A House subcommittee heard testimony this week about the pay-for-performance program many love to hate, the National Security Personnel System (NSPS). OhMyGov! has written extensively about NSPS, including an exclusive investigative report into its implementation at one Department of Defense (DoD) agency.
NSPS, now in its third year of implementation, replaced the traditional General Schedule (GS) pay and classification system for certain Defense Department employees. The Bush administration wanted to see the pay-for-performance component replicated throughout the federal government. It has been the target of sharp criticism by employees and their unions.
The Government Accountability Office (GAO) joined that chorus of criticism with a new report released at the hearing this week. Although they did give credit to the DoD for progress on many of the key safeguards GAO had identified in September 2008, they identified three critical areas that threaten the reliability of NSPS as it is implemented currently.
First, GAO says that DoD lacks a process to determine whether NSPS rating results are fair before they are finalized because it does not require a third party to analyze the ratings results for anomalies. DoD rejected this recommendation, citing concerns that employees would perceive that pay pool panels adjusted their results to create a more ideal “bell curve” distribution.
The GAO report also finds that NSPS does not provide adequate transparency over its rating results. DoD distributes aggregate data, but GAO said that without transparency over actual rating and share distributions, employees might believe they are not being rating fairly which ultimately can undermine their confidence in the system.
Finally, the NSPS implementation lacks meaningful distinctions in employee performance. The NSPS guidance emphasizes that most employees should be evaluated as a “3” on a scale of 1 to 5. Pay pool members acknowledged that there was a hesitancy to award employee ratings in categories higher or lower than 3. The GAO report gave credit to DoD for agreeing with the recommendation to encourage pay pools and supervisors to use all categories of ratings as appropriate, but said that DoD had not yet taken any action to implement the recommendation.
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