In 2003, the Congress authorized the Secretary of Defense to establish a human resources management system, the National Security Personnel System (NSPS), within the Department of Defense (DoD).1 That system was authorized at the request of DoD, which had complained of inflexibilities in the traditional federal personnel system.2 The department claimed that with its constraining rules in hiring, assigning, compensating, and rewarding employees, the traditional system was cumbersome even during normal peacetime operations; during wartime, when the system faced additional stresses, it was more problematic. According to senior DoD officials, civilian employees an integral resource in the global war on terrorism would be more valuable if the human resources system were more "modern, flexible, and agile."

The objective of this report is to examine the extent to which NSPS has achieved, or has the prospect of achieving, the most salient goals stated in the National Defense Authorization Act which created it. In examining key changes in NSPS, this report drew on the experience of past personnel experiments within DoD and the rest of the federal government. Implementation of the new system is not complete, and sufficient time has not yet elapsed since the first employees were converted to accumulate an adequate amount of useful data. As a result, the CBO limits its assessment to the particular NSPS goals for which some data are available. (Originally published by the Congressional Budget Office)

Provides answers to these questions from Solomon Ortiz, U.S. House of Rep.: (1) What steps could have been taken to roll out NSPS in a more orderly and fair fashion and if NSPS continues, what steps should now be taken to move forward? (2) As DoD and OPM leadership hold discussions to determine the overall framework, scope, and timeline of the review, what guidance or suggestions would you give to DoD and OPM to include in the methodology of this study? (3) Under the GS system, an employee steadily moves up through the various grades and can monitor career progression. There appears to be no such similar movement in NSPS; an employee, while receiving pay increases and bonuses, may remain in the same pay band for his/her entire career. If this is a valid concern, how can it be addressed?

This strategic research project compared characteristics of organizations where pay for performance concepts worked well over time with that of the Department of Defense (DoD) National Security Personnel System (NSPS) to identify whether those same characteristics were present in today's federal environment. The results of the comparison of characteristics was complimented with empirical frameworks of (a) the history of DoD pay for performance concepts, specifically the Civil Service Reform Act, (b) employee perceptions of NSPS, and (c) other considerations as further legitimacy to the ideology that NSPS is successfully designed for failure. The literature review confirmed that a DoD cultural shift should occur to enact success of a civilian pay for performance system. Replicating the NSPS theory with cultural diversity and action includes (a) championing from the top, (b) improving current foundations of the pay pool funds, (c) replacing five-tiered rating scales with three-tiered rating scales, (d) prescribing simple and consistent pay increases for role models that are 2.5 times higher than the average valued performer, (e) instituting faster promotions, higher bonus awards, and quality recognition of role models, and (f) affording leadership resources to conduct swift and certain poor performer terminations

The Deputy Secretary of Defense, William J. Lynn III, asked the Defense Business Board to form a Task Group to review the NSPS. The Deputy directed the Task Group to deliver recommendations aimed at helping the Department determine: 1. If the underlying design principles and methodology for implementation are reflected in the program objectives; 2. Whether the program objectives are being met; and 3. Whether NSPS is operating in a fair, transparent, and effective manner. The Task Group was also asked to provide specific recommendations on policy and/or program changes.

This is a print-on-demand publication; it is not an original. In 2007, the Under Secretary of Defense for Intelligence began developing a human capital system -- called the Defense Civilian Intelligence Personnel System (DCIPS) -- to manage Dept. of Defense (DoD) civilian intelligence personnel. This report examined the extent to which DoD has: (1) incorporated internal safeguards into DCIPS and monitored the implementation of these safeguards; and (2) developed mechanisms to identify employee perceptions about DCIPS. The report analyzed guidance, interviewed appropriate officials, and conducted discussion groups with employees at select DoD components. Includes recommendations. Charts and tables.