Report - Government Executive

PRINCIPLE
The system is transparent and easy for managers and employees to understand.
Simplicity and ease of understanding are key to a well-designed performance-based
compensation system. Managers and employees alike must understand what the system’s goals
are, what they can expect from the system, what is required of them to succeed, and how they
will be rewarded. Results from a 2008 study 48 of best practices and lessons learned
commissioned by the ODNI Director of Intelligence Staff confirmed that overly complex
systems are less likely to gain acceptance and are more likely to risk failure. GAO was cited as
an example of an agency whose complex pay process contributed to perceptions of unfairness.
Employees never fully understood how their annual increases were determined due to the
complexity of the formula by which ratings were translated into actual increases.
The DCIPS’ policies and guidance that describe the overall design of the system are generally
clear and easy to understand. For the performance-based compensation system, governing
policies have been developed and supplemented with clearly written guidance that is available to
all employees, managers, and HR staff affected.
Although the manner in which these policies have been implemented (as discussed in Chapter 4)
has caused employees to question the transparency of the system, this does not alter the Panel’s
belief that the fundamental design of the system is transparent and relatively easy to understand.
It is the implementation of the policies that has led to confusion, more so than the actual content
or intent of those policies.
In addition, the lack of policies and procedures for several major elements of the system has
adversely impacted employees’ perceptions of DCIPS’ transparency. Most policies have been
drafted and are in various stages of review and approval. However, the lack of finished policies
in critical areas, especially those affecting career progression and pay administration (both of
which are linked to performance), has generated a great deal of confusion among the workforce
and has undermined the system’s transparency and credibility. For example, in the open forums
and online dialogue, employees expressed major concerns about the absence of clear policies
governing advancement from one pay band to another.
Another critical gap is the lack of a formal policy for considering an employee’s “highest
previous rate” (HPR). 49 Although OUSD(I) officials indicated that they did not intentionally
eliminate the use of HPR, the unavailability of this tool has reportedly disadvantaged certain
employees who held higher salaries prior to conversion to DCIPS.
Academy interviews, focus groups, and the online dialogue indicate that some employees have
lost confidence and trust in DCIPS because they are unable to obtain answers, or consistent
48 Pay for Performance (PFP) Implementation Best Practices and Lessons Learned Research Study, Booz Allen
Hamilton, June 18, 2008.
49
Highest previous rate means the highest actual rate of basic pay previously received, or the actual rate of basic pay
for the highest grade and step previously held, by an individual, depending on the position in which the individual
was employed. [5 CFR 531.202]
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