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									federal register
                   Thursday
                   March 13, 1997




                   Part III

                   Office of Personnel
                   Management
                   Proposed Laboratory Personnel
                   Management Demonstration Project;
                   Missile Research, Development and
                   Engineering Center, Department of the
                   Army, U.S. Army Missile Command
                   (MICOM), Redstone Arsenal, Alabama;
                   Notice




                                                       11981
11982               Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices

OFFICE OF PERSONNEL                        ADDRESSES:  Comments may be mailed to      Appendix D: Benchmark Performance
MANAGEMENT                                 Fidelma A. Donahue, U.S. Office of            Standards
                                           Personnel Management, 1900 E Street,       I. Executive Summary
Proposed Laboratory Personnel              NW, room 7460, Washington, DC 20415;
Management Demonstration Project;          public hearing will be held at the U.S.       This project was designed by the
Missile Research, Development and          Army Missile Command, Sparkman             Department of the Army, with
Engineering Center, Department of the      Auditorium, Martin Road, Building          participation of and review by the
Army, U.S. Army Missile Command            5304, Redstone Arsenal, Alabama.           Department of Defense (DoD) and the
(MICOM), Redstone Arsenal, Alabama                                                    Office of Personnel Management (OPM).
                                           FOR FURTHER INFORMATION CONTACT:   (1)     The purpose of the project is to achieve
AGENCY: Office of Personnel                On proposed demonstration project: Dr.     the best workforce for the MRDEC
Management.                                William H. Leonard, U.S. Army Missile      mission, adjust the workforce for
ACTION: Notice of Intent to Implement      Command, ATTN: AMSMI–RD,                   change, and improve workforce quality.
Demonstration Project.                     Redstone Arsenal, AL 35898–5400, 205–         The foundations of this project are
                                           876–1442; (2) On proposed                  based on the concept of linking
SUMMARY: Title VI of the Civil Service     demonstration project and public           performance to pay for all covered
Reform Act, 5 U.S.C. 4703, authorizes      hearing: Fidelma A., Donahue, U.S.         positions; simplifying paperwork and
the Office of Personnel Management         Office of Personnel Management, 1900 E     the processing of classification and
(OPM) to conduct demonstration             Street, NW, Room 7460, Washington,         other personnel actions; emphasizing
projects that experiment with new and      DC 20415, 202–606–1138.                    partnerships among management,
different personnel management                                                        employees, and unions representing
concepts to determine whether such         SUPPLEMENTARY INFORMATION:     Since
                                                                                      covered employees; and delegating
change in personnel policy or              1966, many studies of Department of
                                                                                      classification and other authorities to
procedures would result in improved        Defense (DoD) laboratories have been
                                                                                      line managers. Additionally, the
Federal personnel management.              conducted on laboratory quality and
                                                                                      research intellect of the MRDEC
   Public Law 103–337, October 5, 1994,    personnel. Almost all of these studies
                                                                                      workforce will be revitalized through
permits the Department of Defense          have recommended improvements in
                                                                                      the use of expanded opportunities for
(DoD), with the approval of the OPM, to    civilian personnel policy, organization,
                                                                                      employee development. These
carry out personnel demonstration          and management. The proposed project
                                                                                      opportunities will reinvigorate the
projects generally similar in nature to    involves simplified job classification,
                                                                                      creative intellect of the research and
the China Lake demonstration project at    paybanding, streamlined hiring
                                                                                      development community.
DoD Science and Technology (S&T)           processes, pay-for-performance                Development and execution of this
Reinvention Laboratory sites. The Army     management system, expanded                project will be in-house budget neutral,
is proposing five demonstration sites      developmental opportunity, and             based on a baseline of September 1995
initially: the Army Research Laboratory,   modified Reduction-In-Force (RIF)          in-house costs and consistent with the
U.S. Army Waterways Experiment             procedures.                                Department of the Army (DA) plan to
Station, Medical Research Materiel         Office of Personnel Management.            downsize laboratories. Army managers
Command, the Missile Research,             James B. King,                             at the DoD S&T Reinvention Laboratory
Development and Engineering Center,        Director.                                  sites will manage and control their
and the Aviation Research,                                                            personnel costs to remain within
                                           Table of Contents
Development, and Engineering Center.                                                  established in-house budgets. An in-
This proposal is for the Missile           I. Executive Summary                       house budget is a compilation of costs
Research, Development, and                 II. Introduction                           of the many diverse components
                                              A. Purpose
Engineering Center (MRDEC).                   B. Problems with the Present System
                                                                                      required to fund the day-to-day
DATES: To be considered, written                                                      operations of a laboratory. These
                                              C. Changes Required/Expected Benefits
comments must be submitted on or              D. Participating Organization           components generally include pay of
before May 20, 1997; a public hearing         E. Participating Employees              people (labor, benefits, overtime,
will be scheduled as follows: Tuesday,        F. Labor Participation                  awards), training, travel, supplies, non-
April 29, 1997, at 10:00 a.m. in              G. Project Design                       capital equipment, and other costs
Redstone Arsenal, Alabama. At the time        H. Personnel Management Board           depending on the specific function of
of the hearings, interested persons or     III. Personnel System Changes              the activity.
organization may present their written        A. Broadbanding                            This project will be under the joint
                                              B. Pay-for-Performance Management       sponsorship of the Assistant Secretary
or oral comments on the proposed
                                                 System
demonstration project. The hearing will       C. Classification
                                                                                      of the Army for Research, Development
be informal.                                  D. Hiring and Appointment Authorities   and Acquisition and the Assistant
   Anyone wishing to testify should           E. Employee Development                 Secretary of the Army for Manpower
contact the person listed under FOR           F. Revised Reduction-in-Force (RIF)     and Reserve Affairs. The Commander,
FURTHER INFORMATION CONTACT, and state           Procedures                           U.S. Army Materiel Command, will
the hearing location, so that OPM can      IV. Training                               execute and manage the project. Project
plan the hearings and provide sufficient   V. Conversion                              oversight within the Army will be
time for all interested persons and        VI. Project Duration                       achieved by an executive steering
organizations to be heard. Priority will   VII. Evaluation Plan                       committee made up of top-level
                                           VIII. Demonstration Project Costs
be given to those on the schedule, with    IX. Required Waivers to Laws and
                                                                                      executives, co-chaired by the Deputy
others speaking in any remaining                 Regulations                          Assistant Secretary of the Army for
available time. Each speaker’s             Appendix A: Occupational Series by
                                                                                      Research and Technology and the
presentation will be limited to ten              Occupational Family                  Deputy Assistant Secretary of the Army
minutes. Written comments may be           Appendix B: Project Evaluation and         (Civilian Personnel Policy)/Director,
submitted to supplement oral testimony           Oversight                            Civilian Personnel. Oversight external to
during the public comment period.          Appendix C: Performance Elements           the Army will be provided by the
                     Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices                                  11983

Department of Defense and the Office of       builds stagnation in the workforce and       appointment, promotion, reassignment,
Personnel Management.                         wastes valuable time.                        change to a lower grade or where their
                                                                                           functions and positions have been
II. Introduction                              C. Changes Required/Expected Benefits
                                                                                           transferred into the laboratory) will be
A. Purpose                                      This project is expected to                converted to the demonstration project.
                                              demonstrate that a human resource            Successor organizations which may
   The purpose of the project is to           system tailored to the mission and           result from actions associated with the
demonstrate that the effectiveness of         needs of the MRDEC will result in: (a)       1995 Base Realignment and Closure
Department of Defense (DoD)                   Increased quality in the total workforce     Commission will continue coverage in
laboratories can be enhanced by               and the products they produce; (b)           the demonstration project.
allowing greater managerial control over      increased timeliness of key personnel
personnel functions and, at the same          processes; (c) increased retention of        F. Labor Participation
time, expanding the opportunities             high quality employees and separation          The American Federation of
available to employees through a more         rates of poor quality employees; and (d)     Government Employees (AFGE)
responsive and flexible personnel             increased customer satisfaction with the     represents many GS employees at
system. The quality of DoD laboratories,      MRDEC and its products by all                MRDEC. The MRDEC is continuing to
their people, and products has been           customers it serves.                         fulfill its obligations to consult and/or
under intense scrutiny in recent years.         The MRDEC demonstration program            negotiate with the AFGE, in accordance
This perceived deterioration of quality       builds on the successful features of         with 5 U.S.C. 4703 (F) and 7117. The
is due, in substantial part, to the erosion   demonstration projects at China Lake         participation with the AFGE is within
of control which line managers have           and the National Institute of Standards      the spirit and intent of Executive Order
over their human resources. This              and Technology (NIST). These                 12871.
demonstration, in its entirety, attempts      demonstration projects have produced           The AFGE represents all professional
to provide managers, at the lowest            impressive statistics on the job             and nonprofessional employees except
practical level, the authority, control,      satisfaction for their employees versus      those who are supervisors or managers.
and flexibility needed to achieve quality     that for the federal workforce in general.   AFGE Local 1858 has been involved
laboratories and quality products.            Therefore, in addition to expected           with and has participated in the
                                              benefits mentioned above, the MRDEC          development of the project since its
B. Problems With the Present System                                                        inception. The union is an integral part
                                              demonstration expects to find more
   The MRDEC products contribute to           satisfied employees on many aspects of       of this personnel demonstration and
the readiness of U.S. forces and to the       the demonstration including pay equity,      will be a full partner in arriving at major
stability of the American economy. To         classification decisions, and career         decisions involving program
do this, the MRDEC must acquire and           development opportunities. A full range      implementation.
retain an enthusiastic, innovative, and       of measures will be collected during         G. Project Design
highly educated and trained workforce,        project evaluation (Section VII).
particularly scientists and engineers.                                                        An Integrated Process Team approach
                                              D. Participating Organization                was used at the U.S. Army Missile
The MRDEC must be able to compete
with the private sector for the best talent     MRDEC has approximately 1881               Command to develop the attributes of
and be able to make job offers in a           employees covered by the project.            this personnel demonstration proposal.
timely manner with the attendant              Approximately 99 percent of the              The team was lead by MRDEC
bonuses and incentives to attract high        employees are located at Redstone            management, and team members came
quality employees. Today, industry            Arsenal, Alabama, with the remaining         from managers and associates from the
laboratories can make an offer of             located at the following sites: Andover,     MRDEC, AFGE Local 1858, the Civilian
employment to a promising new hire            Massachusetts; Tucson, Arizona;              Personnel Office, and several other
before the government can prepare the         Orlando, Florida; and Dallas, Texas.         major functional organizations within
paperwork necessary to begin the                                                           the Missile Command.
                                              E. Participating Employees                      This personnel system design has
recruitment process.                            The demonstration project includes         been subjected to critical reviews by
   Currently, jobs are described using a      civilian appropriated funded employees       Executive Steering Groups within the
cumbersome classification system that         in the competitive and excepted service      MRDEC and the Missile Command.
is overly complex and specialized. This       paid under the General Schedule (GS)         Additionally, negotiations with AFGE
hampers a manager’s ability to shape the      pay systems. Scientific and Technical        Local 1858 have influenced the design
workforce and match the positions             (ST) employees will be included for          in areas of significant concern to
while making best use of employees.           employee development, performance            bargaining unit employees. A survey,
Managers must be given local control of       appraisal, and award provisions only;        designed by AFGE Local 1858, was
positions and their classification to         their classification, staffing, and          conducted to elicit RDEC employee
move both their employees and                 compensation, however, will not              opinions and preferences on key
vacancies within their organization to        change. Senior Executive Service             features of the proposal.
other lines of the business activities to     employees, Federal Wage System                  The design was preceded by an
match the life cycle needs of supported       employees, and employees in the              exhaustive study of broadbanding
customers.                                    Quality Assurance Specialist                 systems currently practiced in the
   These issues work together to hamper       (Ammunition Surveillance) (QASAS)            Federal sector. A first generation design
supervisors in all areas of human             career program will not be covered in        was briefed to the MRDEC workforce
resource management. Hiring                   the demonstration project. Additionally,     with the assistance of AFGE Local 1858.
restrictions and overly complex job           DA interns will not be converted to the      During these briefing sessions,
classifications, coupled with poor tools      demonstration until they complete their      employees were provided a copy of the
for rewarding and motivating employees        intern program. Personnel added to the       first generation proposal, a set of
and a system that does not assist             laboratory in like positions covered by      anticipated questions and answers, and
managers in removing poor performers          the demonstration (either through            a list of points of contact for concerns
11984                Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices

and questions. Later design generations      consideration of the business practices     overlap, similar to the current overlap
have evolved from critical reviews by        at the MRDEC. The common patterns of        between GS grades, will be maintained.
headquarters elements of the                 advancement within the occupations as          Ordinarily an individual will be hired
Department of the Army, Department of        practiced at DoD Laboratories and in the    at the lowest salary in a payband.
Defense, and the Office of Personnel         private sector will also be considered.     Exceptional qualifications, specific
Management. Additionally, consultation       The current occupations and grades          organizational requirements, or other
was provided by the designers of the         have been examined, and their               compelling reasons may lead to a higher
broadbanding systems practiced by the        characteristics and distribution have       entrance level within a band.
Navy China Lake experiment and the           served as guidelines in the development        The proposed paybands for the
National Institute of Standards and          of the four occupational families           occupational families and how they
Technology.                                  described below:                            relate to the current GS grades are
                                                1. Engineers and Scientists (E&S).       shown in Figure 1. Application of the
H. Personnel Management Board                                                            Fair Labor Standards Act (FLSA) within
                                             This occupational family includes all
   The MRDEC intends to establish an         technical professional positions, such as   each payband is also shown in Figure 1.
appropriate balance between the              engineers, physicists, chemists,            This payband concept has the following
personnel management authority and           metallurgists, mathematicians, and          advantages:
accountability of supervisors and of the     computer scientists. Predominantly,            1. It may reduce the number of
oversight responsibilities of a Personnel    specific course work or educational         classification decisions required during
Management Board (PMB). The Director         degrees are required for these              an employee’s career.
will delegate management and oversight       occupations.                                   2. It simplifies the classification
of the Project at MRDEC to a Personnel          2. E&S Support. This occupational        decision-making process and
Management Board whose members,              family contains positions that directly     paperwork. A payband covers a larger
Chairperson, and staff will be appointed     support the E&S mission: it includes        scope of work than a grade, and thus
by the Director. The union may provide       specialized functions in such fields as     will be defined in shorter and simpler
a representative to observe all              technical information management,           language.
deliberations of the PMB, and this                                                          3. It supports delegation of
                                             librarians, equipment specialists,
representative may vote on those issues                                                  classification authority to line managers.
                                             quality assurance, and engineering and         4. It provides a broader range of
that are not exclusively management          electronics technicians. Employees in
responsibilities. The PMB will be tasked                                                 performance-related pay for each level.
                                             these jobs may or may not require           In many cases, employees whose pay
with the following:                          college course work. However, training
   1. Overseeing the civilian pay budget,                                                would have been frozen at the top step
                                             and skills in the various electrical,       of a grade will now have more potential
   2. Determining the composition of the     mechanical, chemical or computer crafts
pay-for-performance pay pools in                                                         for upward movement in the broader
                                             and techniques are generally required.      payband.
accordance with the guidelines of this          3. Business Management. This
proposal and internal procedures,                                                           5. It prevents the progression of low
                                             occupational family contains                performers through a payband by mere
   3. Administering funds allocation to
                                             specialized functions in such fields as     longevity, since job performance serves
pay pool managers,
                                             finance, procurement, accounting,           as the basis for determining pay.
   4. Reviewing operation of MRDEC pay
                                             administrative computing, and                  The MRDEC broadbanding plan
pools,
   5. Reviewing hiring and promotion         management analysis. Analytical ability     expands the broadbanding concept used
salaries as well as exceptions to pay-for-   and specialized knowledge in                at China Lake and NIST by creating
performance salary increases,                administrative fields or special degrees    Payband V of the Engineers and
   6. Providing guidance to pay pool         are required.                               Scientists occupational family. This
managers,                                       4. General Support. This occupational    payband is designed for Senior
   7. Monitoring award pool distribution     family is composed of positions for         Technical Managers and Senior
by organization or any other special         which minimal formal education is           Scientists/Engineers.
categorization,                              needed, but for which special skills,          Current OPM guidelines covering the
   8. Selecting participants for the         such as office automation or shorthand,     Senior Executive System and Scientific
Expanded Developmental Opportunity           are usually required. Clerical work         and Professional (ST) positions do not
Program, long term training, and any         usually involves the processing and         fully meet the needs of MRDEC. The
special developmental assignments,           maintenance of records. Assistant work      SES designation is appropriate for
   9. Managing promotions to stay            requires knowledge of methods and           executive level managerial positions
within ‘‘high grade’’ controls,              procedures within a specific                whose classification exceeds the GS–15
   10. Addressing in-house budget            administrative area. Other support          grade level. The primary knowledges
neutrality issues to include tracking of     functions include the work of               and abilities of SES positions relate to
average salaries,                            secretaries, guards, and mail clerks.       supervisory and managerial
   11. Assessing the need for changes to                                                 responsibilities. Positions classified as
                                             Paybands
demonstration procedures and policies.                                                   ST are designed for bench research
                                               Each occupational family will be          scientists and engineers. OPM
III. Personnel System Changes                composed of discrete paybands (levels)      guidelines state that the duties and
A. Broadbanding                              corresponding to recognized                 responsibilities of ST positions must not
                                             advancement within the occupations.         include any managerial or supervisory
Occupational Families                        These paybands will replace grades.         responsibility.
   Occupations at the MRDEC will be          They will not be the same for all              MRDEC currently has several
grouped into occupational families.          occupational families. Each                 division/office chief positions that have
Occupations will be grouped according        occupational family will be divided into    characteristics of both SES and ST
to similarities in type of work,             four to five paybands; each payband         classifications. These division/office
customary requirements for formal            covering the same pay range now             chiefs in MRDEC are responsible for
training or credentials, and in              covered by one or more grades. A salary     supervising other GS–15 positions,
                     Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices                               11985

including function supervisors and non-      position descriptions for fear that they     current MRDEC SES members, ST
supervisory researcher engineers and         will be interpreted as characteristic of     employees and those in Payband V, and
scientists. MRDEC management                 SES rather than ST positions.                an equal number of individuals of
considers the primary requirement for        Consequently, MRDEC has some                 equivalent stature from outside the
division/office chiefs to be                 positions that do not strictly conform to    Center to ensure impartiality, breadth of
knowledgeable of and have expertise in       OPM definitions of either the SES or ST.     technical expertise, and a rigorous and
the specific scientific and technology          The purpose of Payband V is to            demanding review. The panel will
areas related to the mission of their        overcome the difficulties identified         apply criteria developed largely from
organizations. The ability to manage,        above by creating a category for two         the current OPM Research Grade
while important, is considered               types of positions—the Senior Technical      Evaluation Guide for positions
secondary. Historically, these positions     Manager (with full supervisory               exceeding the GS–15 level. The same
have been filled by employees who            authority) and the Senior Engineer/          procedure will be used for evaluating
possess primarily scientific/engineering     Scientist (less than full supervisory        Senior Technical Manager positions
credentials and who are considered           authority or no supervisory authority).      except the rating criteria will be
experts in their field by the scientific     Current GS–15 division/office chiefs         adjusted to account for the difference in
community. While it is clear these           will convert into the demonstration          the positions, such as greater emphasis
positions warrant classification beyond      project at Payband IV. After conversion      on technical program management and
the GS–15 level, attempts to classify        they will be reviewed against                supervisory abilities.
most of the positions as SES have been       established criteria added to determine
difficult because the size of the            if they should be reclassified to Payband       The final component of Payband V is
organizations and their location in the      V. Other positions possibly meeting          the management of all Payband V assets.
Center are not competitive with other        criteria for classification to Payband V     Specifically, this includes authority to
SES level positions. Classification of the   will be reviewed on a case-by-case basis.    classify, create, abolish positions as
positions as ST is also not an option        The proposed salary range is the same        circumstances warrant; recruit and
because supervisory responsibilities         as currently exists for ST positions         reassign employees in this payband; set
cannot be ignored.                           (minimum of 120% of the minimum              pay and to have their performance
   As preeminent scientists and              rate of basic pay for GS–15 with a           appraised under this project’s Pay for
engineers, incumbents of ST positions        maximum of the basic rate of pay             Performance System. This authority will
are responsible for specific research and    established for Level IV of the Executive    be executed within parameters to be
development efforts that are continuing      Schedule).                                   established at the DA level, to include
and long range, generally requiring the         Vacant positions in Payband V will be     controls on the numbers of Payband V
efforts of a team. These ST positions        competitively filled to ensure that          positions and recruitment/promotion
usually serve as team leaders which          selections are made from among the           criteria. The specific details regarding
means there is some responsibility for       world’s preeminent researchers and           the control and management of Payband
assigning work, coordinating results,        technical leaders in the specialty fields.   V assets will be included in the
and redirecting efforts. It is               MRDEC will capitalize on the                 demonstration’s operating procedures.
administratively convenient for these        efficiencies that can accrue from central    The laboratory wants to demonstrate
research team leaders to also participate    recruiting by continuing to use the          increased effectiveness by gaining
in performance management. The               expertise of the Army Materiel               greater managerial control and
restriction of including supervisory         Command SES Office as the recruitment        authority, consistent with merit,
authorities in ST jobs has forced            agent. Panels will be created to assist in   affirmative action, and equal
MRDEC to exclude any mention of the          filling Payband V positions. Panel           employment opportunity principles.
team leader responsibilities in these        members will be selected from a pool of      BILLING CODE 6325–01–P
11986               Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices




Fair Labor Standards Act                    be documented and attached to each             Such assignments within the coverage
  Fair Labor Standards Act (FLSA)           description. Exemption criteria will be     of the generic descriptors are
exemption and nonexemption                  narrowly construed and applied only to      accomplished without the need to
determinations will be made consistent      those employees who clearly meet the        process a personnel action. For instance,
with criteria found in 5 CFR part 551.      spirit of the exemption. Changes will be    a technical expert can be assigned to
Pay increases for employees receiving       documented and provided to the CPAC/        any project, task, or function requiring
retained rates will be determined in        CPOC, as appropriate.                       similar technical expertise. Likewise, a
accordance with 5 U.S.C. 5363 except                                                    manager could be assigned to manage
that those with a U rating will receive     Simplified Assignment Process               any similar function or organization
no pay increase. There are eight                                                        consistent with that individual’s
                                              Today’s environment of downsizing
paybands (see Figure 1) where                                                           qualifications. This flexibility allows a
                                            and workforce transition mandates that      broader latitude in assignments and
employees can be either exempt or           the MRDEC have increased flexibility to
nonexempt from overtime provisions.                                                     further streamlines the administrative
                                            assign individuals. Broadbanding can be     process and system.
For these eight paybands supervisors
                                            used to address this need. As a result of
with classification authorities will make                                               Promotion
                                            the assignment to a particular level
the determinations on a case-by-case
basis by comparing the duties and           descriptor, the organization will have         A promotion is a move of an
responsibilities assigned, the              increased flexibility to assign an          employee to (1) a higher payband in the
classification standards for each           employee, without pay change, within        same occupational family or (2) a
payband, and the FLSA criteria under 5      broad descriptions consistent with the      payband in another occupational family
CFR part 551. Additionally, the advice      needs of the organization, and the          in combination with an increase in the
and assistance of the Civilian Personnel    individual’s qualifications and rank or     employee’s salary. Positions with
Advisory Center/Civilian Personnel          level. Subsequent assignments to            known promotion potential to a specific
Operations Center (CPAC/CPOC) will be       projects, tasks, or functions anywhere      band within an occupational family will
obtained in making determinations as        within the organization requiring the       be identified when they are filled. Not
part of the performance review process.     same level and area of expertise, and       all positions in an occupational family
The benchmark position descriptions         qualifications would not constitute an      will have promotion potential to the
will not be the sole basis for the          assignment outside the scope or             same band. Movement from one
determination. Basis for exemption will     coverage of the current level descriptor.   occupational family to another will
                    Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices                               11987

depend upon individual knowledge,           competitive procedures will require a        Mid-Year Review
skills, and abilities, and needs of the     current performance rating of B or              A mid-year review between a
organization.                               better.                                      supervisor and employee will be held to
   Promotions will be processed under                                                    determine whether objectives are being
competitive procedures in accordance        B. Pay-for-Performance Management
                                            System                                       met and whether ratings on performance
with merit principles and requirements                                                   elements are above an unsatisfactory
and the local merit promotion plan. The     Performance Evaluation                       level. Performance objectives should be
following actions are excepted from                                                      modified as necessary to reflect changes
competitive procedures:                     Introduction
                                                                                         in planning, workload, and resource
   (a) Re-promotion to a position which                                                  allocation. The weights assigned to
                                               The performance evaluation system
is in the same payband and                                                               performance elements may be changed
                                            will link compensation to performance
occupational family as the employee                                                      if necessary. Additional reviews may be
                                            through annual performance appraisals
previously held on a permanent basis                                                     held as deemed necessary by the
within the competitive service.             and performance scores. The
                                            performance evaluation system will           supervisor or requested by the
   (b) Promotion, reassignment,                                                          employee. The supervisor will provide
demotion, transfer or reinstatement to a    allow optional use of peer evaluation
                                            and/or input from subordinates as            periodic feedback to the employee on
position having promotion potential no                                                   their level of performance. If the
greater than the potential of a position    determined appropriate by the
                                            Personnel Management Board. The              supervisor determines that the
an employee currently holds or                                                           employee is not performing at an
previously held on a permanent basis in     system will have the flexibility to be
                                            modified, if necessary, as more              acceptable level on one or more
the competitive service.                                                                 elements, the supervisor must alert the
   (c) A position change permitted by       experience is gained under the project.
                                                                                         employee and document the problem(s).
reduction in force procedures.              Performance Objectives                       This feedback will be provided at any
   (d) Promotion without current                                                         time during the rating cycle.
competition when the employee was             Performance objectives are statements
appointed through competitive               of job responsibilities based on the work    Performance Appraisal
procedures to a position with a             unit’s mission, goals and supplemental          A performance appraisal will be
documented career ladder.                   benchmark position descriptions.             scheduled for the final weeks of the
   (e) A temporary promotion, or detail     Employees and supervisors will jointly       annual performance cycle, although an
to a position in a higher payband, of 180   develop performance objectives which         individual performance appraisal may
days or less.                               will reflect the types of duties and         be conducted at any time after the
   (f) Reclassification to include impact   responsibilities expected at the             minimum appraisal period of 120 days
of person on-the-job promotions.            respective pay level. In case of             is met. The performance appraisal
   (g) A promotion resulting from the       disagreements, the decision of the           process brings supervisors and
correction of an initial classification     supervisor will prevail. Performance         employees together for formal
error or the issuance of a new              objectives deal with outputs and             discussions on performance and results
classification standard.                    outcomes of a particular job. The            in (1) written appraisals, (2)
   (h) Consideration of a candidate not                                                  performance ratings, (3) performance
                                            performance objectives, representing
given proper consideration in a                                                          scores, and (4) other individual
                                            joint efforts of employees and their
competitive promotion action.                                                            performance-related actions as
                                            rating chains, should be in place within
   (i) Impact of person on the job and                                                   appropriate. A performance appraisal
                                            30 days from the beginning of each
Factor IV process (application of the                                                    shall consist of two meetings held
                                            rating period.
Research Grade Evaluation Guide,                                                         between employee and supervisor: the
Equipment Development Grade                 Performance Elements                         performance review meeting and the
Evaluation Guide, Part III, or similar                                                   evaluation feedback meeting.
guides) promotions.                            Performance elements are generic
                                            attributes of job performance, such as       Performance Review Meeting Between
Link Between Promotion and                  technical competence, that an employee       Employee and Supervisor
Performance                                 exhibits in performing job                     The review meeting is to discuss job
  Career ladder promotions and              responsibilities and associated              performance and accomplishments.
promotions resulting from the addition      performance objectives. New                  Supervisors will not assign performance
of duties and responsibilities are          performance elements and rating forms        scores or performance ratings at this
examples of promotions that can be          will be designed to implement a new          meeting. The supervisor notifies the
made noncompetitively. Promotions can       scoring and rating system. The new           employee of the review meeting in time
be made noncompetitively when               performance evaluation system will be        to allow the employee to prepare a list
contributions and achievements are          based on critical and non-critical           of accomplishments. Employees will be
such that a higher payband is achieved      performance elements defined in              given an opportunity at the meeting to
when comparing the overall position to      Appendix C. Each performance element         give a personal performance assessment
the Equipment Development Grade             is assigned a weight between a specified     and describe accomplishments. The
Evaluation Guide, Part III or the           range. The total weight of all elements      supervisor and employee will discuss
Research Grade Evaluation Guide. To be      in a performance plan is 100 points. The     job performance and accomplishments
promoted noncompetitively from one          supervisor assigns each element some         in relation to the performance elements,
band to the next, an employee must          portion of the 100 points in accordance      objectives, and planned activities
meet the minimum qualifications for the     with its importance for mission              established in the performance plan.
job and have a current performance          attainment. As a general rule, essentially
rating of B or better (see Performance      identical positions will have the same       Evaluation Feedback Meeting Between
Evaluation) or equivalent under a           critical elements and the same weight.       Employee and Supervisor
different performance management            These weights will be developed along          In this second meeting between
system. Selection of employees through      with employee performance objectives.        employee and supervisor, the supervisor
11988                                Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices

informs the employee of management’s                                  rating period, not necessarily at the end      reduction in pay, or removal from the
appraisal of the employee’s performance                               of an appraisal period. This process           Federal service).
on performance objectives, and the                                    begins when the supervisor identifies a           If, during or at the conclusion of the
employee’s performance score and                                      deficiency(ies) which causes the level of      PIP, the employee’s level of
rating on performance elements. During                                performance to be at the U                     performance improves to a level at least
this second meeting, the supervisor and                               (unsatisfactory) level based on a              equal to that of a summary level C rating
employee will discuss and document                                    composite score that is less than 50 for       and is again determined to deteriorate to
performance objectives for the next                                   all elements or a score on any critical        below level C in any area during one
rating period.                                                        element of less than 50 percent.               year from the beginning of the PIP, the
   Performance Scores                                                    When the employee’s performance is          MRDEC may initiate action to remove
   The overall score is the sum of                                    determined to be unsatisfactory at the         the employee from the position with no
individual performance element scores.                                close of the annual rating period, the         additional opportunity to improve. An
Employees will receive an academic-                                   Unsatisfactory (U) rating will become          employee whose level of performance
type rating of A, B, C, or U depending                                the rating of record for all matters           improves to a level at least equal to that
upon the score attained. These summary                                relating to pay or Reduction-in-Force          of a summary level C rating for one year
ratings are representative of pattern E (a                            (RIF).                                         from the beginning of the PIP, and then
4 level system) in summary level chart                                   There are two processes to deal with        deteriorates to below level C again, in
in 5 CFR 430.208(d)(1). This rating will                              poor performers:                               any area, during succeeding rating
become the rating of record, and only                                    1. Change in Assignment—Because it          periods, will be placed in a second PIP
those employees rated C or higher will                                is recognized that employees may be            before initiating action to remove the
receive general increases, performance                                assigned to a position for which they are      employee from the position.
pay increases (i.e., basic pay increases),                            not suited, an attempt will be made to            If and when performance improves
and/or performance bonuses. A rating of                               place poor performers in a position            during the period in which the
A will be assigned for scores from 85 to                              better suited to their skills and              employee is otherwise ineligible for the
100 points, B for scores from 70 to 84,                               capabilities. The offer of change in           general increase, then the general
C for scores from 50 to 69, and U for                                 assignment will be contingent upon the         increase shall be restored. Such
scores from 0 to 49 or a failure to                                   employee’s concurrence and will be             restoration is not retroactive and is
achieve at the 50% level of any critical                              either within the same band or in the          separate and apart from incentive pay.
element. The academic-type ratings will                               next lower payband. If reassigned, the            3. Removal—If the employee fails to
be used to determine performance                                      employee will receive written                  demonstrate a level of performance at
payouts and to award additional RIF                                   notification that they will be given a         least equal to that of a summary level C
retention years as follows:                                           reasonable opportunity period of no less       rating after completing either Step 1 or
                                                                      than 30 calendar days in length, to            Step 2, the employee will be given a
                                                            RIF re-   demonstrate performance at a level that        written notice of proposed removal from
                                                            tention                                                  the position. The notice period will be
        Rating                Compensation                            is at least equal to that of a summary
                                                              yrs
                                                            added     level C rating. The period of time             a minimum of 30 calendar days and the
                                                                      considered to be reasonable will be            employee will have a reasonable period
A   .......................   4   shares+c* ......               10   determined, in part, by whether the            of time in which to reply. The employee
B   .......................   2   shares+c .......                7   employee’s reassignment is to a                will be given a written notice of
C   .......................   1   share+c .........               3
                                                                      substantially similar or the same              decision to include all applicable
U   .......................   0   .......................         0                                                  grievance and appeal rights.
                                                                      position under a different supervisor, or
  *c=GS General Increase (Title 5, Section                            in a different office, or in a substantially     Note: Performance-based adverse actions
5303).                                                                different position. Essential training and     may be taken under 5 U.S.C., Chapter 75,
  Selection of the weighted points to                                 mentoring will be provided as                  rather than Chapter 43.
assign to an employee’s performance on                                appropriate during this opportunity               A decision to remove an employee for
performance elements is assisted by use                               period. Failure to achieve a level of          poor performance may be based only on
of benchmark performance standards                                    performance that is at least equal to that     those instances of poor performance that
(Appendix D). These benchmark                                         of a summary level C rating (following         occurred during the opportunity period
performance standards are modified                                    the above-referenced opportunity               (Step 1) or during the one-year period
versions of the performance standards                                 period) will place the employees in Step       ending on the date of proposed removal
used by the National Institute of                                     3 of this process. There will be no            (Step 2). The notice of decision will
Standards and Technology (NIST),                                      further opportunity period.                    specify the instances of poor
National Bureau of Standards. Each                                       2. Performance Improvement Plan             performance on which the action is
benchmark performance standard                                        (PIP)—If the employee does not accept          based and will be given to the employee
describes the level of performance                                    an offer of change in assignment, or if        at or before the time the action will be
associated with a particular point on a                               there is no appropriate, available             effective.
rating scale. Supervisors may add                                     position to assign an employee, the               The MRDEC will preserve all relevant
supplemental standards to the                                         supervisor will develop a PIP that will        documentation concerning an action
performance plans of the employees                                    be monitored for a reasonable period of        taken for poor performance and make it
they supervise to further elaborate the                               time (no less than 30 calendar days).          available to review by the affected
benchmark performance standards.                                      When an employee is placed in a PIP,           employee or designated representative.
                                                                      the employee will be informed in               At a minimum, the record will consist
Performance-Based Actions                                             writing, that unless their level of            of a copy of the notice of proposed
  MRDEC will implement a process to                                   performance improves to, and is                action; the employee’s written reply, if
deal with poor performers. This process                               sustained at a level at least equal to that    provided, or a summary if the employee
may lead to involuntary separations,                                  of a summary level C rating, the               makes an oral reply. Additionally, the
with grievance or appeal rights. The                                  employee may be removed from the               record will contain the written notice of
process may start at any time during the                              position (change in assignment,                decision and the reasons therefore,
                     Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices                            11989

along with any supporting material         employees will be eligible for cash         amounts available in the respective
including documentation regarding the      awards.                                     funds. The funding for the base pay
opportunity afforded the employee to                                                   fund is composed of money previously
                                           Pay Administration
demonstrate improved performance. An                                                   available for within-grade increases,
employee who sustains their                Introduction                                quality step increases, and promotions
performance at a level at least equal to     The objective is to establish a pay       between grades that are banded under
a summary level C rating for one year,     system that will improve the ability of     the demonstration project. The bonus
will have all relevant documentation       the MRDEC to attract and retain quality     pay fund is separately funded within
removed from their record.                 employees. The new system will be a         the constraints of the organization’s
Employee Relations                         pay-for-performance system and, when        overall performance award budget.
                                           implemented, will result in a               Some portion of the performance award
  Employees covered by the project will    redistribution of pay resources based       budget will be reserved for special ad
be evaluated under a performance           upon individual performance.                hoc awards—e.g., suggestion awards or
evaluation system that affords grievance                                               special act awards—and will not be
or appeal rights comparable to those       Pay-for-Performance
                                                                                       included as part of the performance pay
provided currently.                           MRDEC will use a simplified
                                                                                       pool.
                                           performance appraisal system that will
Senior Executive Service and 5 U.S.C.      permit both the supervisor and the            The MRDEC Budget Office, in
3104 (ST) Employees                        employee to focus on quality of the         consultation with AFGE Local 1858 and
  Members of the SES will remain           work. The proposed system will permit       supporting personnelists, will calculate
under the current SES performance          the manager/supervisor to base              the total performance pay pool funds
appraisal system. Title 5 U.S.C. 3104      incentive pay increases entirely on         and allocate pay pools to Major
(ST) employees will be included in the     performance or value added to the goals     Organizational Units or teams as
project performance evaluation system,     of the organization. This system will       appropriate.
but will not be in the project pay-for-    allow managers to withhold pay
performance system.                        increases from nonperformers, thereby       Performance Pay Increases and/or
                                           giving the nonperformer the incentive to    Performance Bonuses
Awards                                     improve performance or leave
                                                                                         A pay pool manager is accountable for
   The MRDEC currently has an              government service. For example,
                                           employees with ratings of U will receive    staying within pay pool limits. The pay
extensive awards program consisting of                                                 pool manager assigns performance pay
both internal and external awards. On-     no performance pay increase, general
                                           increase, or performance bonus. This        increases and/or performance bonuses
the-spot, special act (which are both
                                           action may result in the employee’s pay     to individuals on the basis of an
performance related and
                                           falling below the minimum rate of their     academic-type rating, the value of the
nonperformance related), and other
                                           current payband because the minimum         performance pay pool resources
internal awards (both monetary and
nonmonetary) will continue under the       rate is increased by the general increase   available, and the individual’s current
project, and may be modified or            (5 U.S.C. 5303). Under these transitory     basic rate of pay within a given
expanded as appropriate. MACOM, DA,        conditions, the employee’s payband          payband. A pay pool manager may
and DoD awards and other honorary          designator will remain the same. Since      request approval from the Personnel
noncash awards will be retained.           there is no reduction in band level or      Management Board (PMB) or its
                                           pay, there is no adverse action.            designee to grant a performance pay
   Teams may distribute an award pool
                                              Pay for performance has two              increase to an employee that is higher
among themselves where appropriate.
                                           components: performance pay increases       than the compensation formula for that
Thus, a team leader or supervisor may
                                           and/or performance bonuses. All             employee to recognize extraordinary
allocate a sum of money to a team for
                                           covered employees will be given the full    achievement or to provide accelerated
outstanding completion of a special
                                           amount of locality pay adjustments          compensation for local interns.
task, and the team may decide the
                                           when they occur regardless of
individual distribution of the total                                                     Performance payouts will be
                                           performance. The funding for
dollars among themselves.                                                              calculated for each individual based
                                           performance pay increases and/or
   The MRDEC Director will have the        performance bonuses is composed of          upon a performance pay pool value that
authority to grant awards to covered       money previously available for within-      will be initially 3 percent (e.g., 2.0%
employees of up to $10,000 for a special   grade increases, quality step increases,    performance pay + 1.0% performance
act. The scale of the award will be        promotions from one grade to another        bonus) of the combined basic rates of
determined using criteria in AR 5–17.      where both grades are now in the same       pay of the assigned employees. This
AFGE Local 1858 will be notified and       payband, and for some performance           percentage, a payout factor, will be
provided an opportunity to comment on      awards. Additionally, funds will be         adjusted as necessary to compensate for
proposed special act awards for            obtained from performance pay               changing employee demographics
bargaining unit employees before the       increases withheld for poor performance     which impact the elements used in the
effective date of the award. The name of   (see Performance Evaluation).               GS system, such as the amount of step
proposed special act awardees will not                                                 raises, quality step increases, and
be released to the union for privacy act   Performance Pay Pool
                                                                                       promotions. Performance payouts will
purposes.                                    The performance pay pool is               be calculated so that a pay pool manager
   Members of the SES will remain          composed of a base pay fund and a           will not exceed the resources that are
under their current awards system and      bonus pay fund. The payouts made to         available in the pay pool. An
will not participate in the project        employees from the performance pay          employee’s performance payout is
performance recognition bonus awards       pool will be a mix of base pay increases
                                                                                       computed as follows:
program. Title 5 U.S.C. 3104 (ST)          and bonus payments, subject to the
11990                Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices

                                                                 Pool Value * SAL * N
                                       Performance Payout =
                                                               SUM (SALj * Nj); j = 1 to n


Where:                                       midpoint dollar threshold, future            discretion within the pay range of the
Pool Value=F * SUM (SALk); k=1 to n          performance pay increases will require       applicable payband. This rate of pay
n=Number of employees in pay pool            a B rating or greater. If an employee        may include a supervisory pay
N=Number of shares earned by an              attains a C rating and is beyond the         adjustment determined using the ranges
      employee based on their                midpoint dollar threshold, incentive         and criteria outlined above.
      performance rating (0 to 4)            pay increases will be restricted to             (2) A career employee selected for a
SAL=An individual’s basic rate of pay        performance bonuses only.                    supervisory position that is within the
SUM=The summation of the entities in            Annual performance pay increases          employee’s current payband may also be
      parenthesis over the range indicated   will be limited to (1) 50 percent of the     considered for a supervisory pay
F=Payout Factor                              difference between the particular            adjustment.
   Once the individual performance           maximum band rate and the employee’s            If a supervisor is already authorized a
payout amounts have been determined,         current basic rate of pay, or (2) the        supervisory pay adjustment and is
the next step is to determine what           projected performance pay increase,          subsequently selected for another
portion of each payout will be in the        whichever is less, with the balance          supervisory position, within the same
form of a base pay increase as opposed       converted to a performance bonus. This       payband, then the supervisory pay
to a bonus payment. A base pay share         means that employees whose pay has           adjustment will be redetermined.
factor is derived by dividing the amount     reached the upper limits of a particular        Within the demonstration project
of the base pay fund by the amount of        payband will receive most performance        rating system, the performance element
the total performance pay pool. This         incentives as a performance bonus.           ‘‘Supervision/EEO’’ is identified as a
factor is multiplied by the individual       Performance bonuses will not become a        critical element. Changes in the rating
performance payout amounts to derive         part of employee basic rate of pay.          value for this element awarded to a
each individual’s projected base pay                                                      supervisor with a supervisory pay
increase. Certain employees will not be      Supervisory Pay Adjustments                  adjustment may generate a review of the
able to receive the projected base pay          Supervisory pay adjustments may be        adjustment and may result in an
increase due to base pay caps. Base pay      used at the discretion of the MRDEC          increase or decrease to that adjustment.
is capped when an employee reaches           Director, to compensate employees            Decrease to a supervisory pay
the maximum rate of pay in an assigned       assuming positions entailing                 adjustment is not an adverse action if
payband, when the midpoint principle         supervisory responsibilities.                this action results from changes in
applies (see below), and when the 50         Supervisory pay adjustments are              supervisory duties or supervisory
percent rule applies (see below).            increases to the supervisor’s basic rate     ratings.
   If the organization determines it is      of pay, ranging up to 10 percent of that        Supervisors, upon initial conversion
appropriate, it may reallocate a portion     pay rate, subject to the constraint that     into the demonstration project into the
(up to the maximum possible amount)          the adjustment may not cause the             same, or substantially similar position,
of the unexpended base pay funds for         employee’s basic rate of pay to exceed       will be converted at their existing basic
capped employees to uncapped                 the payband maximum rate. Only               rate of pay and will not be offered a
employees. This reallocation must be         employees in supervisory positions with      supervisory pay adjustment.
made on a proportional basis so that all     formal supervisory authority meeting            The initial dollar amount of the
uncapped employees receive the same          that required for coverage under the         adjustment will be removed when the
percentage increase in their base pay        OPM GS Supervisory Guide may be              employee voluntarily leaves the
share (unless the reallocation               considered for the supervisory pay           supervisory position. The cancellation
adjustment is limited by a pay cap). Any     adjustment. Criteria to be considered in     of the adjustment under these
dollar increase in an employee’s             determining the pay increase percentage      circumstances is not an adverse action
projected base pay increase will be          include the following organizational         and is not appealable. If an employee is
offset, dollar for dollar, by an             and individual employee factors: (1)         removed from a supervisory position for
accompanying reduction in the                Needs of the organization to attract,        personal cause (performance or
employee’s projected bonus payment.          retain, and motivate high quality            conduct), the adjustment will be
Thus, the employee’s total performance       supervisors; (2) budgetary constraints;      removed under adverse action
payout is unchanged.                         (3) years of supervisory experience; (4)     procedures. However, if an employee is
   A midpoint principle will be used to      amount of supervisory training received;     removed from a non-probationary
determine performance pay increases.         (5) performance appraisals and               supervisory position for conditions
This principle requires that employees       experience as a group or team leader; (6)    other than voluntary or for personal
in all paybands must receive a B rating      their organizational level of supervision;   cause, then the pay retention provisions
or higher to advance their basic rate of     and (7) managerial impact on the             of 5 CFR part 536 will prevail.
pay beyond the midpoint dollar               organization. The supervisory pay
threshold of their respective paybands.                                                   Supervisory Pay Differentials
                                             adjustment will not apply to 5 U.S.C.
If the performance payout formula            3104 (ST) positions.                            Supervisory differentials may be used,
yields a basic pay increase for a C-rated       Conditions, after the date of             at the discretion of the MRDEC Director,
employee that would increase their           conversion into the demonstration            to incentivize and reward supervisors
basic rate of pay beyond the midpoint        project, under which the application of      who are in paybands III and IV of the
dollar threshold, then their basic rate of   a supervisory pay adjustment may be          E&S occupational family in supervisory
pay will be adjusted to the midpoint         considered are as follows:                   positions with formal supervisory
dollar threshold and the balance                (1) New hires into supervisory            authority meeting that required for
converted to a performance bonus. Once       positions will have their initial rate of    coverage under the OPM GS
an employee has progressed beyond the        basic pay set at the supervisor’s            Supervisory Guide. A supervisory pay
                     Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices                                11991

differential is a cash incentive that may     structure. Provisions will be made for      performed. Functional codes are those
range up to 10 percent of the                 including other occupations as              currently found in the OPM
supervisor’s basic rate of pay. It is paid    employment requirements change in           Introduction to the Classification
on a pay period basis and is not              response to changing technical              Standards which define certain kinds of
included as part of the supervisor’s          programs.                                   activities, e.g., Research, Development,
basic rate of pay. Criteria to be             Occupational Series                         Test and Evaluation, etc., and covers
considered in determining the amount                                                      Engineers & Scientists.
of this supervisory pay differential            The present GS classification system
                                              has over 400 occupations (also called       Classification Appeals
includes those identified for
Supervisory Pay Adjustments.                  series), which are divided into 22             An employee may appeal the
   The supervisory pay differential may       groups. The occupational series will be     occupational family, occupational
be considered, either during conversion       maintained. New series, established by      series, or payband of his or her position
into or after initiation of the               OPM, may be added as needed to reflect      at any time. The employee may
demonstration project, if the supervisor      new occupations in the work force.          accomplish this by exercising any of the
has subordinate employees in the same         Appendix A lists the occupational series    following options: (a) The employee
payband. The differential must be             currently represented at the MRDEC by       must formally raise the areas of concern
terminated if the employee is removed         occupational family.                        to supervisors in the immediate chain of
from a supervisory position, regardless       Classification Standards                    command, either verbally or in writing,
of cause.                                                                                 (b) If the employee is not satisfied with
                                                MRDEC will use a classification           the supervisory response, the employee
   As specified in Supervisory Pay
                                              system that is a modification of the        may appeal to the appellate level within
Adjustments, after initiation of the
                                              system now in use at the U.S. Navy,         DoD or may appeal directly to OPM, (c)
demonstration project, all personnel
                                              Naval Command, Control and Ocean            If the employee elects to first appeal to
actions involving a supervisory
                                              Surveillance Center, San Diego,             DoD but is not satisfied with this
differential will require a statement
                                              California. The present classification      response, he/she may appeal to the
signed by the employee acknowledging
                                              standards will be used to create local      Office of Personnel Management.
that the differential may be terminated
                                              benchmark position descriptions for         Appellate decisions from OPM are final.
or reduced at the MRDEC Director’s
                                              each payband, reflecting duties and            The evaluation of a classification
discretion. The termination or reduction
                                              responsibilities comparable to those        appeal, is based on the MRDEC
of the differential is not an adverse
                                              described in present classification         Personnel Demonstration Project
action and is not subject to appeal.
                                              standards for the span of grades            Classification Standards.
Pay and Compensation Ceilings                 represented by each payband. There
                                              will be at least one benchmark position     D. Hiring and Appointment Authorities
   An employee’s total monetary
compensation paid in a calendar year          description for each payband. A             1. Hiring Authority
may not exceed the basic rate of pay          supervisory benchmark position
                                              description will be added to those             A candidate’s basic eligibility will be
paid in level I of the Executive Schedule                                                 determined using Office of Personnel
consistent with 5 U.S.C. 5307 and 5 CFR       paybands that include supervisory
                                              employees. Present titles and series will   Management’s (OPM) Qualification
part 530, subpart B.                                                                      Standards Handbook for General
   In addition, each payband will have        continue to be used in order to
                                              recognize the types of work being           Schedule Positions. Candidates must
its own pay ceiling, just as grades do in                                                 meet the minimum standards for entry
the current system. Pay rates for the         performed and educational backgrounds
                                              and requirements of incumbents.             into the payband. For example if the
various paybands will be directly keyed                                                   payband includes positions in grades
to the GS rates. Except for retained rates,   Locally developed specialty codes and
                                              OPM functional codes will be used to        GS–5 and GS–7, the candidate must
basic pay will be limited to the                                                          meet the qualifications for positions at
maximum rates payable for each                facilitate titling, making qualification
                                              determinations, and assigning               GS–5 level. Specific experience/
payband.                                                                                  education required will be determined
                                              competitive levels to determine
Pay Setting for Promotion                     retention status.                           based on whether a position to be filled
                                                                                          is at the lower or higher end of the band.
   Upon promotion to a higher payband,        Position Descriptions and Classification    Selective placement factors can be
an employee will be entitled to a 6%          Process                                     established in accordance with the OPM
pay increase or the lowest level in the
                                                The MRDEC Director will have              Qualification Handbook, when judged
payband to which promoted, whichever
                                              delegated classification authority and      to be critical to successful job
is greater. Highest previous rate also
                                              may redelegate this authority to            performance. These factors will be
may be considered in setting pay upon
                                              subordinate managers. New benchmark         communicated to all candidates for
promotion, under rules similar to the
                                              position descriptions will be developed     particular position vacancies and must
highest previous rate rules in 5 CFR
                                              to assist managers in exercising            be met for basic eligibility. Under the
531.203(c) and (d).
                                              delegated position classification           demonstration authority, the MRDEC
C. Classification                             authority. Managers will identify the       will modify qualification standards only
                                              occupational family, job series, the        as authorized in the General Policies
Introduction
                                              functional code, the specialty code,        and instructions (paragraph 8) of the
  The objectives of the new                   payband level, and the appropriate          Qualification Standard Handbook.
classification system are to simplify the     acquisition codes. The manager will
classification process, make the process                                                  2. Appointment Authority
                                              document these decisions on a cover
more serviceable and understandable,          sheet similar to the present DA Form          Under the demonstration project,
and place more decision-making                374.                                        there will continue to be career and
authority and accountability with line          Specialty codes will be developed by      career conditional appointments and
managers. All positions listed in             Subject Matter Experts (SMEs) to            temporary appointments not to exceed
Appendix A will be in the classification      identify the special nature of work         one year. These appointments will use
11992                Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices

existing authorities and entitlements.        3. Extended Probationary Period              position from which they were
Non-permanent positions (exceeding               The current one year probationary         promoted.
one year) needed to meet fluctuating or       period will be extended to two years for     5. Voluntary Emeritus Program
uncertain workload requirements will          all newly hired employees in the
be filled using a Contingent Employee                                                         Under the demonstration project, the
                                              Engineers and Scientists, E&S Support,       Center Director will have the authority
appointment authority.                        and Business Management occupational         to offer retired or separated individuals
   Employees hired for more than one          families. The purpose of extending the       (engineers and scientists) voluntary
year, under the contingent employee           probationary period is to allow              assignments in the Center. This
appointment authority, are given term         supervisors an adequate period of time       authority will include individuals who
appointments in the competitive service       to fully evaluate an employee’s ability to   have retired or separated from Federal
for no longer than five years. The            complete a cycle of work (such as            service. Voluntary Emeritus Program
MRDEC Director is authorized to extend        research, program development and            assignments are not considered
a contingent appointment one                  execution, and technology transfer) and      ‘‘employment’’ by the Federal
additional year. These employees are          to fully evaluate an employee’s              government (except for purposes of
entitled to the same rights and benefits      contribution and conduct. Employees in       injury compensation). Thus, such
as term employees and will serve a one        the General Support occupational             assignments do not affect an employee’s
year trial period. The Pay-for-               family will serve a one year                 entitlement to buyouts or severance
Performance Management System                 probationary period.                         payments based on an earlier separation
described in III.B applies to contingent         Aside from extending the time period,     from Federal service. The Voluntary
employees.                                    all other features of the current            Emeritus Program will ensure continued
                                              probationary period are retained             quality research while reducing the
   Appointments will be made under the        including the potential to remove an
same appointment authorities and                                                           overall salary line by allowing higher
                                              employee without providing the full          paid individuals to accept retirement
processes as regular term appointments,       substantive and procedural rights            incentives with the opportunity to
but recruitment bulletins must indicate       afforded a non-probationary employee.        retain a presence in the scientific
that there is a potential for conversion      Any employee appointed prior to the          community. The program will be of
to permanent employment.                      implementation date will not be              most benefit during manpower
   Employees hired under the contingent       affected. The two year probation will        reductions as senior S&Es could accept
employee authority may be eligible for        apply to new hires or those who do not       retirement and return to provide
conversion to career-conditional              have reemployment rights or                  valuable on-the-job training or
appointments. To be converted, the            reinstatement privileges.                    mentoring to less experienced
employee must (1) have been selected             Probationary employees will be            employees. Voluntary service will not
for the term position under competitive       terminated when the employee fails to        be used to replace any employee.
procedures, with the announcement             demonstrate proper conduct, technical           To be accepted into the emeritus
specifically stating that the individual(s)   competency, and/or adequate                  program, a volunteer must be
selected for the term position(s) may be      contribution for continued employment.       recommended by Center managers to
eligible for conversion to career-            When the MRDEC decides to terminate          the Center Director. Everyone who
conditional appointment at a later date;      an employee serving a probationary           applies is not entitled to a voluntary
(2) served two years of substantially         period because his/her work                  assignment. The Center Director must
continuous service in the term position;      performance or conduct during this           clearly document the decision process
(3) be selected under merit promotion         period fails to demonstrate their fitness    for each applicant (whether accepted or
procedures for the permanent position ;       or qualifications for continued              rejected) and retain the documentation
and (4) have a current rating of B or         employment, it shall terminate his/her       throughout the assignment.
better.                                       services by written notification of the      Documentation of rejections will be
                                              reasons for separation and the effective     maintained for two years.
   Employees serving under regular term       date of the action. The information in          To ensure success and encourage
appointments at the time of conversion        the notice as to why the employee is         participation, the volunteer’s federal
to the Demonstration Project will be          being terminated shall, as a minimum,        retirement pay (whether military or
converted to the new contingent               consists of the manager’s conclusions as     civilian) will not be affected while
employee appointments provided they           to the inadequacies of their performance     serving in a voluntary capacity. Retired
were hired for their current positions        or conduct.                                  or separated federal employees may
under competitive procedures. These                                                        accept an emeritus position without a
employees will be eligible for                4. Supervisory Probationary Periods
                                                                                           break or mandatory waiting period.
conversion to career-conditional                 Supervisory probationary periods will        Volunteers will not be permitted to
appointment if they have a current            be made consistent with 5 CFR part 315,      monitor contracts on behalf of the
rating of B or better (or one of the top      Subchapter 315.901. Employees that           government or to participate on any
two ratings on the current evaluation         have successfully completed the initial      contracts or solicitations where a
system), and are selected under merit         probationary period will be required to      conflict of interest exists. The same
promotion procedures for their                complete an additional one year              rules that currently apply to source
permanent position after having               probationary period for the initial          selection members will apply to
completed two years of continuous             appointment to a supervisory position.       volunteers.
service. Time served in temporary or          If, during the probationary period, the         An agreement will be established
term positions prior to conversion to the     decision is made to return the employee      between the volunteer, the Center
contingent employee appointment is            to a nonsupervisory position for reasons     Director and the CPAC/CPOC Director.
creditable to the requirement for two         solely related to supervisory                The agreement will be reviewed by the
years of continuous service stated            performance, the employee will be            local Legal Office for ethics
above, provided the service was               returned to a comparable position of no      determinations under the Joint Ethics
continuous.                                   lower payband and pay than the               Regulation. The agreement must be
                     Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices                                11993

finalized before the assumption of           learning or uncompensated                    it would result in a tax liability for the
duties and shall include:                    developmental work experiences may           employee without the employee’s
   (a) A statement that the voluntary        be considered, such as advanced              express and written consent. It is
assignment does not constitute an            academic teaching or research, or on-        expected that the degree payment
appointment in the civil service and is      the-job work experience with public or       authority will be used primarily and
without compensation, and any and all        non-profit organizations. Employees          largely for advanced degrees, except
claims against the Government (because       will be eligible after completion of         where an undergraduate program is
of the voluntary assignment) are waived      seven years of Federal service. Final        necessary to the attainment of an
by the volunteer,                            approval authority will rest with the        advanced degree or credits. Any
   (b) A statement that the volunteer will   MRDEC Director, and selection of an          variance from this policy must be
be considered a federal employee for the     employee to be granted an expanded           rigorously determined and documented.
purpose of injury compensation,              developmental opportunity will be on a          The MRDEC will develop guidelines
   (c) Volunteer’s work schedule,            competitive basis. An expanded               to ensure competitive approval of
   (d) Length of agreement (defined by       developmental opportunity period will        degree payment and that such decisions
length of project or time defined by         not result in loss of (or reduction in)      are fully documented. In addition, this
weeks, months, or years),                    pay, leave to which the employee is          proposal shall be implemented
   (e) Support provided by the Center        otherwise entitled, or credit for time or    consistent with 5 U.S.C. 4107(b)(2).
(travel, administrative, office space,       service. Employees accepting an
supplies),                                   expanded developmental opportunity           F. Revised Reduction-in-Force (RIF)
   (f) A one page Statement of Duties and    do not have to sign a continued service      Procedures
Experience,                                  agreement cited in 5 U.S.C. 4108(a)(1)       Introduction
   (g) A provision that states no            (Supplement 1995).
                                                The opportunity to participate in the        Modifications include limiting
additional time will be added to a
                                             Expanded Developmental Opportunity           competitive area to occupational
volunteer’s service credit for such
                                             Program will be announced annually.          families and increasing the emphasis on
purposes as retirement, severance pay,
                                             Instructions for application and the         performance in the RIF Process.
and leave as a result of being a member
                                             selection criteria will be included in the   Retention criteria are in the following
of the Voluntary Emeritus Program,
   (h) A provision allowing either party     announcement. Final selection for            order; tenure, veterans’ preference,
to void the agreement with 10 working        participation in the program will be         service credit adjusted by a sum of the
days written notice, and                     made by the Personnel Management             last three performance ratings. Current
   (i) The level of security access          Board. The position of employees on an       reduction in force regulations/
required (any security clearance             expanded developmental opportunity           procedures have been adjusted in the
required by the assignment will be           may be backfilled with employees             context of the occupational family and
managed by the Center while the              temporarily promoted or contingent           the payband classification system. Also
volunteer is a member of the Voluntary       employees or employees assigned via          regulations are being modified by
Emeritus Program).                           the simplified assignment process in         substituting ‘‘same payband’’ for ‘‘same
                                             III.A. However, that position or its         grade’’ and ‘‘one payband lower’’ for
E. Employee Development                      equivalent must be made available to         ‘‘three grades lower.’’
1. Expanded Developmental                    the employee returning from the              Competitive Areas
Opportunity Program                          expanded developmental opportunity.
                                                                                             Each of the four occupational families
   The MRDEC Expanded                        2. Training for Degrees                      will be a separate competitive area and
Developmental Opportunity Program               Degree training is an essential           each competitive area will cover all
will be funded by the MRDEC, and it          component of an organization that            geographic locations. Bumps and
will cover all demonstration project         requires continuous acquisition of           retreats will occur only within the
employees in the Engineers and               advanced and specialized knowledge.          competitive area and only to positions
Scientists and the E&S Support               Degree training in the academic              for which the employee is qualified in
occupational families. An expanded           environment of laboratories is also a        the same or next lower payband.
developmental opportunity                    critical tool for recruiting and retaining      Competitive levels will be established
complements existing developmental           employees with or requiring critical         based on the payband, classification
opportunities such as (1) long term          skills. Constraints under current law        series, and where responsibilities are
training, (2) one year work experiences      and regulation limit degree payment to       similar enough in duties, qualification
in an industrial setting via the Relations   shortage occupations. In addition,           requirements, pay schedules, and
With Industry Program, (3) one year          current government wide regulations          working conditions so that an employee
work experiences in laboratories of          authorize payment for degrees based          may be reassigned to any of the other
allied nations via the Science and           only on recruitment or retention needs.      positions within the level without
Engineer Exchange Program, (4)               Degree payment is not permitted for          requiring significant training or causing
rotational job assignments within the        non-shortage occupations involving           undue interruption. Separate
MRDEC, (5) up to one year                    critical skills.                             competitive levels will be established
developmental assignments in higher             The MRDEC proposes to expand the          for positions in the competitive and
headquarters within the Army and             authority to provide degree payment for      excepted service; for positions filled on
Department of Defense, and (6) self          purposes of meeting critical skill           a full-time, part-time, intermittent,
directed study via correspondence            requirements, to ensure continuous           seasonal, or on-call basis; and separate
courses and local colleges and               acquisition of advanced and specialized      levels will be established for positions
universities.                                knowledge essential to the organization,     filled as a trainee or developmental.
   Each developmental opportunity            and to recruit and retain personnel
period should benefit the MRDEC, as          critical to the present and future           Retention
well as increase the employee’s              requirements of the organization. Degree       Competing employees are listed on a
individual effectiveness. Various            payment may not be authorized where          retention register in the order shown
11994               Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices

below. Each tenure group has three          IV. Training                                  Employees
subgroups (30% or higher compensable                                                        The MRDEC, in conjunction with the
                                            Introduction
veterans, other veterans, and non-                                                        AFGE Local 1858 and education and
veterans) and employees appear on the         The key to the success or failure of the    development assets of the CPAC/CPOC
retention register in that order. Within    proposed demonstration project will be        will train employees covered under the
each subgroup, employees are in order       the training provided for all involved.       demonstration project. In the months
of years of service adjusted to include     This training will not only provide the       leading up to the implementation date,
performance credit.                         necessary knowledge and skills to carry       meetings will be held for employees to
Tenure I (Career employees)                 out the proposed changes, but will also       fully inform them of all project
Tenure II (Career-Conditional               lead to program commitment on the part        decisions, procedures, and processes.
   employees)                               of participants.
                                              Training at the beginning of                V. Conversion
Tenure III (Contingent employees)
                                            implementation and throughout the             Conversion to the Demonstration Project
   In the Demonstration Project an          demonstration will be provided to
employee can bump into a position, in                                                        a. Initial entry into the demonstration
                                            supervisors, employees, and the               project will be accomplished through a
the same occupational family in the         administrative staff responsible for
same payband or one below, that is                                                        full employee protection approach that
                                            assisting managers in effecting the           ensures each employee an initial place
currently held by another employee in       changeover and operation of the new
a lower retention subgroup. An                                                            in the appropriate payband without loss
                                            system.                                       of pay. Employees serving under regular
employee may retreat within the same
                                              The elements to be covered in the           term appointments at the time of the
occupational family in the same band or
                                            orientation portion of this training will     implementation of the demonstration
one payband below the one that is
                                            include: (1) a description of the             project will be converted to the
currently held by another employee in
                                            personnel system, (2) how employees           contingent employee appointment.
the same subgroup who has lower
                                            are converted into and out of the             Position announcement, etc. will not be
adjusted RIF service computation date.
                                            system, (3) the pay adjustment and/or         required for these contingent employee
A preference eligible with a
                                            bonus process, (4) familiarization with       appointments. An automatic conversion
compensable service-connected
                                            the new position descriptions and             from current GS/GM grade and pay into
disability of 30 percent or more may
                                            performance objectives, (5) the               the new broadband system will be
displace employees in positions
                                            performance evaluation management             accomplished.
equivalent to five GS grades below the
                                            system, (6) the reconsideration process,         Each employee’s initial total salary
minimum grade level of his/her current
                                            and (7) the demonstration project             under the demonstration project will
band.
                                            administrative and formal evaluation          equal the total salary received
   An employee with a current annual        process. AFGE Local 1858 will be given        immediately before conversion.
performance rating of U has assignment      an opportunity to describe their role and     Employees who enter the demonstration
rights only to a position held by another   function in the demonstration program.        project later by lateral reassignment or
employee who has a U rating. An
                                            Supervisors                                   transfer will be subject to parallel pay
employee who has been given a written
                                                                                          conversion rules. If conversion into the
decision of removal because of                 The focus of this project on               demonstration project is accompanied
unacceptable performance will be            management-centered personnel                 by a geographic move, the employee’s
placed at the bottom of the retention       administration, with increased                GS pay entitlements in the new
register for his/her competitive level.     supervisory and managerial personnel          geographic area must be determined
Link Between Performance and                management authority and                      before performing the pay conversion.
Retention                                   accountability, demands thorough                 b. Employees who are on temporary
                                            training of supervisors and managers in       promotions at the time of conversion
  An employee will have additional          the knowledge and skills that will            will be converted to a payband
years of service added to the service       prepare them for their new                    commensurate with the grade of the
computation date for retention              responsibilities. Training will include       position to which promoted. At the
purposes. The credit is applied for each    detailed information on the policies and      conclusion of the temporary promotion,
of the last three annual performance        procedures of the demonstration project,      the employee will revert to the payband
ratings of record, received over the last   skills training in using the classification   which corresponds to the grade of
four years, for a potential credit of 30    system, position description                  record. When a temporary promotion is
years. If an employee has less than three   preparation, performance evaluation,          terminated, the employee’s pay
annual performance ratings of record,       and interaction with AFGE Local 1858          entitlements will be determined based
then for each missing rating, a rating of   as a partner. Additional training may         on the employee’s position of record,
C will be assumed. Ratings given under      focus on nonproject procedural                with appropriate adjustments to reflect
nonDemo systems will be converted to        techniques such as interpersonal and          pay events during the temporary
the demo rating scheme and provided         communication skills.                         promotion, subject to the specific
the equivalent rating credit.                                                             policies and rules established by the
Rating A adds 10 years                      Administrative Staff
                                                                                          MRDEC. In no case may those
Rating B adds 7 years                         The administrative staff, generally         adjustments increase the pay for the
Rating C adds 3 years                       personnel specialists, technicians, and       position or record beyond the applicable
Rating U adds no credit for retention       administrative officers, will play a key      pay range maximum rate. The only
                                            role in advising, training, and coaching      exception will be if the original
Grade and Pay Retention
                                            supervisors and employees in                  competitive promotion announcement
  Except where waived or modified in        implementing the demonstration                stipulated that the promotion could be
the waivers section of this plan, grade     project. This staff will need training in     made permanent; in these cases actions
and pay retention will follow current       the procedural and technical aspects of       to make the temporary promotion
law and regulations.                        the project.                                  permanent will be considered, and if
                      Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices                                   11995

implemented, will be subject to all            accompanying geographic movement,             under the above-described ‘‘step 4’’ rule
existing priority placement programs.          promotion, or other simultaneous              but fits in the rate range for the next
   c. Employees who are covered by             action. For conversions upon                  higher applicable grade (i.e., between
special salary rates, prior to the             termination of the project and for lateral    step 1 and step 4), then the employee
demonstration project, will no longer be       reassignments, the converted GS grade         shall be converted to that next higher
considered a special rate employee             and rate will become the employee’s           applicable grade.
under the Demonstration Project. These         actual GS grade and rate after leaving           (6) Exception: An employee will not
employees will, therefore, be eligible for     the demonstration project (before any         be converted to a lower grade than the
full locality pay.                             other action). For transfers, promotions,     grade held by the employee
   The adjusted salaries of these              and other actions, the converted GS           immediately preceding a conversion,
employees will not change. Rather, the         grade and rate will be used in applying       lateral reassignment, or lateral transfer
employees will receive a new basic pay         any GS pay administration rules               into the project, unless since that time
rate computed by dividing their                applicable in connection with the             the employee has undergone a reduction
adjusted basic pay (higher of special rate     employee’s movement out of the project        in band.
or locality rate) by the locality pay factor   (e.g., promotion rules, highest previous         b. Pay-Setting Provisions: An
for their area. A full locality adjustment     rate rules, pay retention rules), as if the   employee’s pay within the converted GS
will then be added to the new basic pay        GS converted grade and rate were              grade is set by converting the
rate. Adverse action and pay retention         actually in effect immediately before the     employee’s demonstration project rate
provisions will not apply to the               employee left the demonstration project.      of pay to GS rate of pay in accordance
conversion process as there will be no            a. Grade-Setting Provisions: An            with the following rules:
change in total salary.                        employee in a payband corresponding              (1) The pay conversion is done before
   d. During the first 12 months               to a single GS grade is converted to that     any geographic movement or other pay-
following conversion, employees will           grade. An employee in a payband               related action that coincides with the
receive pay increases for non-                 corresponding to two or more grades is        employee’s movement or conversion out
competitive promotion equivalents              converted to one of those grades              of the demonstration project.
when the grade level of the promotion          according to the following rules:                (2) An employee’s adjusted rate of
is encompassed within the same                    (1) The employee’s adjusted rate of        basic pay under the project (including
broadband, the employee’s performance          basic pay under the demonstration             any locality payment) is converted to a
warrants the promotion and promotions          project (including any locality payment)      GS adjusted rate on the highest
would have otherwise occurred during           is compared with step 4 rates in the          applicable rate range for the converted
that period. Employees who receive an          highest applicable GS rate range. (For        GS grade. (For this purpose, a ‘‘GS rate
in-level promotion at the time of              this purpose, a ‘‘GS rate range’’ includes    range’’ includes a rate range in (1) the
conversion will not receive a prorated         a rate in (1) the GS base schedule, (2)       GS base schedule, (2) an applicable
step increase equivalent as defined            the locality rate schedule for the locality   locality rate schedule, or (3) an
below.                                         pay area in which the position is             applicable special rate schedule.)
   e. At the time of conversion each           located, or (3) the appropriate special          (3) If the highest applicable GS rate
converted employee will be given a             rate schedule for the employee’s              range is a locality pay rate range, the
lump sum cash payment for the time             occupational series, as applicable.) If the   employee’s adjusted project rate is
credited to the employee toward what           series is a two-grade interval series, only   converted to a GS locality rate of pay.
would have been the employee’s next            odd-numbered grades are considered            If this rate falls between two steps in the
within-grade (step) increase. The              below GS–11.                                  locality-adjusted schedule, the rate must
payment for employees will be                     (2) If the employee’s adjusted project     be set at the higher step. The converted
computed by: calculating the ratio of the      rate equals or exceeds the applicable         GS unadjusted rate of basic pay would
number of weeks the employee will              step 4 rate of the highest GS grade in the    be the GS base rate corresponding to the
have spent in the current step through         band, the employee is converted to that       converted GS locality rate (i.e., same
the week prior to the day of conversion,       grade.                                        step position). (If this employee is also
to the total number of weeks in the               (3) If the employee’s adjusted project     covered by a special rate schedule as a
employee’s current waiting period for a        rate is lower than the applicable step 4      GS employee, the converted special rate
regular within-grade increase; and             rate of the highest grade, the adjusted       will be determined based on the GS step
multiplying that ratio by the dollar           rate is compared with the step 4 rate of      position. This underlying special rate
value of the employee’s next within-           the second highest grade in the               will be basic pay for certain purposes
grade increase at the time of conversion.      employee’s payband. If the employee’s         for which the employee’s higher locality
                                               adjusted rate equals or exceeds step 4        rate is not basic pay.)
Conversion or Movement from a Project                                                           (4) If the highest applicable GS rate
                                               rate of the second highest grade, the
Position to a General Schedule Position                                                      range is a special rate range, the
                                               employee is converted to that grade.
  If a demonstration project employee is          (4) This process is repeated for each      employee’s adjusted project rate is
moving to a General Schedule (GS)              successively lower grade in the band          converted to a special rate. If this rate
position not under the demonstration           until a grade is found in which the           falls between two steps in the special
project, or if the project ends and each       employee’s adjusted project rate equals       rate schedule, the rates must be set at
project employee must be converted             or exceeds the applicable step 4 rate of      the higher step. The converted GS
back to the GS system, the following           the grade. The employee is then               unadjusted rates of basic pay will be the
procedures will be used to convert the         converted at that grade. If the               GS rates corresponding to the converted
employee’s project payband to a GS-            employee’s adjusted rate is below the         special rate (i.e., same step position).
equivalent grade and the employee’s            step 4 rate of the lowest grade in the           c. Within-Grade Increase—Equivalent
project rate of pay to GS equivalent rate      band, the employee is converted to the        Increase Determinations: Service under
of pay. The converted GS grade and GS          lowest grade.                                 the demonstration project is creditable
rate of pay must be determined before             (5) Exception: If the employee’s           for within-grade increase purposes upon
movement or conversion out of the              adjusted project rate exceeds the             conversion back to the GS pay system.
demonstration project and any                  maximum rate of the grade assigned            Performance pay increases (including a
11996                              Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices

zero increase) under the demonstration                                     formative evaluation data warranted. At                effects. Measures may also be deleted
project are equivalent increases for the                                   the 5 year point, the entire                           when appropriate. Activity specific
purpose of determining the                                                 demonstration will be reexamined for                   measures may also be developed to
commencement of a within-grade                                             either: (a) permanent implementation,                  accommodate specific needs or interests
increase waiting period under 5 CFR                                        (b) change and another 3–5 year test                   which are locally unique.
531.405(b).                                                                period, or (c) expiration.                                The evaluation model for the
Personnel Administration                                                   VII. Evaluation Plan                                   Demonstration Project identifies
                                                                                                                                  elements critical to an evaluation of the
  All personnel laws, regulations, and                                        Chapter 47 (Title 5 U.S.C.) requires                effectiveness of the interventions. The
guidelines not waived by this plan will                                    that an evaluation system be                           overall evaluation approach will also
remain in effect. Basic employee rights                                    implemented to measure the
                                                                                                                                  include consideration of context
will be safeguarded and merit principles                                   effectiveness of the proposed personnel
                                                                                                                                  variables that are likely to have an
will be maintained. Supporting                                             management interventions. An
                                                                                                                                  impact on project outcomes: e.g., HRM
personnel specialists will continue to                                     evaluation plan for the entire laboratory
                                                                                                                                  regionalization, downsizing, cross-
process personnel-related actions and                                      demonstration program covering 24 DoD
                                                                                                                                  service integration, and the general state
provide consultative and other                                             labs was developed by a joint OPM/
                                                                                                                                  of the economy. However, the main
appropriate services.                                                      DOD Evaluation Committee. A
                                                                                                                                  focus of the evaluation will be on
                                                                           Comprehensive evaluation plan was
Automation                                                                                                                        intermediate outcomes, i.e., the results
                                                                           submitted to the Office of Defense
                                                                                                                                  of specific personnel system changes
  The MRDEC will continue to use the                                       Research & Engineering in 1995 and
                                                                           subsequently approved (Proposed Plan                   which are expected to improve human
Defense Civilian Personnel Data System                                                                                            resources management. The ultimate
(DCPDS) for the processing of                                              for Evaluation of the Department of
                                                                           Defense S&T Laboratory Demonstration                   outcomes are defined as improved
personnel-related data. Payroll servicing                                                                                         organizational effectiveness, mission
will continue from the respective                                          Program, Office of Merit Systems
                                                                           Oversight & Effectiveness, June 1995).                 accomplishment, and customer
payroll offices.                                                                                                                  satisfaction.
  Local automated systems will be                                          The overall evaluation effort will be
developed to support computation of                                        coordinated and conducted by OPM’s                        Data from a variety of different
performance related pay increases and                                      Personnel Resources and Development                    sources will be used in the evaluation.
awards and other personnel processes                                       Center (PRDC). The primary focus of the                Information from existing management
and systems associated with this                                           evaluation is to determine whether the                 information systems supplemented with
project.                                                                   waivers granted result in a more                       perceptual data will be used to assess
                                                                           effective personnel system than the                    variables related to effectiveness.
Experimentation and Revision                                               current as well as an assessment of the                Multiple methods provide more than
  Many aspects of a demonstration                                          costs associated with the new system.                  one perspective on how the
project are experimental. Modifications                                       The present personnel system with its               demonstration project is working.
may be made from time to time as                                           many rigid rules and regulations is                    Information gathered through one
experience is gained, results are                                          generally perceived as an impediment to                method will be used to validate
analyzed, and conclusions are reached                                      mission accomplishment. The                            information gathered through another.
on how the system is working. The                                          Demonstration Project is intended to                   Confidence in the findings will increase
MRDEC will make minor modifications,                                       remove some of those barriers and                      as they are substantiated by the different
such as changes in the occupational                                        therefore, is expected to contribute to                collection methods. The following types
series in a occupational family without                                    improved organizational performance.                   of data will be collected as part of the
further notice. Major changes, such as a                                   While it is not possible to prove a direct             evaluation: (1) Workforce data; (2)
change in the number of occupational                                       causal link between intermediate and                   personnel office data; (3) employee
families, will be published in the                                         ultimate outcomes (improved personnel                  attitudes and feedback using surveys,
Federal Register.                                                          system performance and improved                        structured interviews, and focus groups;
                                                                           organizational effectiveness), such a                  (4) local activity histories; and, (5) core
VI. Project Duration                                                                                                              measures of laboratory effectiveness.
                                                                           linkage is hypothesized and data will be
  Public Law 103–337 removed any                                           collected and tracked for both types of                VIII. Demonstration Project Costs
mandatory expiration date for this                                         outcome variables.
demonstration. The project evaluation                                         An intervention impact model                          Costs associated with the
plan adequately addresses how each                                         (Appendix B) will be used to measure                   development of the personnel
intervention will be comprehensively                                       the effectiveness of the various                       demonstration system include software
evaluated for at least the first 5 years of                                personnel system changes or                            automation, training, and project
the demonstration. Major changes and                                       interventions. Additional measures will                evaluation. All funding will be provided
modifications to the interventions can                                     be developed as new interventions are                  through the MICOM/MRDEC budget.
be made through announcement in the                                        introduced or existing interventions                   The projected annual expenses for each
Federal Register and would be made if                                      modified consistent with expected                      area is summarized in Table 1.


                                                   TABLE 1.—Projected Developmental Costs (Then Year Dollars)
                                                                                                                 FY 96    FY 97    FY 98      FY 99       FY 00      FY 01

Training ....................................................................................................   $6K      $99K     $12K
Project Evaluation ....................................................................................         $25K     $60K     $60K       $60K       $60K       $60K
Automation ...............................................................................................      $80K     $10K
                               Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices                                                          11997


                                   TABLE 1.—Projected Developmental Costs (Then Year Dollars)
                                                                                                             FY 96    FY 97    FY 98      FY 99      FY 00       FY 01

      Totals ............................................................................................   $111K    $169K    $72K      $60K        $60K       $60K



IX. Required Waivers to Law and                                           Chapter 53, Sections 5331–5336:                     upon voluntary movement to a
Regulation                                                             General Schedule pay rates.                            nonsupervisory position.
                                                                          Chapter 53, Sections 5361–5366:                        2. Title 5, Code of Federal Regulations
  Public Law 103–337 gave the DoD the
                                                                       Grade and pay retention—This waiver                       Part 300.601–605: Time-in-Grade
authority to experiment with several
                                                                       applies only to the extent necessary to                requirements—Restrictions eliminated
personnel management innovations. In
                                                                       (1) replace ‘‘grade’’ with ‘‘payband’’; (2)            under the demonstration.
addition to the authorities granted by                                                                                           Part 308.101 through 308.103:
the law, the following are the waivers of                              allow demonstration project employees
                                                                       to be treated as General Schedule                      Volunteer Service—To the extent that
law and regulation that will be                                                                                               retired engineers/scientists can perform
necessary for implementation of the                                    employees; (3) provide that pay
                                                                       retention provisions do not apply to                   voluntary services.
Demonstration Project. In due course,                                                                                            Part 315.801 and 315.802:
additional laws and regulations may be                                 conversions from General Schedule
                                                                       special rates to demonstration project                 Probationary Period—Demonstration
identified for waiver request.                                                                                                project employees in some occupational
                                                                       pay, as long as total pay is not reduced,
1. Title 5, U.S. Code                                                  and to reductions in pay due solely to                 families will have extended
                                                                       the removal of a supervisory pay                       probationary period.
   Chapter 31, Section 3111: Acceptance                                                                                          Part 316.301: Term Appointments—
of Volunteer Service—To the extent that                                adjustment upon voluntarily leaving a
                                                                       supervisory position; and (4) provide                  Adding years to exceed 4.
the acceptance of retired or separated                                                                                           Part 316.303: Tenure of Term
engineers and scientists are not                                       that an employee on pay retention
                                                                                                                              Employees—Demonstration allows for
included as volunteers under current                                   whose performance rating is ‘‘U’’ is not
                                                                                                                              conversion.
statute.                                                               entitled to 50 percent of the amount of
                                                                                                                                 Part 316.305: Eligibility for Within-
   Chapter 33, Section 3324:                                           the increase in the maximum rate of
                                                                                                                              Grade Increases.
Appointment to positions classified                                    basic pay payable for the payband of the                  Part 351.402(b): Competitive Areas—
above GS–15.                                                           employee’s position. This waiver does                  Demonstration establishes Competitive
   Chapter 41, Section 4107: Pay for                                   not apply to ST employees unless they                  Areas by Occupational Family.
Degrees.                                                               move to a GS-equivalent position under                    Part 351.403: Competitive level—To
   Chapter 41, Section 4108: Employee                                  the demonstration project under                        the extent that payband is substituted
Agreements; Service after Training—To                                  conditions that trigger entitlement to                 for grade.
the extent that employees who accept an                                pay retention.                                            Part 351.504: Credit for
expanded developmental opportunity                                        Chapter 55, Section 5545(d):                        Performance—As it relates to years of
(sabbatical) do not have to sign a                                     Hazardous duty differential—This                       credit.
continued service agreement.                                           waiver applies only to the extent                         Part 351.701: Assignment Involving
   Chapter 43, Sections 4301(3):                                       necessary to allow demonstration                       Displacement—To the extent that
Definitions.                                                           project employees to be treated as                     employees bump and retreat rights will
   Chapter 43, Section 4302:                                           General Schedule employees. This                       be limited to one payband except in the
Establishment of Performance Appraisal                                 waiver does not apply to ST employees.                 case of 30% preference eligibles which
Systems.                                                                  Chapter 57, Section 5753, 5754, and                 is a position equivalent to five GS
   Chapter 43, Section 4303(a), (b), and                               5755: Recruitment and Relocation                       grades below the minimum grade level
(c): Actions Based on Unacceptable                                     Bonuses, Retention Allowances and                      of his/her payband.
Performance.                                                           Supervisory Differentials—This waiver                     Part 430 subpart B, Performance
   Chapter 51, Sections 5101–5111:                                     applies only to the extent necessary to                Appraisal for General Schedule,
Related to classification standards and                                allow employees and positions under                    Prevailing Rate, and Certain Other
grading; to the extent that white collar                               the demonstration project to be treated                Employees: Employees under the
employees will be covered by                                           as employees and positions under the                   demonstration project will not be
broadbanding. Pay category                                             General Schedule. This waiver does not                 subject to the requirements of this
determination criteria for federal wage                                apply to ST employees who continue to                  subpart.
system positions remain unchanged.                                     be covered by these provisions, as                        Part 432: Modified to the extent that
   Chapter 53, Sections 5301, 5302 (8)                                 appropriate.                                           an employee may be removed, reduced
and (9), 5303 and 5304: Sections 5301,                                    Chapter 75, Section 7512(3): Adverse                in band level with a reduction in pay,
5302, and 5304 are waived only to the                                  actions—This waiver applies only to the                reduced in pay without a reduction in
extent necessary to allow demonstration                                extent necessary to replace ‘‘grade’’ with             band level and reduced in band level
project employees to be treated as                                     ‘‘payband’’.                                           without a reduction in pay based on
General Schedule employees and to                                         Chapter 75, Section 7512(4): Adverse                unacceptable performance. Also
allow basic rates of pay under the                                     actions—This waiver applies only to the                modified to delete reference to critical
demonstration project to be treated as                                 extent necessary to provide that adverse               element. For employees who are
scheduled rates of pay. This waiver does                               action provisions do not apply to (1)                  reduced in band level without a
not apply to ST employees who                                          conversions from General Schedule                      reduction in pay, Sections 432.105 and
continue to be covered by these                                        special rates to demonstration project                 432.106(a) do not apply.
provisions, as appropriate.                                            pay, as long as total pay is not reduced                  Part 432, Sections 104 and 105:
   Chapter 53, Section 5305: Special                                   and (2) reductions in pay due to the                   Proposing and Taking Action Based on
Rates.                                                                 removal of a supervisory pay adjustment                Unacceptable Performance.
11998               Federal Register / Vol. 62, No. 49 / Thursday, March 13, 1997 / Notices

   Part 511: Classification Under the       demonstration project employees to be      1515 Operations Research Analyst
General Schedule—To the extent that         treated as General Schedule employees.     1520 Mathematician
grades are changed to broadbands, and       This waiver does not apply to ST           1529 Mathematician Stat
that white collar positions are covered     employees.                                 1550 Computer Scientist
by broadbanding.                               Part 575, subparts A, B, C, and D:
   Part 530, subpart C: Special salary      Recruitment Bonuses, Relocation            II. E&S Support
rates.                                      Bonuses, Retention Allowances and          0028 Environ Protec Specialist
   Part 531, subparts B, D, and E:          Supervisory Differentials—This waiver      0301 Data & Configuration Management,
Determining rate of basic pay, within-      applies only to the extent necessary to      Standardization
grade increases, and quality step           allow employees and positions under
increases.                                                                             0334 Computer Specialist
                                            the demonstration project covered by
   Part 531, subpart F: Locality pay—       broadbanding to be treated as employees    0391 Telecommunications
This waiver applies only to the extent      and positions under the General            0802 Engineering Technician
necessary to allow demonstration            Schedule. This waiver does not apply to    0809 Construction Rep
project employees to be treated as          ST employees who continue to be            0856 Electronics Technician
General Schedule employees, and basic       covered by these provisions, as            1001 General Arts & Information
rates of pay under the demonstration        appropriate.                               1040 Language Specialist
project to be treated as scheduled             Part 752.401 (a)(3): Adverse Actions—   1082 Technical Information Writer
annual rates of pay. This waiver does       This waiver applies only to the extent     1083 Technical Writer/Editor
not apply to ST employees who               necessary to replace ‘‘grade’’ with        1150 Industrial Specialist
continue to be covered by these             ‘‘payband.’                                1311 Physical Sciences Tech
provisions, as appropriate.                    Part 752.401(a)(4): Adverse Actions—
   Part 536: Grade and pay retention—                                                  1410 Librarian (Phy Sci & Engr)
                                            This waiver applies only to the extent
This waiver applies only to the extent                                                 1412 Technical Information Spec
                                            necessary to provide that adverse action
necessary to (1) replace ‘‘grade’’ with     provisions do not apply to (1)             1499 Student Trainee
‘‘payband’; (2) provide that pay            conversions from General Schedule          1521 Mathematics Technician
retention provisions do not apply to        special rates to demonstration project     1670 Equipment Specialist
conversions from General Schedule           pay, as long as total pay is not reduced   1910 Quality Assurance Specialist
special rates to demonstration project      and (2) reductions in pay due to the
pay, as long as total pay is not reduced,                                              III. Business Management
                                            removal of a supervisory pay adjustment
and to reductions in pay due solely to      upon voluntary movement to a               0301 Misc Admin & Program
the removal of a supervisory pay            nonsupervisory position.                   0340 Program Manager
adjustment upon voluntarily leaving a                                                  0341 Administrative Officer
supervisory position; and (3) provide       Appendix A: Occupational Series by
                                            Occupational Family                        0342 Support Services Spec
that an employee on pay retention                                                      0343 Mgmt/Prog Analyst
whose performance rating is ‘‘U’’ is not    I. Engineers & Scientists                  0560 Budget Analyst
entitled to 50 percent of the amount of
the increase in the maximum rate of         0801 General Engineer                      1102 Contract Specialist
basic pay payable for the payband of the    0806 Materials Engineer                    2001 General Supply Spec
employee’s position. This waiver does       0808 Architecture
                                                                                       IV. General Support
not apply to ST employees unless they       0810 Civil Engineer
move to a GS-equivalent position under      0819 Environmental Engineer                0085 Guard
the demonstration project under             0830 Mechanical Engineer                   0302 Messenger
conditions that trigger entitlement to      0850 Electrical Engineer                   0303 Misc Clerk and Asst
pay retention.                              0854 Computer Engineer                     0305 Mail Clerk
   Part 550.703: Severance Pay—This         0855 Electronics Engineer                  0312 Clerk-Stenographer
waiver applies only to the extent           0861 Aerospace Engineer                    0318 Secretary
necessary to modify the definition of       0892 Ceramics Engineer                     0326 Ofc Automation Clerk
‘‘reasonable offer’’ by replacing ‘‘two     0893 Chemical Engineer
                                                                                       0344 Management Assistant
grade or pay levels’’ with ‘‘one band       0896 Industrial Engineer
                                                                                       0561 Budget Assistant
level’’ and ‘‘grade or pay level’’ with     0899 Student Trainee (Engr)
                                            1301 Physical Scientist                    1106 Procurement Clerk
‘‘band level’.
   Part 550.902: Hazardous Duty             1310 Physicist                             1411 Library Technician
Differential—This waiver applies only       1320 Chemist                               2005 Supply Technician
to the extent necessary to allow            1321 Metallurgist                          BILLING CODE 6325–01–p
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Appendix C. Performance Elements            open to compromise on areas of               working relationships with customers to
   All employees will be rated against at   difference, if allowed by technology,        identify their needs, quantifies those
least the five generic performance          scope, budget, or direction. Exercises       needs, and develops practical solutions.
elements listed through ‘‘e’’ below.        tact and diplomacy and maintains             Keeps customer informed and prevents
Technical competence is a mandatory         effective relationships, particularly in     surprises. Within the scope of job
critical element. Other elements may be     immediate work environment and               responsibility, seeks out and develops
identified as critical by agreement         teaming situations. Always willing to        new programs and/or reimbursable
between the rater and the employee. In      give assistance. Shows appropriate           customer work. (Weight Range: 10 to 50)
case of disagreements, the decision of      respect and courtesy. (Weight Range: 5
                                                                                            f. Management/Leadership. Actively
the supervisor will prevail. Generally,     to 15)
                                                                                         furthers the mission of the organization.
any performance element weighted 25            c. Communications. Provides or
                                                                                         As appropriate, participates in the
or higher should be critical. However,      exchanges oral/written ideas and
                                                                                         development and implementation of
only those employees whose duties           information in a manner that is timely,
                                                                                         strategic and operational plans of the
require manager/leader responsibilities     accurate and cogent. Listens effectively
                                                                                         organization. Develops and implements
will be rated on element ‘‘f.’’             so that resultant actions show
                                                                                         tactical plans. Exercises leadership
Supervisors will be rated against an        understanding of what was said.
                                                                                         skills within the environment. Mentors
additional critical performance element,    Coordinates so that all relevant
                                            individuals and functions are included       junior personnel in career development,
listed at ‘‘g’’ below:                                                                   technical competence, and interpersonal
   a. Technical Competence. Exhibits        in, and informed of, decisions and
                                            actions. (Weight Range: 5 to 15)             skills. Exercises due responsibility of
and maintains current technical
                                                                                         technical/acquisition/organizational
knowledge, skills, and abilities to            d. Resource Management. Meets
                                            schedules and deadlines, and                 positions assigned to them. (Weight
produce timely and quality work with
                                            accomplishes work in order of priority;      Range: 0 to 50)
the appropriate level of supervision.
Makes prompt, technically sound             generates and accepts new ideas and            g. Supervision/EEO. Works toward
decisions and recommendations that          methods for increasing work efficiency;      recruiting, developing, motivating, and
add value to mission priorities and         effectively utilizes and properly controls   retaining quality team members; takes
needs. For appropriate career paths,        available resources; supports                timely/appropriate personnel actions,
seeks and accepts developmental and/or      organization’s resource development          applies EEO/merit principles;
special assignments. Adaptive to            and conservation goals. (Weight Range:       communicates mission and
technological change. (Weight range: 15     15 to 50)                                    organizational goals; by example,
to 50)                                         e. Customer Relations. Demonstrates       creates a positive, safe, and challenging
   b. Working Relationships. Accepts        care for customers through respectful,       work environment; distributes work and
personal responsibility for assigned        courteous, reliable and conscientious        empowers team members. (Weight
tasks. Considerate of others’ views and     actions. Seeks out and develops solid        Range: 15 to 50)
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[FR Doc. 97–6168 Filed 3–10–97; 8:45 am]
BILLING CODE 6325–01–C

								
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