[Federal Register: February 28, 2007 (Volume 72, Number 39)]
[Notices]
[Page 9037-9050]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28fe07-102]
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OFFICE OF PERSONNEL MANAGEMENT
Proposed Demonstration Project; Pay Banding and Performance-Based
Pay Adjustments in the National Nuclear Security Administration
ACTION: Notice of a proposed demonstration project plan.
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SUMMARY: Chapter 47 of title 5, United States Code, authorizes the
Office of Personnel Management (OPM), directly or in agreement with one
or more agencies, to conduct demonstration projects that experiment
with new and different human resources management concepts to determine
whether changes in human resources policy or procedures would result in
improved Federal human resources management. The National Nuclear
Security Administration (NNSA) and OPM propose to test a pay banding
system in which within-band pay progression is
[[Page 9038]]
based on performance. Section 4703 of title 5 requires OPM to publish
the proposed project plan in the Federal Register. This notice fulfills
that requirement. The proposed project plan has been approved by NNSA,
the Department of Energy, and OPM.
DATES: Written comments must be submitted on or before March 30, 2007.
A public hearing is scheduled for Wednesday, April 4, 2007, from 10
a.m. to 5 p.m., Eastern Standard Time. The location of the hearing is:
U.S. Department of Energy, Forrestal Building, 1000 Independence
Avenue, SW., Washington, DC 20585.
Public parking is limited, but the building is conveniently
accessible to the ``Smithsonian'' and ``L'Enfant'' Metro stations. The
Forrestal Building is a secure facility. Members of the public must
show a government-issued photo ID (e.g., State driver's license).
Attendees will undergo electronic screening, and their personal
belongings will be subject to a physical search. Personal items
prohibited in the Forrestal Building include devices that can transmit
and record, weapons (guns, knives, explosives, etc.), and alcohol. A
member of the public possessing such items will be barred from
entering, and such items are subject to confiscation. There will be a
sign-in table set up in the main lobby. A greeter, and signs, will
direct attendees to the main auditorium location.
There will be a telephone call-in number for members of the public
who cannot attend in person. That number will be 202-287-5323, and the
line will be active from 10 a.m. to 5 p.m., Eastern Standard Time.
At the time of the hearing, interested persons or organizations may
present their written or oral comments on the proposed demonstration
project. The hearing will be informal. However, anyone wishing to
testify should contact the person listed under FOR FURTHER INFORMATION
CONTACT, so that NNSA and OPM can plan the hearing and provide
sufficient time for all interested persons and organizations to be
heard. Priority will be given to those on the schedule, with others
speaking in any remaining available time. Each speaker's presentation
will be limited to 10 minutes. Written comments may be submitted to
supplement oral testimony during the public comment period.
ADDRESSES: Comments may be mailed to Demonstration Projects, U.S.
Office of Personnel Management, 1900 E Street, NW., Room 7677,
Washington, DC 20415 or submitted by e-mail to Demoprojects@opm.gov.
FOR FURTHER INFORMATION CONTACT: National Nuclear Security
Administration: Randy Mazzeo, NNSA Assistant HR Director for Policy &
Workforce Planning, (301) 903-5192, 19901 Germantown Road, NA-64, Room
F-115, Germantown, MD 20874. Office of Personnel Management: Patsy
Stevens, Systems Innovation Group Manager, U.S. Office of Personnel
Management, (202) 606-1258, 1900 E Street, NW., Room 7456, Washington,
DC 20415.
SUPPLEMENTARY INFORMATION: The goals of this demonstration project are
to--
(1) Improve hiring by allowing NNSA to compete more effectively for
high quality employees through the judicious use of higher entry
salaries;
(2) Motivate and retain staff by providing faster pay progression
for high-performing employees;
(3) Improve the usefulness and responsiveness of the position
classification system to managers;
(4) Increase the proficiency of administering the position
classification system through a simplified pay-banded application of
the current General Schedule grade structure, and reduce the procedural
steps and documentation requirements traditionally associated with
classifying positions;
(5) Eliminate automatic pay increases (i.e., annual adjustments
that normally take effect the first day of the first pay period
beginning on or after January 1) by making pay increases performance-
sensitive, so that only Fully Successful (known as ``Fully Meets
Expectations'' in NNSA) and higher performers will receive pay
adjustments, and the best performers will receive the largest pay
adjustments;
(6) Integrate with, build upon, and advance the work of several key
human capital management improvement initiatives and projects currently
underway in NNSA, including--
a. Advancing the ongoing refinement of NNSA's three-year old
enterprise-wide performance management program, which currently
features a pilot for automating yearly performance ratings, to the next
logical level, encompassing performance-based pay adjustments,
b. Achieving greater parity, though not complete harmony, with
NNSA's mature excepted service pay-banded and pay-for-performance
system (e.g., will have a lower high-end pay band; no automatic pay
increases, etc.),
c. Building on the simplified position description (PD) format and
automated PD library that are already in place,
d. Continuing to develop improved performance management skills
among first-line supervisors through increased program rigor,
additional training, and better guidance materials, to better develop
standards that reflect differences in performance,
e. Developing an automated position classification and position
control system,
f. Establishing a system of career-enhancing career paths for the
purpose of developing, advancing, and retaining employees,
g. Building on the new workforce analysis and planning system,
already in place to identify FTE needs and competency needs and skills
gaps, to conduct a valid occupational analysis to construct meaningful
pay bands,
h. Using a total workforce management approach to controlling
costs, not just spending caps and share formulas; i.e., cultivating a
managerial culture of accountability in taking and directing personnel
actions, fostering judicious yearly employee ratings and prudent
performance payouts, and instilling position management discipline.
Office of Personnel Management.
Linda M. Springer,
Director.
Table of Contents
I. Executive Summary
II. Introduction
A. Purposes and Approach
B. Problems With the Present System
C. Changes Required/Expected Benefits
D. Participating Organizations
E. Participating Employees
F. Project Design
III. Personnel System Changes
A. Pay Banding Classification and Pay System
1. Establishment of Career Paths and Pay Bands
2. Position Classification
3. Minimum Qualifications Requirements
4. Elimination of Fixed Steps
5. Rate Range
6. Rate of Basic Pay Upon Initial Appointment
7. Rate of Basic Pay Upon Promotion
8. Rate of Basic Pay in Noncompetitive Lateral Actions
9. Other Pay Administration Provisions
10. Staffing Supplements
B. Performance Appraisal
1. Program Requirements
2. Supervisory Accountability
3. Reconsideration of Ratings
C. Performance-Based Pay Adjustments
1. Pay Pools
2. Performance Shares
3. Pay Adjustments
4. Employees Who Do Not Receive a Pay Adjustment
5. Locality Pay and Staffing Supplement
D. Reduction-in-Force
IV. Training
V. Conversion
A. Conversion to the Demonstration Project
[[Page 9039]]
B. Conversion Back to the General Schedule System
VI. Project Duration
VII. Project Evaluation
VIII. Costs
IX. Waiver of Laws and Regulations Required
A. Title 5, United States Code
B. Title 5, Code of Federal Regulations
I. Executive Summary
This project was designed by NNSA in consultation with OPM. The
demonstration project will modify the General Schedule classification
and pay system by identifying several broad career paths, establishing
pay bands which may cover more than one grade in each career path,
eliminating longevity-based step progression, and providing for annual
pay adjustments based on performance. The proposed project will test
(1) the effectiveness of multi-grade pay bands in recruiting,
advancing, and retaining employees, and in reducing the processing time
and paperwork traditionally associated with classifying positions at
multiple grade levels, and (2) the application of meaningful
distinctions in levels of performance to the allocation of annual pay
increases under the General Schedule.
II. Introduction
A. Purposes and Approach
The purposes of the proposed project are to--
(1) Modify the General Schedule (GS) classification system by
establishing pay bands which may cover more than one grade; and
(2) Modify the GS pay system to provide larger annual pay increases
to employees who are better performers based on performance
distinctions made under a credible, strategically-aligned performance
appraisal system/program and thereby improve the results-oriented
performance culture within the organization.
NNSA's approach to achieving these purposes is to integrate with
and build upon the several ongoing human capital management initiatives
and projects that are already underway, and to design a GS pay banding
and performance-based pay adjustment system that--
(1) Complements and increases parity with the statutory NNSA
excepted service employment system, already in place, and
(2) Profits from the successes, mistakes, and lessons of other
agency demonstration projects, past and current.
B. Problems With the Present System
Position Classification Rigidity, Incomprehensibility, and Procedural
Excesses
Although the GS classification system is not a compensation system
per se, the classification and pay systems are inextricably
intertwined. In practice, the GS classification system is the primary
determinant of an employee's basic pay. Furthermore, NNSA believes in
the principles underlying the GS classification system (i.e., equal pay
for substantially equal work, and variations in pay based on the
actuality of work performed, rather than on who performs the work) and
believes that these principles are as valid and applicable to the
Federal civil service system today as when originally enacted into law
in 1923, and when the General Schedule was established in 1949. As
Ismar Baruch wrote in a classic groundbreaking 1941 report, Position
Classification in the Public Service:
`` * * * the very nature of governmental jurisdictions places
them in a position of peculiar responsibility to the public at
large. Individual actions without plan or system and based merely
upon the expediency of the moment are undesirable. Public personnel
policies and transactions affecting positions and employees should
be supportable by facts and logic in the light of broad
considerations applicable to the service as a whole. Further, in the
management of public personnel affairs, considerations of fairness
and equity require uniform action under like circumstances,
particularly in the establishment of pay rates.''
This in essence is what the Federal position classification system was
designed to achieve, and has achieved in principle, if not practice,
ever since these words were first written. Thus, rather than
``scrapping'' the current GS classification system and starting over,
NNSA believes that modifying the system to accommodate the work and
workforce of the 21st century is a more prudent and workable approach.
Pay banding does this. The current GS classification system is
cumbersome, labor intensive, and difficult to comprehend. As OPM's
April 2002 white paper, A Fresh Start for Federal Pay: The Case for
Modernization points out, the GS classification system was designed
during the World War II years when civil servants were predominantly
``process-obsessed'' file clerks. Public servants in the middle of the
20th century performed work that tended to be mechanical and repetitive
in nature, consisting of job tasks readily observable and measurable.
Today, work tends to be knowledge-based and highly specialized, and
does not lend itself to easy categorization based on readily observable
characteristics. Nonetheless, as an employee progresses from the entry
level to the full-performance level in a given occupation today, under
the traditional classification system, a separate position description
is still required for each grade. For example, an entry level GS-5
Engineer with promotion potential to GS-12 requires five different
position descriptions (or statements of differences) covering grade
intervals GS-5, GS-7, GS-9, GS-11, and GS-12. Additionally, each
position description should be accompanied by a position evaluation
report certifying that the duties and responsibilities of the position
meet the requirements for classification into the series and grade.
Often, the difference between a higher-graded and lower-graded position
in the same career progression may be the level of supervision an
employee receives, or the increasing gradations in the scope and effect
of an employee's work on agency missions and programs, or some other
interpretative degree of occupational difficulty and responsibility. As
a result, managers who assign work and who are responsible for
describing such assignments of work, and the position classifiers who
evaluate assignments of work against OPM's and applicable agency
classification criteria, often view the practice attendant to the
current GS classification system as an exercise in semantics, and PD
writing, for the purpose of ``beating the system'' to award the highest
grade possible to a position, instead of as a management tool by which
to make meaningful and significant distinctions between levels of work.
The current GS classification system also directly impacts the
effectiveness of agency recruitment activities. Recruiting for a
vacancy which may be filled at any level from the entry level to the
full-performance level requires a separate position description for
each grade, separate qualifications requirements for each grade,
separate applicant assessment and rating tools (often referred to as
``crediting plans'') for each grade, and separate lists of best-
qualified candidates (often referred to as ``certificates'') for each
grade. For example, recruiting for a single GS-5/12 Engineer vacancy
requires five different position descriptions (GS-5, GS-7, GS-9, GS-11,
and GS-12) and five different ``crediting plans,'' and will result in
the agency issuing multiple ``certificates.'' Thus, Federal managers
and applicants for Federal employment often view the
[[Page 9040]]
system as cumbersome, time consuming, and unresponsive.
Modifying the current system to supplant sequential grade
progression with valid, rational, and credible pay bands will (1)
provide much needed management relief from the seeming arbitrariness,
rigidity, and document heaviness of the current classification system,
(2) provide managers with much needed flexibility, and (3) offer
applicants and employees greater opportunities for advancement and
inducements to retention, while retaining the public policy principles
and management values underlying the current civil service system.
A Need for Performance-Based Pay Increases
Additionally, the current GS pay system provides annual pay
increases to all employees, even those whose performance is less than
Fully Successful. Similarly, periodic within-grade pay increases are
virtually automatic. Although an employee's performance must be
determined to be at an ``acceptable level of competence'' in order for
the employee to receive a within-grade increase (WGI), this is only a
single-level threshold and no further distinctions in levels of
performance play a role. All performance levels above the threshold are
treated the same for purposes of determining the amount of the increase
and the rate at which an employee advances through the rate range of
his or her grade. NNSA and OPM do not believe it is a wise use of the
limited resources available for the compensation of Federal employees--
nor does it serve taxpayers effectively or treat employees fairly--to
pass on the same pay adjustments, year after year, to all employees
regardless of differences in their performance.
The current GS pay system does provide one limited tool to address
distinctions in levels of performance--namely, quality step increases
(QSIs). QSIs are discretionary adjustments that are not integrated into
the normal pay adjustment process; thus, limited funds are available to
provide QSIs, and the decision-making process may not be very
transparent. In addition, there is no flexibility as to the amount of
the QSI; a full step increase is required. Also, QSIs may be used only
for those with the highest rating of record. In summary, QSIs alone
cannot be relied upon to establish an effective link between pay and
performance based on meaningful distinctions among different levels of
performance.
Under these constraints of the GS pay system, agencies are severely
limited in their ability to establish a results-oriented performance
culture as contemplated under the Human Capital Assessment and
Accountability Framework (HCAAF). Within the HCAAF, a results-oriented
performance culture effectively plans, monitors, develops, rates, and
rewards employee performance, consistent with the merit system
principle that ``appropriate incentives and recognition should be
provided for excellence in performance'' (5 U.S.C. 2301(b)(3)).
C. Changes Required/Expected Benefits
The proposed demonstration project will respond to the GS
classification system problems identified above by compressing the 15
GS grades into multi-grade pay bands. Although this ``compression'' is
neither designed nor intended to eliminate the fundamental statutory
grading distinctions embedded in the traditional position
classification system, it will considerably reduce the excessive
rigidity inherent in the current system, making it substantially less
cumbersome, less labor intensive, less time consuming, and easier to
comprehend and apply. Banding the GS grade structure will also simplify
merit promotion activities, by permitting the advancement of employees
within given bands without the necessity of advertising promotional
opportunities (much like accretion-of-duties procedures under the
traditional system), and without the need for handling employee
applications in accordance with publicized merit promotion procedures.
Because a pay banding system uses broader work levels, the system can
be viewed as having more of a rank-in-person emphasis; that is, it
permits a more direct relationship between an incumbent's actual (or
anticipated) individual level of job performance and a given position's
particular level of pay.
The proposed demonstration project will respond to the pay problem
identified above by eliminating fixed steps within each of the pay
bands and by making annual GS pay adjustments performance-sensitive.
Pay adjustments will be funded from a pay pool consisting of the
amounts that would otherwise be used to pay the annual GS pay
adjustment, WGIs, and QSIs to employees covered by the demonstration
project. The pay pool also may include funds saved through the
elimination of promotion increases for promotions between grades that
are consolidated into the same band. A share mechanism will be used to
allocate pay increases among employees with different levels of
performance, and managers will be expected to control costs (and will
be held accountable for doing so in their own performance plans).
Implementation of the proposed pay system will result in larger pay
increases going to employees who demonstrate higher performance. By
regularly rewarding better performance with better pay, participating
organizations will strengthen their results-oriented performance
cultures. Among other things, they will be better able to retain their
good performers and recruit new ones.
D. Participating Organizations
It is expected that every major headquarters and field organization
in NNSA will participate. This includes HQ, program, and support
components, including NNSA's cadre of nuclear materials couriers, who
are deployed at various locations in the United States, eight
geographically dispersed Site Offices and two special purpose Naval
Reactors Offices (in Pittsburgh, PA, and Schenectady, NY), and the
Service Center in Albuquerque, NM. Each of these units is committed to
operating a credible, robust performance appraisal program aligned to
the organization's strategic goals and objectives, by providing the
necessary training and resources. These organizations have demonstrated
this commitment the past three years, as NNSA implemented a
comprehensive performance management program enterprise-wide.
E. Participating Employees
The demonstration project will cover all GS non-bargaining unit
employees in the participating organizations identified in the
preceding paragraph. (The only bargaining unit in NNSA is at
headquarters, and currently includes 20 positions.) Included in the
coverage are Schedule A and B Excepted Service employees. Not included
are Schedule C Excepted Service employees and Excepted Service
employees authorized under the NNSA Act, National Defense Authorization
Acts, and the DOE Organization Act. Table 1 shows the number of
employees currently available and subject to coverage under this
project by occupational series and grade.
[[Page 9041]]
Table 1.--Covered Employees by Occupational Series and Grade
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Pay Plan GS Grade
Count--OCC Series --------------------------------------------------------------------------------------------------------- GS
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 total
--------------------------------------------------------------------------------------------------------------------------------------------------------
00018.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 2 7 4 ..... 14
00028.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 1 3 2 2 9
00080.................................. ..... ..... ..... ..... ..... ..... 1 ..... 5 ..... 3 29 39 35 16 128
00084.................................. ..... ..... ..... ..... ..... ..... ..... 57 51 62 59 58 21 ..... ..... 308
00086.................................. ..... ..... ..... ..... ..... 2 2 1 ..... ..... ..... ..... ..... ..... ..... 5
00130.................................. ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... 2 8 18 34 45 108
00132.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 3 1 ..... 4
00201.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 3 12 16 6 8 45
00203.................................. ..... ..... ..... ..... ..... ..... 7 2 ..... ..... ..... ..... ..... ..... ..... 9
00260.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 3 1 ..... 5
00301.................................. ..... ..... ..... ..... ..... ..... ..... ..... 20 ..... 41 42 51 33 26 213
00303.................................. 3 3 9 10 3 12 23 6 ..... ..... ..... ..... ..... ..... ..... 69
00318.................................. ..... ..... ..... ..... 4 13 9 6 5 ..... ..... ..... ..... ..... ..... 37
00326.................................. 1 1 4 3 ..... 1 ..... ..... ..... ..... ..... ..... ..... ..... ..... 10
00335.................................. ..... ..... ..... ..... ..... 1 ..... ..... ..... ..... ..... ..... ..... ..... ..... 1
00340.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 20 21
00341.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 2 1 3
00342.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 2 ..... ..... ..... 2
00343.................................. ..... ..... ..... ..... ..... ..... 1 ..... 4 ..... 9 20 41 44 25 144
00344.................................. ..... ..... ..... ..... ..... ..... ..... 2 ..... ..... ..... ..... ..... ..... ..... 2
00346.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 2 5 1 ..... 8
00361.................................. ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... ..... ..... ..... ..... ..... 1
00391.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... 1
00399.................................. ..... ..... 1 ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1
00401.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 2 ..... 2
00501.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 3 ..... 5 2 3 13
00505.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 3 3
00510.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 3 10 26 10 3 52
00511.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 6 ..... 1 ..... 7
00525.................................. ..... ..... ..... ..... ..... 1 ..... 1 ..... ..... ..... ..... ..... ..... ..... 2
00560.................................. ..... ..... ..... ..... ..... ..... 1 ..... 2 ..... 1 9 15 16 8 52
00561.................................. ..... ..... ..... ..... ..... ..... 1 ..... ..... ..... ..... ..... ..... ..... ..... 1
00610.................................. ..... ..... ..... ..... ..... ..... ..... ..... 2 1 ..... ..... ..... ..... ..... 3
00671.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... 1
00690.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 3 4 ..... 7
00801.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 3 4 34 104 83 228
00802.................................. ..... ..... ..... ..... ..... ..... ..... ..... 2 ..... ..... ..... 1 ..... ..... 3
00803.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 2 ..... 2
00804.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 2 ..... 2
00810.................................. ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... 1 1 ..... ..... 3
00819.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 4 2 ..... 6
00830.................................. ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... ..... ..... ..... ..... 1
00840.................................. ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... 1 3 13 17 41 76
00850.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... 1
00854.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 4 2 2 1 9
00905.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 2 ..... 9 12 24
00950.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 3 ..... ..... ..... ..... 3
00986.................................. ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... ..... ..... ..... ..... ..... 1
00999.................................. ..... ..... ..... ..... ..... ..... 2 ..... ..... ..... ..... ..... ..... ..... ..... 2
01001.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... ..... 1
01035.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 2 ..... 5 1 8
01101.................................. ..... ..... ..... ..... ..... ..... 1 ..... 1 ..... ..... 1 3 5 1 12
01102.................................. ..... ..... ..... ..... ..... ..... ..... ..... 2 ..... 1 12 26 34 12 87
01103.................................. ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... 2 3 2 2 ..... 10
01105.................................. ..... ..... ..... ..... ..... ..... 1 ..... 2 ..... ..... ..... ..... ..... ..... 3
01106.................................. ..... ..... ..... ..... ..... ..... 1 ..... ..... ..... ..... ..... ..... ..... ..... 1
01150.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... 1
01170.................................. ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... ..... 2 1 1 5
01176.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... 1
01222.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 3 1 5
01301.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 13 37 27 78
01306.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 2 3 ..... 5
01310.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 3 4
01412.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... 1
01515.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... 1
01712.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 6 6 10 4 ..... 26
01750.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... ..... 1
01910.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 9 4 1 1 16
02003.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 2 ..... 2
02005.................................. ..... ..... ..... ..... 1 ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1
[[Page 9042]]
02010.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 ..... 1 ..... 2
02101.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 2 15 6 24
02130.................................. ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... 1 9 1 ..... 11
02210.................................. ..... ..... ..... ..... ..... ..... ..... ..... 2 ..... 1 6 18 14 3 44
----------------------------------------------------------------------------------------------------------------
Grand total........................ 4 4 14 13 8 30 50 77 104 63 145 260 410 467 353 2002
--------------------------------------------------------------------------------------------------------------------------------------------------------
sManagement has provided initial notice to affected employees and
will continue consultation throughout project implementation.
F. Project Design
The project is designed to (1) fundamentally simplify the position
classification system as the key to improving recruitment, retention,
and classification activities, (2) ensure that no participating
employee with a rating of record of less than Fully Meets Expectations
will receive a pay increase, and (3) ensure that funds available for
pay adjustments will be allocated on the basis of performance, the
better performers receiving the greater performance payouts.
To ensure expeditious and effective project implementation and
completion, NNSA will model, to the extent feasible and appropriate,
programmatic features and operating systems and procedures relating to
NNSA's own pay-banded, pay-for-performance excepted service system; in
addition, NNSA will review the successes, mistakes, and lessons from
the experiences of other agency demonstration projects, notably the
current Department of Defense (DoD) laboratory projects, which are
based on the foundational China Lake project; the National Institute of
Standards and Technology permanent Alternative Personnel System; and
DoD's new National Security Personnel System (one of the participating
Air Force labs shares Kirtland AFB with NNSA).
Several design principles will underpin this project:
NNSA will not establish its own classification standards,
but rather, will construct band thresholds and boundaries consistent
with OPM's official classification criteria; at the same time, NNSA
will streamline documentation requirements, including by eliminating
Factor Evaluation System formatted PDs, with greater reliance on the
Primary Standard to set band parameters.
NNSA will not delegate classification authority to
managers. NNSA understands that not delegating classification authority
runs counter to the experiences of other agency demonstration projects.
Nonetheless, it is much more efficient to leave the exercise of this
authority and all attendant administration activities in the trained
hands of the resident human resources (HR) staff. NNSA sees little
value in turning managers into classifiers, but rather, believes the
value is in preparing managers to become better supervisors. NNSA's
pre-eminent managerial goal is to develop a seasoned cadre of Federal
managers who can practice the art of supervision at an uncommonly high
level (i.e., the supervisor who is more mentor than taskmaster, who can
nurture subordinates and unleash their potential for superior
performance through the instruments of performance appraisal and reward
programs).
NNSA will use the career paths derived from this
demonstration project to underwrite our new concept of a Management
Needs-Based Career Path Model to Employee Development and Career
Planning. This concept envisions the use of career paths to acquire
well-qualified candidates from the current workforce to satisfy new and
emerging mission needs. It will use such traditional mechanisms as in-
service placement, reassignment, retraining, enrollment in formal
development programs, and mixtures of competitive and noncompetitive
procedures, to prepare employees to move within and across career paths
in response to new and emerging job requirements.
NNSA will design this demonstration project as a direct
complement to and manifestation of the Administrator's strong desire to
create NNSA as an employer of choice in the Federal Government. The
demonstration project will give real definition, direction, and impetus
to the Administrator's concept, which centers on the first-line
supervisor as the primary agent in developing a management culture that
attracts, develops, and retains a diverse and talented workforce.
III. Personnel System Changes
The 15-grade GS position classification system established under 5
U.S.C. chapter 51 and the GS pay system established under 5 U.S.C.
chapter 53, subchapter III, will be modified as described in the
following sections. Except as otherwise provided in this plan,
demonstration project employees will be considered to be GS employees
in applying other laws, regulations, and policies. NNSA does not
currently have employees covered by law enforcement officer (LEO)
special base rates. Should any law enforcement officers be covered by
this demonstration project in the future, they will not be considered
to be General Schedule employees for the purposes of applying LEO
special base rates authorized by section 403 of the Federal Employees
Pay Comparability Act of 1990; a separate career path would be
established for these employees, and band ranges for any such LEOs will
take LEO special base rates into account.
A. Pay Banding Classification and Pay System
1. Establishment of Career Paths and Pay Bands
NNSA may establish, and adjust over time, career paths that group
one or more occupational categories together and provide a common
banding structure (i.e., set of work levels and rate ranges) for
occupations within a given career path. Initially, NNSA intends to
establish four career paths as follows:
(1) Professional, Engineering and Scientific: Research, policy,
staff, and managerial positions in science, engineering, computing,
mathematics and other positions the duties of which include the
performance of professional work. Examples of occupational series in
this career path are 510--Accountant, 801--General Engineer, 840--
Nuclear Engineer, 905--Attorney, 1102--Contract Specialist, 1301--
Physical Scientist, and similar traditional two-grade interval GS
occupations whose qualifications requirements include a minimum
education requirement.
[[Page 9043]]
(2) Administrative: Specialist positions in such fields as finance,
human resources, public affairs, technical information, and management
analysis. Examples of occupational series in this career path are 080--
Security Specialist, 201--Human Resources Specialist, 340--Program
Manager, 341--Administrative Officer, 343--Management/Program Analyst,
560--Budget Analyst, 1035--Public Affairs Specialist, 2101--
Transportation Specialist, and similar traditional two-grade interval
GS occupations whose qualifications requirements do not include a
minimum education requirement.
(3) Technician and Administrative Support: Engineering Technician,
clerical, assistant, secretarial, and other support positions not
fitting the definitions of any other career path. Examples of
occupational series in this career path are 203--Human Resources Clerk
and Assistant, 303--General Clerk, 318--Secretary, 525--Accounting
Technician, 802--Engineering Technician, 1106--Procurement Clerk/
Assistant, and similar traditional one-grade interval technician and
administrative support occupations not fitting the definitions of any
other career path.
(4) Nuclear Materials Couriers: NNSA employs approximately 400
Nuclear Materials Couriers, GS-084, who have a unique set of duties and
skills, supporting a separate career path, and who have an unusual
single-grade interval pattern from GS-8 through GS-13. All positions in
the 084 occupational series are encompassed in this career path.
Positions of employees who work in the same organizations, doing
related work, but that are not classified in the 084 job series, will
be allocated to one of the other three career paths, as appropriate to
the nature of the work performed.
Each career path will be subdivided into pay bands. Each pay band
will correspond to one or more GS grades. NNSA may establish, and
adjust over time, a career path's pay band structure. Initially, the
pay bands within each career path and their relationship to GS grades
will be as follows:
(1) Professional, Engineering and Scientific Career Path
(a) Pay Band I--(GS-5 through GS-7)
(b) Pay Band II--(GS-9 through GS-12)
(c) Pay Band III--(GS-13 through GS-14)
(d) Pay Band IV--(GS-15)
(2) Administrative Career Path
(a) Pay Band I--(GS-5 through GS-8)
(b) Pay Band II--(GS-9 through GS-12)
(c) Pay Band III--(GS-13)
(d) Pay Band IV--(GS-14)
(e) Pay Band V--(GS-15)
Positions in the Professional, Engineering and Scientific and
Administrative career paths will normally be filled at Pay Band II or
higher. Pay Band I for the Professional, Engineering, and Scientific
and Administrative career paths is used primarily, but not exclusively,
for basic entry-level appointments, upward mobility, and Student Career
Employment Program appointees.
(3) Technician and Administrative Support Career Path
(a) Pay Band I--(GS-1 through GS-4)
(b) Pay Band II--(GS-5 through GS-8)
(c) Pay Band III--(GS-9)
(4) Nuclear Materials Courier Career Path
(a) Pay Band I--(GS-8 through GS-11)
(b) Pay Band II--(GS-12) (``Convoy Commander'' positions only)
(c) Pay Band III--(GS-13) (``Unit Commander'' positions only)
NNSA will coordinate changes in career paths or pay banding
structures with OPM. After coordination with OPM, NNSA will give
affected employees advance notice and an opportunity to comment before
effecting a change with respect to career paths or banding structure.
2. Position Classification
Application of the 15-grade GS position classification system
established under 5 U.S.C. chapter 51 will be simplified by allowing a
position to be assigned to a specific pay band if the duties and
responsibilities of the position meet (or exceed) the requirements for
classification into the lowest grade included in that specific pay
band. For example, an 801, Engineer, position assigned to Pay Band 1
(GS-5 through GS-7), need only meet the requirements for classification
at the GS-5 level. Position descriptions will include examples of
higher-level duties and responsibilities to which employees are fully
intended to progress. NNSA will establish pay band boundaries
consistent with OPM's existing position classification standards,
grade-evaluation criteria, and grading practices.
3. Minimum Qualifications Requirements
Application of the OPM Operating Manual: Qualification Standards
for General Schedule Positions is simplified by allowing a candidate to
qualify for a specific pay band if the candidate meets (or exceeds) the
requirements for the lowest grade included in that specific pay band.
For example, a candidate for an 801 Engineer position assigned to Pay
Band 1 (GS-5 through GS-7), need only meet the qualifications
requirements for a GS-801 Engineer position at the GS-5 level.
For NNSA demonstration project employees and employees of other
Federal agencies who are in sufficiently similar pay banding systems,
the common OPM requirement of one year of experience ``at the next
lower grade in the normal line of progression for the occupation'' is
changed to ``at the next lower pay band in the normal line of
progression for the occupation.''
Federal employees in the General Schedule pay system, Federal
employees in other pay systems comparable to the General Schedule, and
non-Federal applicants must meet the common OPM requirement of one year
of experience ``at the next lower grade in the normal line of
progression for the occupation.''
4. Elimination of Fixed Steps
The 10 fixed steps of each GS grade will not apply to employees
participating in the demonstration project. The fixed-step system was
designed to reward longevity. A pay banding system is an important
element of any effort to make pay more performance-sensitive. No
employee will lose pay as a result of becoming covered by the
demonstration project. However, demonstration project employees will no
longer receive longevity-based within-grade pay increases at prescribed
intervals. Instead, they will be granted annual performance adjustments
as described in section C below.
5. Rate Range
The normal minimum and maximum rates of the rate range for each pay
band will equal the applicable step 1 rate and step 10 rate,
respectively, for the lowest and highest grades, respectively, in the
General Schedule that are included in the pay band. The minimum rate of
the pay band is extended 5 percent below the normal minimum for
employees with a rating of record below Fully Meets Expectations. Such
an employee's rate may fall below the normal pay band minimum when that
minimum increases as a result of a pay band adjustment, but the
employee cannot receive a pay adjustment because the employee's rating
of record is below Fully Meets Expectations, as described in section
C.4.
The maximum rate of each pay band is extended 5 percent above the
normal maximum for all employees with a
[[Page 9044]]
rating of record at the highest level (currently called ``Significantly
Exceeds Expectations'' in NNSA). This feature will help ensure that the
range of available pay rates will be adequate to recognize truly
outstanding performance. If an employee within this rate extension
receives a rating of record below the highest level, the employee's
rate may not be increased except as necessary to prevent the rate of an
employee with a rating of record of Fully Meets Expectations or higher
from falling below the normal pay band maximum due to a rate range
adjustment.
6. Rate of Basic Pay Upon Initial Appointment
Upon appointment to a demonstration project position under
Delegated Examining, Direct-Hire Authorization, or other authority
primarily designed for initial entry into the Federal service (e.g.,
Veterans Employment Opportunity Act, 30% Disabled Veteran Appointment),
an appointee's pay rate may be set at any rate within the normal pay
band range. In exercising this flexibility, NNSA will consider the
appointee's qualifications, competing job offers, NNSA's need for the
appointee's talents, the appointee's potential contributions to NNSA
mission accomplishment, and the rates received by on-board employees.
This flexibility will allow NNSA to compete more effectively with
private industry for the best talent available, though managers will be
expected to use this flexibility with great judiciousness and prudence.
7. Rate of Basic Pay Upon Promotion
Upon promotion to a higher pay band, an appointee's pay rate
generally will be set at a rate within the normal pay band range to
which the appointee is being promoted that provides a pay increase of 8
percent, unless a greater increase is necessary to set pay at the
normal range minimum. NNSA may establish exceptions to this policy to
deal with employees receiving a retained rate, employees who are re-
promoted shortly after a demotion, employees with exceptional
performance warranting a larger increase with higher management
approval, etc. In exercising this flexibility, NNSA will consider the
appointee's qualifications, competing job offers, NNSA's need for the
appointee's talents, and the appointee's potential contributions to
NNSA mission accomplishment. A pay band in a different career path will
be considered to be a higher pay band (i.e., a promotion) under
policies prescribed by NNSA. NNSA may adopt policies providing a
promotion-equivalent increase to a Federal employee outside the
demonstration project who is selected, through merit promotion
procedures, to fill a higher-level position (as defined in NNSA
policies) covered by the demonstration project.
NNSA may establish special rules for computing the promotion
increase for promotions involving positions covered by a staffing
supplement that take into account the staffing supplement and locality
pay, subject to guidance provided by OPM.
8. Rate of Basic Pay in Noncompetitive Lateral Actions
Upon non-competitive lateral movement (e.g., via transfer or
reassignment) to a demonstration project position from another Federal
position, an employee's pay rate will be set at an amount that is equal
to the employee's current pay rate. For such an employee moving from a
position outside the demonstration project, NNSA may provide an
immediate increase in the rate of basic pay to reflect the prorated
value of the employee's next scheduled within-grade increase under the
former pay system, consistent with the requirements in section V.A.
9. Other Pay Administration Provisions
Performance-based pay adjustments described in section C will be
made to the rate of basic pay. These adjustments are scheduled to be
made on the same date that annual rate range adjustments normally take
effect--i.e., the first day of the first pay period beginning on or
after January 1.
Locality-based comparability payments under 5 U.S.C. 5304 will be
paid on top of the rate of basic pay in the same manner as those
payments apply to other GS employees. Staffing supplements may apply as
described in section III.A.10.
Subject to guidance provided by OPM, NNSA will establish final pay
administration rules for determining an employee's rate of pay upon
initial appointment, promotion, demotion, transfer, reassignment, or
other position change, as needed. In addressing geographic conversions
and simultaneous pay actions, such rules must be consistent with 5 CFR
531.205 and 5 CFR 531.206, respectively.
The grade retention provisions in 5 U.S.C. 5362 and 5 CFR part 536
are not applicable (i.e., no band retention). The pay retention rules
in 5 U.S.C. 5363 and 5 CFR part 536 continue to apply to demonstration
project employees, except that an employee with a rating of record
below Fully Meets Expectations may not receive an increase in his or
her retained rate under 5 U.S.C. 5363(b)(2)(B). If such an employee's
retained rate falls below the applicable pay band adjusted maximum rate
(including any applicable locality payment or staffing supplement), pay
retention ceases and the rate is converted to an equal within-pay band
rate (i.e., the rate is not set at the range maximum).
When applicable, the saved pay rules in 5 U.S.C. 3594 and 5 CFR
359.705 for former members of the Senior Executive Service continue to
apply to demonstration project employees, except that an employee with
a rating of record below Fully Meets Expectations may not receive an
increase in his or her saved rate under 5 U.S.C. 3594(c)(2). If such an
employee's retained rate falls below the applicable range adjusted
maximum rate, pay retention ceases and the rate is converted to an
equal within-range rate (i.e., the rate is not set at the range
maximum).
An employee's rate of basic pay may not exceed the normal maximum
rate for the employee's band unless the employee is receiving a
retained rate under 5 U.S.C. 5363 or a saved rate under 5 U.S.C. 3594
or is entitled to a rate within the upper range extension, as provided
under section III.A.5. An employee's rate of basic pay may not be below
the normal minimum rate for the employee's grade unless the employee's
most recent rating of record is below Fully Meets Expectations.
NNSA may adopt supplemental pay administration policies governing
matters not specifically addressed in this plan, subject to any OPM
guidance.
10. Staffing Supplements
An employee who is assigned to an occupational series and
geographic area covered by an OPM-established special rates schedule,
and who meets any other applicable coverage requirements, will be
entitled to a staffing supplement if the maximum adjusted rate for a
covered position in the GS grades corresponding to the employee's band
is a special rate that exceeds the applicable maximum GS locality rate.
The staffing supplement is added on top of the rate of basic pay in the
same manner as locality pay. An employee will receive the higher of the
applicable locality payment or staffing supplement.
For employees being converted into the demonstration project, the
employee's total pay immediately after conversion will be the same as
immediately before, but a portion of the total will be in the form of a
staffing supplement. Adverse action and pay retention provisions will
not apply to
[[Page 9045]]
the conversion process as there will be no change in the total salary
rate. The staffing supplement is calculated as described below.
Upon conversion, the demonstration base rate will be established by
dividing the employee's former GS adjusted rate (the higher of special
rate or locality rate) by the staffing factor. The staffing factor will
be determined by dividing the maximum special rate for the banded
grades by the GS base rate corresponding to that special rate (step 10
GS base rate for the same grade as the special rate). The employee's
demonstration staffing supplement is derived by multiplying the
demonstration base rate by the staffing factor minus one. Therefore,
the employee's final demonstration special staffing rate equals the
demonstration base rate plus the special staffing supplement; this
amount will equal the employee's former GS adjusted rate.
Simplified, the formula is this:
Staffing factor = (Maximum special rate for banded grades) / (GS base
rate corresponding to that special rate)
Demonstration base rate = (Former GS adjusted rate [special or locality
rate]) / (Staffing factor)
Staffing supplement = demonstration base rate x (staffing factor - 1)
Salary upon conversion = demonstration base rate + staffing supplement
[sum will equal existing rate]
If a special rate employee is converted to a band where the maximum
GS adjusted rate for the banded grades is a locality rate, when the
employee is converted into the demonstration project, the demonstration
base rate is derived by dividing the employee's former special rate by
the applicable locality pay factor (for example, in the Washington-
Baltimore area, the locality pay factor is 1.175 in 2006). The
employee's demonstration locality-adjusted rate will equal the
employee's former GS adjusted rate.
Any General Schedule or special rate schedule adjustment will
require recomputation of the staffing supplement. Employees receiving a
staffing supplement remain entitled to an underlying locality rate,
which may over time supersede the need for a staffing supplement. If
OPM discontinues or decreases a special rate schedule, pay retention
provisions will be applied, as appropriate. Upon geographic movement,
an employee who receives the special staffing supplement will have the
supplement recomputed; any resulting reduction in the supplement will
not be considered an adverse action or a basis for pay retention.
Established salary including the staffing supplement will be
considered basic pay for the same purposes as a special rate under 5
CFR 530.308--e.g., for purposes of retirement, life insurance, premium
pay, severance pay, and advances in pay. It will also be used to
compute worker's compensation payments and lump-sum payments for
accrued and accumulated annual leave. Staffing supplement adjusted
rates are subject to the Executive Schedule level IV cap that applies
to GS locality rates and special rates.
B. Performance Appraisal
NNSA recognizes the importance of maintaining highly credible
performance management systems. NNSA will use a performance management
program under the Department of Energy appraisal system that has been
approved by OPM consistent with chapter 43 of title 5, United States
Code. Throughout the duration of the demonstration project, the
effectiveness of performance management within the project will be
monitored by examining metrics and assessments that will be included in
the demonstration project evaluation plan.
1. Program Requirements
The NNSA performance appraisal program requires written performance
plans for each covered employee containing the employee's performance
elements and standards. The performance plan links the performance
elements and standards for individual employees to the organization's
strategic goals and objectives. Ongoing feedback and dialogue between
employees and their supervisors regarding performance is required. In
addition, the program provides for, at a minimum, one mid-year progress
review.
The NNSA appraisal program, including its performance levels and
standards, provides for making meaningful distinctions in performance.
The program currently uses a four-level rating pattern to both
summarize performance and to appraise performance at the element level.
Its summary level pattern under 5 CFR 430.208(d) uses Levels 1, 2, 3,
and 5, which NNSA has labeled Does Not Meet Expectations, Needs
Improvement, Fully Meets Expectations, and Significantly Exceeds
Expectations, respectively. Employees must be covered by their
performance plan for at least 90 days before they can be assigned a
rating of record. Supervisors and managers apply the appraisal program
in a way that makes appropriate differentiations in performance. These
differentiations reflect overall organizational performance. Employees
receive a written performance appraisal (i.e., a rating of record)
annually. Forced distributions of ratings are prohibited. Each annual
appraisal period will begin on October 1 and end on the following
September 30. Performance appraisals will be completed in a timely
manner to support pay decisions in accordance with section C.
Additional guidance on the NNSA performance appraisal program is
provided through internal operations manuals. Performance appraisal is
an evolutionary process, and changes may be made during the course of
the demonstration project based on findings from our ongoing
evaluations and reviews. Any changes will be communicated to affected
employees, and they will be given a chance to comment before NNSA
implements the changes.
2. Supervisory Accountability
Supervisors are responsible for providing appropriate consequences
for employee performance by addressing poor performance and recognizing
exceptional performance. The performance plans for supervisors and
managers include the degree to which supervisors and managers plan,
assess, monitor, develop, correct, rate, and reward subordinate
employees' performance. It is recognized that specific training must be
provided to prepare supervisors and managers to exercise these
responsibilities. NNSA has provided supervisory training each of the
past three years on philosophical and procedural aspects of its new and
still evolving performance management program (i.e., the lessons
learned in the administration of each performance appraisal cycle have
resulted in refinements each subsequent year). NNSA understands that
this demonstration project will heighten the need for continuing
supervisory training to support the accurate and realistic appraisal of
performance.
3. Reconsideration of Ratings
To support fairness and transparency for the program and its
consequences, employees have an opportunity to request reconsideration
of a rating of record by a management official other than the rating
official. Such reconsiderations must be initiated no more than 15 days
after the official rating of record is assigned, consistent with the
applicable administrative grievance policy. If the reconsideration of
the appraisal results in a different
[[Page 9046]]
rating of record, the revised rating of record will become the basis
for the employee's pay adjustment(s) in accordance with section C. If
the adjustment occurs after all pay deliberations have been finalized,
it does not result in a recalculation of other employees' pay
adjustments.
C. Performance-Based Pay Adjustments
1. Pay Pools
Participating employees whose most recent rating of record is below
Fully Meets Expectations will not receive an annual across-the-board
increase as do GS employees. Funds that otherwise would be spent on the
across-the-board GS pay adjustment, WGIs, and QSIs for demonstration
project employees will instead be placed into a pay pool, which will be
used to fund annual performance-based pay increases for those
employees. The pay pool also may include funds saved through the
elimination of promotion increases for promotions between grades that
are consolidated into the same band. A share mechanism will be used (1)
to ensure that employees with higher ratings of record receive greater
pay increases than employees with relatively lower ratings of record
and (2) to control costs without resorting to a forced distribution of
ratings. Each employee will be assigned a certain number of shares,
based on his or her rating of record in accordance with section C.2.
All employees in the normal band rate range whose rating of record is
at least Fully Meets Expectations will receive an adjustment equal to
at least the amount of the annual GS base pay comparability increase
under 5 U.S.C. 5303.
Participating organizations will establish pay pools for allocating
performance pay increases. NNSA will determine which participating
employees are covered by any pay pool and determine the dollar value of
each pay pool. In setting the value of pay pools, NNSA will initially
allocate an amount for performance pay increases equal to the estimated
value of the WGIs, QSIs, and annual GS pay adjustments that otherwise
would have been paid to participating employees. In computing the
estimated value of WGIs and QSIs, NNSA may use Governmentwide averages.
2. Performance Shares
NNSA will establish rating/share patterns for each pay pool--that
is, the relationship between a rating of record and a single number of
shares. NNSA rating/share patterns will ensure that a higher rating of
record receives a higher performance payout percentage for employees in
the normal rate range.
NNSA may adjust rating/share patterns over time after coordination
with OPM, and after giving affected employees advance notice. A change
in the rating/share pattern may be applied in computing performance-
based pay adjustments based on an appraisal period only if it takes
effect at least 120 days before the end of that appraisal period.
Initially, the number of shares for each rating level will be as
follows: 3 shares are assigned to the Significantly Exceeds
Expectations rating, 2 shares to the Fully Meets Expectations rating,
and 1 share to the Fully Meets Expectations rating when the employee
receives a rating of Needs Improvement in a critical element but the
Final Summary Rating is Fully Meets Expectations.
No shares may be assigned to any rating of record below Fully Meets
Expectations, since no pay increase is payable to employees with such a
rating of record. After the ratings of record and shares are assigned
to employees, the value of a single share can be calculated.
In addition to performance-based pay increases, demonstration
project employees remain eligible to receive both monetary and non-
monetary forms of recognition, so long as employees are not rewarded
twice for the same contributions using incentive awards authorities
under Chapter 45 of title 5. NNSA will adopt supplemental award
administration policies not specifically covered by this plan.
3. Pay Adjustments
In general: NNSA will determine the value of one performance share,
expressed as a percentage of the employee's rate of basic pay, based on
the value of the pay pool and the distribution of shares among pay pool
employees. An individual employee's performance payout is determined by
multiplying the determined percentage value of a performance share by
the number of shares assigned to the employee. The performance payout
is computed as a percentage of the employee's rate of base pay as in
effect on the date determined in NNSA policies. On the first day of the
first pay period beginning on or after January 1 of each year, this
amount must be paid as an increase in the employee's rate of basic pay,
but only to the extent that it does not cause the employee's rate to
exceed the applicable maximum of the employee's rate range.
Notwithstanding the preceding sentence, employees in the upper band
extension rated below the highest rating level are subject to special
rules as described in section III.A.5. Any portion of an employee's
performance pay increase amount that cannot be delivered as a basic pay
increase will be paid out as a lump sum (with no charge to the pay
pool). Such a lump-sum payment is not basic pay for any purpose and is
not a cash award under chapter 45 of title 5, United States Code.
An employee with a rating of record of Fully Meets Expectations or
higher may not receive a performance payout that is less than the
percentage value of any simultaneous rate range adjustment, except for
(1) an employee receiving a retained rate and (2) an employee in the
upper band extension with a rating of record below Significantly
Exceeds Expectations (as provided in section III.A.5). This guaranteed
amount will be used in place of any lower performance payout resulting
from the share methodology. Any additional costs of using the
guaranteed amount will be funded outside the pay pool. Otherwise, the
guaranteed amount is applied in the same manner as the regular
performance payout.
An employee who does not have a rating of record for the appraisal
period most recently completed will be treated the same as employees in
the same pay pool who received the modal rating for that period,
subject to NNSA proration policies.
NNSA may establish policies on prorating the performance pay
increases and/or lump-sum payments for an employee who, during the
period between annual pay adjustments, was (1) hired or promoted, (2)
in leave-without-pay status, (3) on a part-time work schedule, or (4)
in other circumstances that make proration appropriate.
If an employee's rating of record that is the basis for a
performance payout is retroactively revised (after the regular
effective date of performance payouts) through a reconsideration or
grievance process, the employee's performance payout must be
retroactively recomputed using the share value as originally
determined. Any such retroactive corrections are not funded out of the
pay pool and do not affect the performance payouts provided to other
employees in the pay pool. In setting the size of a future pay pool,
management will take into account past and projected corrections.
Special provisions for employees returning to duty after a period
of service in the uniformed services or in receipt of workers'
compensation benefits: Special pay-setting provisions apply to
employees who do not have a rating of record to support a pay
adjustment but who are returning to duty status after a period of leave
[[Page 9047]]
without pay or separation during which the employee (1) was serving in
the uniformed services (as defined in 38 U.S.C. 4303 and 5 CFR 353.102)
with legal restoration rights (e.g., 38 U.S.C. 4316), or (2) was
receiving workers' compensation benefits under 5 U.S.C. chapter 81,
subchapter I. In these cases, NNSA will determine the employee's
prospective rate of basic pay upon return to duty by making performance
pay adjustments for the intervening period based on the modal rating of
record for employees in the same pay pool. The performance pay
increases during the intervening period may not be prorated based on
periods covered by this provision. In addition, a performance pay
increase that is effective after the employee's return to duty may not
be prorated based on periods covered by this provision. A lump-sum
payment for a period including actual service performed after the
employee's return to duty must be prorated (based on service covered by
this provision) under the same agency proration policies that apply
generally to periods of leave without pay.
Special provision for employees receiving a retained rate: An
employee receiving a retained rate under 5 U.S.C. 5363 or 5 U.S.C. 3594
is not eligible for a basic pay increase except in conjunction with a
rate range adjustment. For a retained rate employee whose rating of
record is Fully Meets Expectations or higher, the retained rate must be
adjusted consistent with the normal pay retention rules (5 CFR part
536, subpart C, or 5 CFR 359.705, as applicable)--i.e., 50 percent of
an increase in the applicable maximum rate of the grade, but if the
resulting rate would fall below the new range maximum, the employee's
rate of basic pay must be set at the range maximum. A retained rate
employee whose rating of record is below Fully Meets Expectations may
not receive an increase in basic pay. At the discretion of the
Administrator or the Administrator's designee, a retained rate employee
may receive the same lump-sum payment approved for an employee in the
same pay pool who is at the applicable range maximum and who has the
same performance rating of record and number of shares.
4. Employees Who Do Not Receive a Pay Adjustment
Employees with a rating of record below Fully Meets Expectations
are prohibited from receiving a pay increase, except if necessary to
prevent an employee's rate from falling more than 5 percent below the
normal range minimum. When an employee does not receive a pay increase
because of performance below Fully Meets Expectations, his or her pay
rate may fall below the normal minimum rate of the pay band, since that
range minimum may be increasing. However, in no case may an employee's
rate of basic pay be reduced more than 5 percent below the normal range
minimum. In other words, the minimum of the band is extended by 5
percent for employees rated below Fully Meets Expectations.
If NNSA chooses to give such an employee a new rating of record of
Fully Meets Expectations or higher before the end of the current
appraisal period, the employee is entitled to an increase effective on
the first day of the first pay period beginning on or after the date
the new rating of record is final. The increase must be the same dollar
amount as the increase the employee would have received if he or she
had been rated Fully Meets Expectations at the time the increase was
initially denied.
Each employee who does not receive an increase in basic pay because
his or her performance is less than Fully Meets Expectations will be
entitled to be notified promptly in writing of that fact. At the same
time, the employee must be informed in writing of the right to request
that the agency reconsider its determination, under the same procedures
prescribed by OPM regarding the determination not to provide a within-
grade increase under 5 U.S.C. 5335(c). The Merit Systems Protection
Board will process any appeals under this section in the same manner
that it processes appeals under 5 U.S.C. 5335(c).
5. Locality Pay and Staffing Supplement
When a locality-based comparability payment established under 5
U.S.C. 5304 is increased, a demonstration project employee whose most
recent rating of record is below Fully Meets Expectations is entitled
to the increased locality payment, but his or her underlying rate of
basic pay will be reduced in a manner that ensures the employee's total
rate of pay does not increase. This reduction is necessary to ensure,
in an administratively feasible way, that an employee rated below Fully
Meets Expectations will not receive a pay increase; it does not
constitute a reduction in pay for purposes of applying the adverse
action procedures in chapter 75 of title 5, United States Code.
(Exception: An employee's rate of basic pay may not be reduced under
this paragraph to the extent that the reduction would cause an
employee's rate to fall more than 5 percent below the normal range
minimum.)
Similarly, when a staffing supplement is increased, a demonstration
project employee whose rating of record is below Fully Meets
Expectations is entitled to the increased supplement, but his or her
underlying rate of basic pay will be reduced in a manner that ensures
the employee's total rate of pay does not increase.
D. Reduction-in-Force
1. If, during the life of the demonstration project, NNSA enters
into a reduction-in-force (RIF), the RIF will be conducted in
accordance with 5 U.S.C. 1302, 3502, and 3508 and 5 CFR part 351,
except as follows:
(a) Each of the four career paths in each NNSA local commuting area
will constitute separate competitive areas (i.e., separate from the
other career paths, and separate from the competitive areas of other
NNSA employees);
(b) NNSA will establish competitive levels consisting of all
positions in a competitive area which are in the same pay band and
classification series, and which are similar enough in duties,
qualification requirements, pay schedules, and working conditions so
that the incumbent of one position may be reassigned to any of the
other positions in the level without undue interruption. Each
demonstration project competitive level will become a Retention List
for purposes of competition when employees are released from their
competitive levels, displaced by higher-standing employees, or placed
during the exercise of assignment rights.
(c) Assignment rights will be modified by substituting ``one pay
band'' for ``three grades'' and ``two pay bands'' for ``five grades.''
(d) NNSA will use retention standing when it chooses to offer
vacant positions within the meaning of 5 CFR 351.704.
2. Prior to conducting a RIF, NNSA will issue and implement a
policy for the establishment and operation of an agency-level
reemployment priority list (RPL) designed to assist current NNSA
competitive service demonstration project employees who will be
separated as a result of a RIF and, subsequently, former NNSA
competitive service demonstration project employees who have been
separated as a result of a RIF, or who have fully recovered from a
compensable injury after more than one year, in their efforts to be
reemployed at NNSA, by affording them priority consideration over
certain outside job applicants for NNSA
[[Page 9048]]
competitive service demonstration project vacancies.
NNSA will develop and adopt supplemental RIF administration
procedures to augment the RIF policies stipulated by this plan.
IV. Training
As NNSA has learned during the past three years of implementing and
refining a new performance management program, training for all
involved will be essential to the success of the demonstration project.
Training will be provided to employees, supervisors, and managers
before the project is launched and throughout the life of the project.
It is important that employees perceive the performance management
program as fair and transparent; therefore, supervisors and managers
will be trained extensively in setting and communicating performance
expectations; monitoring performance and providing timely feedback;
developing employee performance and addressing poor performance; rating
employees' performance based on expectations; and involving employees
in the development and implementation of the performance appraisal
program. Supervisors and managers will be held accountable for the
effective management of the performance of employees they supervise
through performance expectations set for and appraisals made of their
own performance in this regard.
All employees will be trained in the performance appraisal process
and the pay adjustment mechanism. Various types of training are being
considered, including videos, on-line tutorials, and train-the-trainer
concepts.
V. Conversion
A. Conversion to the Demonstration Project
1. Employees whose positions become covered by the demonstration
project will convert into the career path and pay band covering the
occupational series and grade of their position of record. Employees
will convert to the demonstration project with no change in their total
rate of pay (including basic pay, plus any applicable locality payment,
special rate supplement, or staffing supplement). Special conversion
rules apply to special rate employees as described in section III.A.10,
Staffing Supplements. Any simultaneous pay action that is scheduled to
take effect under the GS pay system on the date of conversion must be
processed before processing the conversion to the pay banding system.
NNSA implementing policies will provide procedures for converting an
employee on grade retention under 5 U.S.C. 5362 or receiving a retained
rate under 5 U.S.C. 5363 or a saved rate under 5 U.S.C. 3594 to the
demonstration project.
2. Immediately after conversion, eligible employees will receive an
increase in basic pay reflecting the prorated value of the next
scheduled within-grade increase (WGI). The prorated value is determined
by calculating the portion of the time-in-step employees have completed
towards the waiting period for their next WGI. This WGI ``buy-in''
adjustment will not be paid to (1) employees who are at the step 10
rate for their grade immediately before conversion to the demonstration
project, (2) employees who are receiving a retained rate of pay under 5
U.S.C. 5363 or saved rate under 5 U.S.C. 3594 immediately before
conversion to the demonstration project, or (3) employees whose rating
of record is below Fully Meets Expectations.
3. Adverse action provisions under 5 U.S.C. chapter 75, subchapter
II, do not apply to reductions in pay upon conversion into the
demonstration project as long as the employee's total rate of pay
(including basic pay, plus any applicable locality payment, special
rate supplement, or staffing supplement) is not reduced upon
conversion.
4. The first performance-based pay increase under the project's pay
adjustment mechanism will be effective on the first day of the first
pay period beginning on or after January 1, 2008.
5. For employees who enter the demonstration project by lateral
reassignment or transfer (i.e., not by conversion of position), NNSA
may apply parallel pay conversion rules, including rules for providing
a prorated adjustment reflecting time accrued toward a GS within-grade
increase or similar within-range adjustment under another pay system.
If conversion into the demonstration project is accompanied by a
geographic move, the employee's pay entitlements under the former pay
system in the new geographic area must be determined before performing
the pay conversion.
B. Conversion to the General Schedule System
NNSA implementing policies will provide procedures for converting
an employee's pay band and pay rate to a GS-equivalent grade and rate
of pay if the employee moves out of the demonstration project to a GS
position. The converted GS-equivalent grade and rate of pay will be
determined before any geographic move, promotion, or other simultaneous
action that occurs simultaneously with conversion back to the GS
system. The new employing organization must use the converted GS-
equivalent grade and rate of pay in applying various pay administration
rules that govern how pay is set in the GS position (e.g., rules for
promotion and highest previous rate under 5 CFR part 531, subpart B,
and grade and pay retention under 5 CFR part 536). The converted GS
grade and rate of pay are deemed to have been in effect at the time the
employee left the demonstration project pay banding system. The rules
for determining the converted GS grade for pay administration purposes
do not apply to the determination of an employee's GS-equivalent grade
for other purposes, such as reduction-in-force or adverse action. NNSA
will perform the computations for employees who remain within NNSA and
DOE. NNSA may perform the computations, as a courtesy, for employees
who move to other Federal agencies. At a minimum, NNSA will provide a
copy of the conversion procedures to gaining Federal agencies for their
use. If an employee moves out of the demonstration project to a non-GS
system, the employee's pay will be set under the pay-setting rules
governing that system.
VI. Project Duration
The initial implementation period for the demonstration project
will be 5 years. However, with OPM's concurrence, the project may be
extended, modified, or terminated on or before the expiration of the
five-year period.
VII. Project Evaluation
Chapter 47 of title 5, United States Code, requires an evaluation
of the results of the demonstration project. NNSA, in coordination with
OPM, will develop a plan to evaluate the demonstration project to
determine the extent to which the pay increases paid to participating
employees reflect meaningful distinctions among their levels of
performance and the extent to which the project is achieving its other
stated goals. Workforce data will be analyzed to make this assessment
and to determine whether the project is resulting in any adverse impact
on particular groups of employees. Key indicators, including leadership
commitment, communication, stakeholder involvement, training, planning,
mission alignment, and the rewarding of performance, will be assessed
to ensure compliance with stated project goals. The evaluation will
address the extent to which the project
[[Page 9049]]
has incorporated the elements required by section 1126 of Public Law
108-136 (5 U.S.C. 4701 note). In addition, the project will be examined
during each phase of the evaluation to assess that costs are being
managed effectively. Moreover, cost discipline will be examined during
each phase of the evaluation to ensure spending remains within
acceptable limits. Finally, employee feedback will be sought through
surveys, interviews, and focus groups to assess employee perceptions of
the fairness and integrity of the performance appraisal and pay
adjustment processes.
VIII. Costs
A. Buy-in Costs
There will be added costs resulting from the within-grade increase
``buy-in'' provision described in section V; however, those costs will
be offset to some degree by the elimination of within-grade step
increases that otherwise would have occurred.
B. Recurring Costs
All funding will be provided through the organization's budget. No
additional funding will be requested specifically for this project; all
costs will be charged to available funds through existing
appropriations, including those incurred in the areas of project
development, training, and project evaluation.
IX. Waiver of Laws and Regulations Required
A. Title 5, United States Code
Chapter 35, section 3594: Saved pay for former members of the
Senior Executive Service (only to the extent necessary to bar employees
with a rating of record lower than Fully Meets Expectations from
receiving saved rate increases under 5 U.S.C. 3594(c)(2))
Chapter 51, section 5104: Basis for grading positions.
Chapter 51, section 5106: Basis for classifying positions.
Chapter 51, section 5107: Classification of positions.
Chapter 53, section 5303: Annual adjustments to pay schedules.
Chapter 53, section 5305: Special pay authority.
Chapter 53, sections 5331-5336: General Schedule pay rates (except
that, for purposes of applying any other laws, regulations, or policies
that refer to GS employees or to subchapter III of chapter 53 of title
5, United States, Code, the modified pay system established under this
plan must be considered to be a GS pay system established under such
subchapter III; this includes, but is not limited to, references to the
General Schedule in section 5304 (relating to locality pay), section
5545(d) (relating to hazard pay), and sections 5753-5754 (dealing with
recruitment, relocation, and retention incentives))
Chapter 53, section 5362: Grade retention.
Chapter 53, section 5363: Pay retention (only to the extent
necessary to (1) replace ``grade'' with ``band'' and (2) bar employees
with a rating of record lower than Fully Meets Expectations from
receiving retained rate increases under 5 U.S.C. 5363(b)(2)(B).
Chapter 75, section 7512(34): Adverse actions (only to the extent
necessary to replace ``grade'' with ``band'').
Chapter 75, section 7512(4): Adverse actions (only to the extent
necessary to provide that adverse action provisions do not apply to (1)
conversions into the demonstration project from the General Schedule or
other pay system, as long as the employee's total rate of pay is not
reduced and (2) reductions in rates of basic pay to offset a locality
pay or staffing supplement increase as a result of receiving a rating
of record below Fully Meets Expectations.)
Note: If any of the provisions of title 5, United States Code,
listed above are amended during the period this demonstration
project is in effect, NNSA may choose to terminate the waiver of one
or more such provisions with respect to employees participating in
the project, without formally modifying the project itself. NNSA
must notify OPM when any such waiver is terminated.
B. Title 5, Code of Federal Regulations
Part 300, subpart F, section 300.604: Restrictions (only to the
extent necessary to restrict advancement to a higher pay band to
candidates who have completed a minimum of 52 weeks in positions no
more than one pay band lower than the position to be filled).
Part 330, subpart B, section 330.201: Establishment and maintenance
of Reemployment Priority List (RPL) (only to the extent necessary to
establish and maintain a reemployment priority list exclusively for
NNSA competitive service demonstration project employees).
Part 351, subpart D, section 351.402: Competitive area (only to the
extent necessary to permit the use of career paths in conjunction with
organizational units and geographic locations when establishing
competitive areas).
Part 351, subpart D, section 351.403: Competitive level (only to
the extent necessary to substitute ``same pay band'' for ``same
grade'').
Part 351, subpart G, section 351.701: Assignment involving
displacement (only to the extent necessary to substitute ``one pay
band'' for ``three grades'' and ``two pay bands'' for ``five grades'').
Part 359, subpart G, section 359.705: Pay (only to the extent
necessary to bar employees with a rating of record lower than Fully
Meets Expectations from receiving a saved rate increase under 5 CFR
359.705(d)(1)).
Part 430, subpart B, section 430.203: Definitions (only to the
extent necessary to allow an additional rating of record to support a
pay decision under C.3 or 4 of this project plan).
Part 511, subpart B: Coverage of the General Schedule.
Part 530, subpart C: Special Rate Schedules for Recruitment and
Retention.
Part 531, subpart B: Determining Rate of Basic Pay.
Part 531, subpart D: Within-Grade Increases.
Part 531, subpart E: Quality Step Increases.
Part 536, subpart B: Grade Retention.
Part 536, subpart C: Pay Retention (only to the extent necessary to
(1) replace ``grade'' with ``band'' and (2) bar employees with a rating
of record lower than Fully Meets Expectations from receiving retained
rate increases under 5 CFR 536.305.
Part 550, section 550.703: Definitions (to the extent necessary to
modify paragraph (c)(4) of the definition of ``reasonable offer'' by
replacing ``two grade or pay levels'' with ``one pay band level'' and
``grade or pay level`` with ``pay band level'').
Part 752, section 752.401(a)(3): Adverse actions (only to the
extent necessary to replace ``grade'' with ``band'').
Part 752, section 752.401(a)(4) Adverse actions (only to the extent
necessary to provide that adverse action provisions do not apply to (1)
conversions into the demonstration project from the General Schedule or
other pay system, as long as the employee's total rate of pay is not
reduced and (2) reductions in rates of basic pay to offset a locality
pay or staffing supplement rate increase as a result of receiving a
rating of record below Fully Meets Expectations).
Note: If any of the provisions of title 5, Code of Federal
Regulations, listed above are revised during the period this
demonstration project is in effect, NNSA may choose to terminate the
waiver of one or more such provisions with respect to employees
participating in the project, without formally modifying the project
itself. NNSA must
[[Page 9050]]
notify OPM when any such waiver is terminated.
[FR Doc. E7-3454 Filed 2-27-07; 8:45 am]
BILLING CODE 6325-43-P