Issue Briefs

The Defense Department recently released an evaluation of NSPS conducted earlier this year that concluded that the system was “imperfect but improving.” The report made recommendations for NSPS which, in light of the ongoing phaseout of the program, said can serve as guidance for efforts to create substitute policies in many of the same areas as ordered by last year’s law ordering the end of NSPS. Following are those recommendations.

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Maintain and expand training opportunities. Sustainment training can focus on what is new and what is most essential. Some lessons are better appreciated with the perspective of experience, and sustainment training can help drive those points home. Last year’s recommendations called for easy reference guides, checklists, process flow graphics, timelines, and other learning aids. Such devices would be particularly helpful for the new version of the PAA (version 3), for enhancing use of performance indicators and benchmarks, and as basic reminders for busy people.

Many of this year’s calls for additional training reflect a broadening of perspectives. Employees requested training across all roles, including training on their supervisor’s responsibilities.

Mock pay pool training has been expanded to managers and supervisors not only to provide managers and supervisors understanding of the panel process to which they contribute ratings and assessments, but also to ensure the availability of trained panel members. This increased exposure has led to even more requests for mock pay pool training for all employees, and such training can increase the transparency of the poorly understood pay pool process and address such outstanding questions as the determination of salary/bonus splits.

Broadening the base for training reflects a move from program infancy in which training is focused on essentials to greater maturity where training can adopt a wider scope. This breadth reflects a readiness for greater understanding, but with that come higher expectations.

Both pay pool panels and employees will demand more of supervisors and higher level reviewers in terms of justifying the ratings they assign. Employees will understand that they must support their supervisors by providing thorough self-assessments – and, indeed, there is continued demand for the earliest NSPS training in writing self-assessments and objectives. A frequent request is for more specific and more actionable supervisor feedback. Employees are eager for information on how to improve, and they want the supervisors who rate them to be held accountable. Supervisors need the support of training focused on giving substantive feedback in both the interim and final reviews.

Provide guidance on career progression. Employees need specific instructions concerning developing career goals, how to look for reassignment and promotion opportunities, and assessing which opportunities would be most beneficial given their goals. Employees who moved to NSPS from GS came from a world in which step increases happened automatically – and, in developmental programs even promotions occurred on a dependable schedule. In contrast, NSPS pay bands and performance‐based salary progression create an unfamiliar environment where employees must be proactive in managing their careers. Further, the lack of more frequent promotions in NSPS removes a familiar and acknowledged measure of progress. At the same time, there are fewer role models because supervisors, managers, and other mentors may also be new to pay bands.

Expand discussion of performance to enhance rating consistency and pay pool transparency. Many of the complaints about NSPS involve pay pools: they are too time-consuming for senior managers, panels change supervisors’ ratings without sufficient justification, funding and share values differ across pay pools, and, in general, they lack transparency. In a system in which performance ratings drive payouts, ensuring fair performance ratings within a pay pool is fundamentally important. Most performance review authorities, senior managers who participate on panels, and others who view the pay pool panel process in its entirety, which often begins with detailed work by sub‐pay pool panels, think that the functions are carefully executed. Employees and many supervisors see the process as not transparent and ineffective in its role of ensuring fairness.

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NSPS pay pools review self- and supervisor assessments to ensure that performance is consistently rated, assign shares related to ratings that drive payouts, and determine salarybonus splits. Pay pools conduct their reviews of ratings after an HLR has approved the supervisor’s ratings. If the HLR’s approval is a sign to employees and supervisors of the original rating’s correctness, any panel changes, in spite of their having a broader, pay pool-wide perspective, are problematic for both employees and for the supervisors called on to defend their ratings. One suggested improvement was to strengthen the role of the HLR in reviewing assessments and ratings. Another was to examine the composition of pay pools and consider, for example, pay pools with exclusively Band 3 employees. Focusing a pay pool panel on a single band could help ensure that objectives are written at appropriate levels and are fairly rated across the peer group.

There are other ways to approach the pay pool’s function. One approach begins with a series of meetings that involve the HLR with all of the rating officials whose ratings that HLR reviews.

Rating officials come to these meetings with completed assessments, preliminary ratings, and recommended numbers of shares. The purpose of the meeting is to review each employee’s rating against the rating standards as they relate to the organization’s mission. This approach involves the rating officials in a broader context from the very beginning to ensure their understanding of the performance indicators, contributing factor benchmarks, and ratings as applied to the organization’s work. These meetings of the HLR with his or her rating officials are followed by meetings at the next level with all the HLRs who report to the same manager to review summary statistics and recommended shares for the lower level ratings, and, if needed, request further reviews or changes. In addition, the meetings review the HLRs’ ratings of the rating officials in their reporting chain. The managers who conduct these meetings are likely at the level of NSPS pay pool panel members. The pay pool manager works with the panel to review and approve all ratings and recommended shares. The difference between this process and current NSPS pay pools is the involvement of rating officials from the beginning in group discussions of ratings. This approach improves their understanding of the meaning of each rating level and helps ensure their buy‐in. They also gain perspective through talking to other rating officials, including experiencing positive peer pressure. While it may be time intensive initially, participants gain and understanding and future meetings are more efficient.

Clearly, the pay pool process works best if it begins with a shared understanding of how the rating standards relate to the organization’s work. That is the distinguishing feature of another approach to what might be better called “rating pools.” This approach begins with efforts to ensure rater calibration or rating consistency. Such efforts at the beginning to discuss performance and ratings can avoid gaming behaviors such as overrating one’s employees to avoid their receiving less pay if another rating official overrates his employees. Rating consistency meetings – held throughout the performance year, with emphasis on initial discussions, interim reviews, and preparing for final ratings – are a forum for discussing performance expectations, accomplishments, questions, and borderline cases. With such an initial approach, and careful oversight by reviewers, pay pool panels receive final ratings and concentrate solely on pay decisions. This approach can also permit quicker feedback on ratings in advance of payout results.

All of these approaches achieve the same end – fair ratings within the pay pool. They differ in the extent and quality of the participation of the rating officials and the expectation that they will rate consistently across their employees. They also differ in the role of the pay pool panel – rating oversight enforcer versus a mechanism for ensuring fair pay given ratings that have been generated by a process that builds in organization-wide rating consistency from the bottom up.

They also differ in terms of the transparency of the final result.

Eliminate contributing factors. Both employees and supervisors argue that eliminating contributing factors would save employee time in separately describing them, save supervisor time in writing assessments, and save the pay pool panel’s time in review and decision making.

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They believe that the case for an increase from a contributing factor can simply be written for a higher rating; that is, instead of justifying a rating of 3 plus 1 from a contributing factor, justify a 4. The same argument works for negative contributing factors, which are a small percent of the total number of contributing factor changes.

Enhance communication. Communication continues to be critical at every level as organizations improve alignment of goals and understanding of the organization’s mission.

NSPS, with individual objectives aligned to mission, reliant on feedback to improve performance, and requiring judgments on ratings and shares, is very different from the formula-based GS system. Aligned objectives require communication concerning the organization’s goals and the supervisor’s expectations, useful feedback requires substantive employee‐supervisor exchanges, and employee understanding of individual ratings and payouts requires information on the organization’s overall ratings and payouts. These communication requirements are ongoing – they are not just part of launching NSPS. And as employees benefit from enhanced communication, they are likely to want more.

Demonstrate management ownership. Support for front line supervisors and pay pool members must be evident throughout the chain of command. The site visits indicated support at senior levels, but support declined with movement down the management chain. Alignment of goals, emphasis on performance, and pay setting flexibilities help managers and supervisors do their jobs. NSPS is not a performance management, compensation, or hiring program that belongs to the human resources group. It must be embraced and espoused by executives, senior managers, and managers. Indeed, while NSPS can certainly also help supervisors do their jobs, they, along with panel members, bear the burden of increased workloads. Supervisors need support from their management, training, reasonable numbers of employees for whom they are responsible, and their own positive attitudes.

Maintain distinctions in ratings. A 3 rating – valued contributor – which necessarily encompasses a broad range of performance, might be more tolerable if the 3s were not grouped with others whom many employees feel are 2s. Supervisors need training on any special documentation or counseling requirements for assigning 2 ratings. An increasing number of managers give a 3 rating with one share as a message that performance is in the lower part of the 3 range. However, employees are less likely to know the number of shares than the rating. Including as 3s those whom they feel are not carrying their load seems to some employees like a failure to hold both the supervisor and the problematic employee accountable.