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DCIPS FUNDING PRINCIPLE Adequate funding is necessary to ensure success of a performance-based pay system. When performance-based compensation systems operate properly, superior performers receive the greater rewards, while average performers receive substantially smaller ones. Adequate funding is critical as insufficient funding is a primary reason why these systems fail. To provide meaningful rewards, MSPB guidance advises that agencies use greater budget creativity and additional sources of revenue to ensure adequate funding for performance-based pay increases. 83 OUSD(I) policy for funding pay pools conforms to IC-wide policy guidance for pay modernization, which requires that newly-implemented performance-based compensation systems remain budget neutral. Under current policy, separate budget recommendations are established annually to fund salary and bonus pools 84 In accordance with USD(I) funding guidance, DoD intelligence components allocate money to salary increase pools by choosing and multiplying a funding percentage by the sum of the base salaries of those employees eligible for payouts. The policy requires that salary increase budgets be no less than the total funds that would have been available for step increases, quality step increases, and within-band promotions had there been no conversion to DCIPS. Similarly, the bonus budgets cannot be less than the cash awards available had DoD not converted. Pools can only be increased under special circumstances; one common reason is outstanding organizational performance or contribution to the component’s mission. Pay pools also may reserve a portion of their budget for unanticipated requirements, exceptional performance, market anomalies, or other circumstances. Although DCIPS funding conforms to IC pay modernization policy, current pay pool funding will not prove adequate over the long term to sustain meaningful payouts for all deserving employees. Consequently, the system likely will limit rewards for satisfactory (Successful level rating) employees to ensure more substantial payouts for top performers. Experts who attended the Academy’s colloquia characterize this as an unintended “win-lose” situation for most employees. MSPB’s guidance affirms that funding performance-based compensation systems based on money from existing sources typically results in some employees obtaining more than they otherwise would have and others less. MSPB notes that this discrepancy seems most problematic for the “good, solid employees” who may no longer receive regular, albeit modest, increases to recognize their contributions. 85 The alternative is to reduce awards for high performers to spread available funds more broadly; this is not desirable either as the premise of performance-based compensation is that top performers should receive greater salary increases and bonuses. 83 2006 MSPB Design <strong>Report</strong>, pp. 20-21. 84 Department of Defense Instruction Number 1400.25-V2012, DoD Civilian Personnel Management System: Defense Civilian Intelligence Personnel System (DCIPS) Performance-Based Compensation, dated January 15, 2010. 85 2006 MSPB Design <strong>Report</strong>, pp. 20-21. 48
The Panel believes that adequate funding for pay pools should be analyzed further. Other methods are available to instill confidence in DoD intelligence components and employees that funds will be available to reward solid performance. For example, OUSD(I) could consider tapping other sources to create a separate performance management fund from which to provide meaningful increases. Also, MSPB guidance suggests that it is possible for agencies to pursue other funding options, such as a working capital fund or a supplemental appropriation to support payouts for deserving employees. 86 Finding 3-9 OUSD(I)’s approach to funding salary increase and bonus pools in a budget-neutral manner will result in redistributing available funds, but may not provide adequate funding to reward performance achievements of all deserving employees. MARKET COMPENSATION FLEXIBILITY PRINCIPLE The performance-based compensation system must be sufficiently flexible and responsive to changing labor market conditions to meet the agency’s HR needs for years to come. It is difficult to anticipate the changes that can occur in an agency over time. Nonetheless, a new performance-based compensation system should include a plan to adjust the system to reflect changes in the organization and the way that the workforce is managed within it. Under DCIPS, the LMS will provide flexibility to respond to changing local market conditions. However, OUSD(I)’s approach does not appear to link to its Strategic Human Capital Plan and does not provide for adjustments that account for changes in the broader labor market. A prior Academy Panel emphasized the need for a process that enables market alignment for specific occupational groups, as necessary. 87 Finding 3-10 DCIPS does not currently include an approach for responding to the changes in the broader labor market when such changes impact compensation equity for DCIPS employees. 86 Ibid, p. 21. 87 2004 Academy Panel Design Principles Study, p. 34. 49
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A Report by a Panel of the NATIONAL
Page 3 and 4:
FOREWORD The terrorist attacks of S
Page 5 and 6:
TABLE OF CONTENTS FOREWORD.........
Page 7 and 8:
Governance ........................
Page 9 and 10:
ACRONYMS Academy CWB DCIPS DIA DIHR
Page 11 and 12: EXECUTIVE SUMMARY The terrorist att
Page 13 and 14: • It is too soon to draw conclusi
Page 15 and 16: CHAPTER 1 BACKGROUND, METHODOLOGY A
Page 17 and 18: • The adequacy of the training, p
Page 19 and 20: • Chapter 6: The Way Forward for
Page 21 and 22: CHAPTER 2 THE HISTORICAL CONTEXT FO
Page 23 and 24: National intelligence is still orga
Page 25 and 26: ewarded longevity over performance
Page 27 and 28: OTHERS FACTORS THAT IMPACTED DCIPS
Page 29 and 30: • Partisan politics could play an
Page 31 and 32: Administration (TSA), which operate
Page 33 and 34: NATIONAL DEFENSE AUTHORIZATION ACT
Page 35 and 36: CHAPTER 3 ASSESSING DCIPS’ DESIGN
Page 37 and 38: FRAMEWORK FOR ASSESSING DCIPS’ DE
Page 39 and 40: Figure 3-1. Objectives of the NICCP
Page 41 and 42: PRINCIPLE The system is transparent
Page 43 and 44: The Defense Intelligence Enterprise
Page 45 and 46: discourage teamwork…to the organi
Page 47 and 48: Figure 3-2. DCIPS 2010 Pay Band Str
Page 49 and 50: enable managers and supervisors to
Page 51 and 52: they achieve their goals. Given the
Page 53 and 54: Element Definition Supervisory/Mana
Page 55 and 56: cooperation with ODNI. The review w
Page 57 and 58: Source: OUSD(I) Human Capital Manag
Page 59 and 60: eplaces the current government-wide
Page 61: esults, but the final DCIPS evaluat
Page 65 and 66: HOW DCIPS COMPARES TO THE GS/GG SYS
Page 67 and 68: Table 3-7. Comparison of DCIPS and
Page 69 and 70: Design Feature DCIPS NSPS quality s
Page 71 and 72: Recommendation 4. To ensure equitab
Page 73 and 74: CHAPTER 4 ASSESSING DCIPS’ IMPLEM
Page 75 and 76: Table 4-1. Overview of the OPM Obje
Page 77 and 78: In the DCIPS context, “leaders”
Page 79 and 80: intelligence component would do so.
Page 81 and 82: • Credible, timely, and original
Page 83 and 84: Finding 4-5 The DCIPS website and R
Page 85 and 86: Finding 4-6 The lack of a communica
Page 87 and 88: No training needs assessments have
Page 89 and 90: pay pool exercises to be helpful an
Page 91 and 92: • The Commerce Department used fo
Page 93 and 94: 3. Implementing DCIPS; 4. Evaluatin
Page 95 and 96: created a separate document for som
Page 97 and 98: lack of an overall change strategy
Page 99 and 100: changed and by whom. 149 This appea
Page 101 and 102: How pay pools are constructed and w
Page 103 and 104: DCIPS survey results indicate that
Page 105 and 106: CONCLUSIONS The Panel finds that a
Page 107 and 108: CHAPTER 5 ASSESSING DCIPS’ IMPACT
Page 109 and 110: • Disincentives to become a super
Page 111 and 112: employees received performance rati
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Figure 5-1. DCIPS Interim Array of
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Table 5-1. NGA Indices and Comparat
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of implementation. Nonetheless, OUS
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CHAPTER 6 THE WAY FORWARD FOR DCIPS
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OUSD(I) has advised the Panel that
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CHAPTER 7 PANEL RECOMMENDATIONS Bas
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• Clarify and strengthen its guid
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Recommendation 23. OUSD(I) should d
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APPENDIX B APPENDIX A PANEL AND STA
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APPENDIX B Committee on U.S. Nation
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APPENDIX B PARTICIPATING INDIVIDUAL
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Michael Jackson*—President and Fo
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Defense Intelligence Agency Kendrea
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APPENDIX C APPENDIX C BIBLIOGRAPHY
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APPENDIX C Langbein, L. “The impa
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APPENDIX D APPENDIX D MERIT SYSTEMS
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APPENDIX D (10) Discriminating agai
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APPENDIX E APPENDIX E DCIPS PERFORM
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APPENDIX E EMPLOYEE NAME: _________
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APPENDIX E EMPLOYEE NAME: _________
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APPENDIX F APPENDIX F OPEN FORUM LO
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APPENDIX G APPENDIX G MITRE’S PER
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Report - Government Executive

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