Civilian Employees to Receive Equal Base Salary Increases

By Fred W. Baker III
American Forces Press Service

Sept. 29, 2009 - Defense Department employees paid under the National Security Personnel System will receive the same base salary increases this year as their General Schedule counterparts, a Defense Department official said today. The move comes as senior Defense Department, Office of Personnel Management and White House officials work to determine the future of the troubled pay-for-performance system.

Most under the NSPS last year actually received about the same pay increases as they would have under the general schedule, said Brad Bunn, the Defense Department's executive officer for NSPS. But a report this summer by the Defense Business Board found the system's "pay pool" process complicated and confusing for most employees.

Employees questioned the assessment and evaluation process and didn't understand the pay pool process, Bunn said in at interview at the Pentagon.

Last year, a portion of the money allotted for base-salary increases was placed into the overall pay pool, which is then divided among those in the pool based on performance ratings. This year, no money allotted for base-salary increases will go into the pool, Bunn said.

Employees under the NSPS system who receive a satisfactory performance rating of 2 or higher will receive a salary increase equal to their GS counterparts. Those who receive an unsatisfactory rating of 1 will not receive a base salary increase.

Defense officials felt this was the most "prudent course of action," given the problems reported with the NSPS, Bunn said.

Because most in NSPS received about the same raise as they would have otherwise, this move will not significantly reduce the amount of funds used to reward performance, Bunn said.

"Most employees were getting [an equal pay increase], so paying it out as an across-the-board increase would not have a huge impact on our ability to still recognize and reward those high performers," he said.

Those funds come from pots that were used for step increases, promotions between grades, and cash bonuses under the general schedule. No changes are planned this year in how performance-based awards are paid.

Future changes to the NSPS need to tie an employee's performance rating more clearly to any subsequent salary increase, Bunn said.

"It's about making the system better -- making it more credible for the employees," he said.

About 205,000 of the 865,000 Defense Department civilians are in NSPS. The department stopped the conversion of GS employees to NSPS in March.

The amount of the base salary increase will not be known until the president signs an executive order implementing the 2010 pay adjustment.