (2) are selected under merit promotion procedures for the permanent position; and (3) are performing at the acceptable level of performance with a current score of 30 or greater (or equivalent if not yet rated under the demonstration project). Time served in term positions prior to conversion to the modified term appointment is creditable, provided the service was continuous. Employees serving under regular or modified term appointments under this plan will be covered by the plan's pay-for-performance system. 5. Extended Probationary Period The current one-year probationary period will be extended to three years for all newly hired permanent career-conditional employees in the E&S occupational family. The purpose of extending the probationary period is to allow supervisors an adequate period of time to fully evaluate an employee's ability to complete a cycle of work and to fully assess an employee's contribution and conduct. The three-year probationary period will apply only to new hires subject to a probationary period. If a probationary employee's performance is determined to be satisfactory at a point prior to the end of the three-year probationary period, a supervisor has the option of ending the probationary period at an earlier date, but not before the employee has completed one year of continuous service. If the probationary period is terminated before the end of the three-year period, the immediate supervisor will provide written reasons for his/her decision to the next level of supervision for concurrence prior to implementing the action. Aside from extending the time period for all newly hired permanent career-conditional employees in the E&S occupational family, all other features of the current probationary period are retained including the potential to remove an employee without providing the full substantive and procedural rights afforded a non-probationary employee. Any employee appointed prior to the implementation date will not be affected. 6. Termination of Probationary Employees Probationary employees may be terminated when they fail to demonstrate proper conduct, technical competency, and/or acceptable performance for continued employment, and for conditions arising before employment. When a supervisor decides to terminate an employee during the probationary period because his/her work performance or conduct is unacceptable, the supervisor shall terminate the employee's services by written notification stating the reasons for termination and the effective date of the action. The information in the notice shall, at a minimum, consist of the supervisor's conclusions as to the inadequacies of the employee's performance or conduct, or those conditions arising before employment that support the termination. 7. Supervisory Probationary Periods Supervisory probationary periods will be made consistent with 5 CFR part 315. Employees who have successfully completed the initial probationary period will be required to complete an additional one-year probationary period for initial appointment to a supervisory position. If, during this probationary period, the decision is made to return the employee to a non-supervisory position for reasons related to supervisory performance, the employee will be returned to a comparable position of no lower pay than the position from which promoted or reassigned. 8. Volunteer Emeritus Corps Under the demonstration project, the ECBC Director will have the authority to offer retired or separated employees voluntary positions. The ECBC Director may re-delegate this authority. Voluntary Emeritus Corps assignments are not considered employment by the Federal government (except for purposes of injury compensation). Thus, such assignments do not affect an employee's entitlement to buyouts or severance payments based on an earlier separation from Federal service. The volunteer's Federal retirement pay (whether military or civilian) is not affected while serving in a voluntary capacity. Retired or separated Federal employees may accept an emeritus position without a break or mandatory waiting period. The Voluntary Emeritus Corps will ensure continued quality services while reducing the overall salary line by allowing higher paid employees to accept retirement incentives with the opportunity to retain a presence in the ECBC community. The program will be beneficial during manpower reductions, as employees accept retirement and return to provide a continuing source of corporate knowledge and valuable on-the-job training or mentoring to less experienced employees. To be accepted into the Voluntary Emeritus Corps, a volunteer must be recommended by an ECBC manager to the Director or delegated authority. Not everyone who applies is entitled to an emeritus position. The responsible official will document acceptance or rejection of the applicant. For acceptance, documentation must be retained throughout the assignment. For rejection, documentation will be maintained for two years. Voluntary Emeritus Corps volunteers will not be permitted to monitor contracts on behalf of the Government or to participate on any contracts or solicitations where a conflict of interest exists. The volunteers may be required to submit a financial disclosure form annually. The same rules that currently apply to source selection members will apply to volunteers. An agreement will be established among the volunteer, the responsible official and the CPAC. The agreement must be finalized before the assumption of duties and shall include: (1) A statement that the voluntary assignment does not constitute an appointment in the Civil Service, is without compensation, and the volunteer waives any claims against the Government based on the voluntary assignment; (2) A statement that the volunteer will be considered a Federal employee only for the purpose of injury compensation; (3) The volunteer's work schedule; (4) Length of agreement (defined by length of project or time defined by weeks, months, or years); (5) Support provided by the organization (travel, administrative support, office space, and supplies); (6) A statement of duties; (7) A statement providing that no additional time will be added to a volunteer's service credit for such purposes as retirement, severance pay, and leave as a result of being a volunteer; (8) A provision allowing either party to void the agreement with two working days written notice; (9) The level of security access required by the volunteer (any security clearance required by the position will be managed by the employing organization); (10) A provision that any publication(s) resulting from his/her work will be submitted to the ECBC Technical Director for review and approval; (11) A statement that he/she accepts accountability for loss or damage to Government property occasioned by his/her negligence or willful action; (12) A statement that his/her activities on the premises will conform to the regulations and requirements of the organization; (13) A statement that he/she will not release any sensitive or proprietary information without the written approval of the employing organization and further agrees to execute additional non-disclosure agreements as appropriate, if required, by the nature of the anticipated services; and, (14) A statement that he/she agrees to disclose any inventions made in the course of work performed at ECBC. The ECBC Technical Director has the option to obtain title to any such invention on behalf of the U.S. Government. Should the ECBC Technical Director elect not to take title, the ECBC shall at a minimum retain a non-exclusive, irrevocable, paid up, royalty-free license to practice or have practiced the invention worldwide on behalf of the U.S. Government. Exceptions to the provisions in this procedure may be granted by the ECBC Technical Director on a case-by-case basis. E. Internal Placement 1. Promotion A promotion is the movement of an employee to a higher pay band in the same occupational family or to another pay band in a different occupational family, wherein the band in the new family has a higher maximum base pay than the band from which the employee is moving. The move from one band to another must result in an increase in the employee's base pay to be considered a promotion. Positions with known promotion potential to a specific band within an occupational family will be identified when they are filled. Not all positions in an occupational family will have promotion potential to the same band. Movement from one occupational family to another will depend upon individual competencies, qualifications and the needs of the organization. Supervisors may consider promoting employees at any time, since promotions are not tied to the pay-for-performance system. Progression within a pay band is based upon performance base pay increases; as such, these actions are not considered promotions and are not subject to the provisions of this section. Except as specified below, promotions will be processed under competitive procedures in accordance with Merit System Principles and requirements of the local merit promotion plan. To be promoted competitively or non-competitively from one band to the next, an employee must meet the minimum qualifications for the job and have a current performance rating of “acceptable” with a score of 21 or better, or equivalent under a different performance appraisal system. If an employee does not have a current performance rating, the employee will be treated the same as an employee with an “acceptable” rating as long as there is no documented evidence of unacceptable performance. 2. Reassignment A reassignment is the movement of an employee from one position to a different position within the same occupational family and pay band or to another occupational family and pay band wherein the band in the new family has the same maximum base pay. The employee must meet the qualifications requirements for the occupational family and pay band. 3. Demotion or Placement in a Lower Pay Band A demotion is a placement of an employee into a lower pay band within the same occupational family or placement into a pay band in a different occupational family with a lower maximum base pay. Demotions may be for cause (performance or conduct) or for reasons other than cause ( e.g., erosion of duties, reclassification of duties to a lower pay band, application under competitive announcements or at the employee's request, or placement actions resulting from RIF procedures). 4. Simplified Assignment Process Today's environment of downsizing and workforce fluctuations mandates that the organization have maximum flexibility to assign duties and responsibilities to individuals. Pay banding can be used to address this need, as it enables the organization to have maximum flexibility to assign an employee with no change in base pay, within broad descriptions, consistent with the needs of the organization and the individual's qualifications and level. Subsequent assignments to projects, tasks, or functions anywhere within the organization requiring the same level, area of expertise, and qualifications would not constitute an assignment outside the scope or coverage of the current position description. For instance, a technical expert could 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 broader latitude in assignments and further streamlines the administrative process and system. 5. Details Under this plan employees may be detailed to a position in the same band (requiring a different level of expertise and qualifications) or lower pay band (or its equivalent in a different occupational family) for up to one year. Details may be implemented through an official personnel action to cover the one-year period. Details to a position in a higher pay band up to 180 days will be made non-competitively. Beyond 180 days requires competitive procedures. 6. Exceptions to Competitive Procedures The following actions are excepted from competitive procedures: (1) Re-promotion to a position which is in the same pay band or GS equivalent and occupational family as the employee previously held on a permanent basis within the competitive service. (2) Promotion, reassignment, demotion, transfer or reinstatement to a position having promotion potential no greater than the potential of a position an employee currently holds or previously held on a permanent basis in the competitive service. (3) A position change permitted by reduction-in-force procedures. (4) Promotion without current competition when the employee was appointed through competitive procedures to a position with a documented career ladder. (5) A temporary promotion, or detail to a position [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3AE9-30479. Public record. Not legal advice.