Pentagon Scales Down, Pushes Back Introduction of Performance-Based Pay System

By Stephen Barr

Wednesday, January 18, 2006; Page B02

The Pentagon has adjusted its timetable for a new performance-based pay system and reduced the number of employees in the first phase from 65,000 to 11,000, officials announced yesterday.

The first phase of the new National Security Personnel System had been scheduled for rollout next month, but the launch deadline has been pushed back to April 30. Some parts of the Defense Department that have job rating cycles ending in March, such as the Air Force, may move employees into the NSPS sooner than April 30.

Feedback from employees, managers and union leaders showed that the initial plan for measuring and managing the job performance of employees was too complicated and difficult to understand. Officials also were concerned that they needed more time to provide proper training on the new system.

"Since it is affecting people's pay, they have a right to completely understand it," said Mary E. Lacey , the program's executive officer.

The delay also may ease some of the uncertainty surrounding the NSPS launch that has been created by a lawsuit filed by unions in November. The suit challenges NSPS rules that curb union rights. A hearing has been set for Jan. 24 in federal court.

As a practical matter, it had appeared unlikely that the NSPS could move forward in February if a major part of the plan -- reducing union power in the workplace -- was tied up in litigation. If the lawsuit drags on, key parts of the NSPS could be held up for many more months. A similar lawsuit brought by unions has delayed the start of a new pay system at the Department of Homeland Security by two years.

The Defense plan jettisons the decades-old General Schedule, which provides predictable pay raises, for a performance-based system that more rigorously links raises to job ratings. The changes will eventually affect about 650,000 Defense workers.

In a statement yesterday, NSPS officials said employee and union feedback "led us to conclude we need more time to focus on simplifying the performance management design, getting performance objectives right, and ensuring the system is simple, clear, and understandable."

The first wave of employees entering the NSPS will not include workers covered by union contracts, according to a revised list released yesterday.

John Gage , president of the American Federation of Government Employees, called the revised list "a good thing. We have been suggesting that they try it first on management," he said.

Gage, who has traveled across the country trying to rally Defense workers against the NSPS, said: "It is clear that they are not ready to implement such a far-reaching system."