The 2004 National Defense Authorization Act (Public Law 10-136, November 24, 2003) gives the Department of Defense (DoD) authority to establish the National Security Personnel System (NSPS). This system will mark the most significant reform to civilian personnel management in 25 years. The DoD expects to implement the NSPS in a phased approach extending over two years, and is giving consideration to the Department of the Navy being the lead service. The NSPS will be built on best practices and lessons learned from nine DoD pilot programs that have been conducted in eight laboratories and one Pentagon acquisition organization. The NSPS is being designed to simplify an overwhelming job classification system, refocus performance appraisals, and link pay and retention to employee performance. Such a dramatic change to a system that has endured for so many years is bound to pose tremendous challenges to the DoD. This thesis will explore the challenges associated with pay-for-performance and provide a series of considerations that should be addressed during the implementation process. The thesis begins by discussing the history of the civil service system and its evolution toward a pay-for-performance system, then focuses on the results of three DoD pilot programs that implemented pay-for-performance in the last 25 years. It continues by exploring the present need for civil service reform, discusses the Department's expectations for the new NSPS, and offers some insights into the preliminary implementation plan. The thesis concludes by presenting research on public sector pay-for-performance systems and makes a series of recommendations which the DoD may want to consider in the course of developing and implementing the new pay-for-performance system.

The purpose of this Joint Applied Project (JAP) is to examine and provide a thorough overview of the history of the Department of Defense's (DoD) civilian personnel system. The research will explore converting civil servants from the General Schedule (GS) pay system to the National Security Personnel System (NSPS), then converting back to the GS system. This JAP will explore the inception of the GS System and discuss the perceived advantages and disadvantages. It will also explore the reason for the change to NSPS and the enactment of NSPS through the National Defense Authorization Act for 2004. It will also discuss the effects of the transition to the new pay-for-performance system. It will then examine the concerns, perceived issues, and discuss the perceived advantages and disadvantages of NSPS. It will explore the reasons surrounding the reimplementation of the GS system and the abolishment of NSPS through the National Defense Authorization Act for Fiscal Year 2010. The data collected and analyzed will address the preferences and the perceptions from the affected employees who experienced the implementation of NSPS. It will conclude discussing these findings with suggestions for further research into the DoD's Civilian Personnel System.

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."