Report - Government Executive

• Partisan politics could play an increasing role in the bureaucracy, which could have a
potential impact on the “neutral competence” of the public service;
• Giving managers additional flexibility to set pay can aggravate existing biases in the
system;
• The GS pay system can accomplish all of the goals of performance-based compensation
without the disruption; and
• Most (performance-based compensation) plans share two attributes: They absorb vast
amounts of management time and resources, and they make everybody unhappy. 23
On balance, both sides of the argument for and against performance-based compensation have
merit. In any event, the Panel believes that a decision to implement such a system must be
weighed very carefully, and a decision to move forward must be made in the context of what is
most appropriate for the mission and environment of the agency.
National Security Personnel System
Attempts to implement performance-based personnel systems at the Department of Homeland
Security, and more recently, at the DoD itself, have met with little success. At the time of
writing, Congress had terminated DoD efforts to adopt a performance-based compensation
system, the National Security Personnel System (NSPS), which would have applied to
employees of non-intelligence components. 24 It is in this environment that DCIPS
implementation is taking place, and as such, the Panel has examined the key similarities and
differences between DCIPS and NSPS. Although these two systems share some features, they
differ significantly, as discussed in Chapter 3.
Congress provided authority for DoD to develop the system and implementation began in 2006;
NSPS replaced the GS grade and step system with a pay band system intended to provide a more
flexible, mission-based approach that linked individual performance to mission and
organizational goals. NSPS created new policies for establishing pay levels, tenure, hiring,
reassignment, promotion, collective bargaining, pay, performance measurement, and recognition.
The 2003 legislation authorizing NSPS included highly controversial provisions dealing with
labor management issues that resulted in federal litigation. The courts eventually decided in
favor of DoD which, over unions’ objections, continued with its implementation plans.
By 2009, some 211,000 DoD non-intelligence employees were covered under this new system.
Union opposition remained strong, however, and Congress reversed the labor management
decisions in 2008. By then, the relationship between DoD and its labor unions was characterized
by one union official as follows:
23 William Mercer, Leader to Leader, Winter 1997, p. 611.
24 The National Defense Authorization Act for Fiscal Year 2010, Pub. L. No. 111-84, section 1114, 2009.
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