NSPS is Making Meaningful Distinctions in Performance, and We’re Rewarding Exceptional Performance in an Exceptional Manner

By: Steve Watkins

“How do you explain to someone you call valued that they’re worth less than what Congress deemed fit to give employees in another pay system?” Perkinson said. “That’s a hard sell.”

“There were very few Level 3s who didn’t get at least the full” GS raise, Bunn said. Some of those people might have been in pay pools that had many other employees who rated highly and, therefore, earned more shares of the raise, he said. Others might have reached their pay bands’ salary caps and were ineligible for further pay raises.
Perkinson said the distribution of raises appears to be working as intended.

“With the age of the system, I think it’s come out pretty well and it’s doing what it was anticipated to do,” he said.

On the other hand, one pay expert thinks NSPS ratings might be too generous. Only 1,594 employees — 1.5 percent of the NSPS population — were judged to be underperforming and did not receive performance- based raises or bonuses. “That’s a little bit on the low side,” said Paul Dorf, managing director of the human resources consulting firm Compensation Resources Inc. And more than 36 percent of NSPS employees, or 37,202, earned performance ratings of 4, which Dorf said might be too high

NSPS does not force its ratings distribution along a bell curve, but Dorf said its results should probably  be closer to a curve of the type recommended by the human resources professionals association World at Work. That group’s curve said that about 60 percent of employees should usually be rated at Level 3, 15 percent at Level 2 or Level 4, and 5 percent of employees at Level 1 or Level 5. Under NSPS, 0.2 percent of employees received Level 1 ratings, 1.3 percent received Level 2 ratings, 56 percent received Level 3 ratings, 36 percent received Level 4 ratings, and 5.1 percent received Level 5 ratings
Bunn disagreed.

“The Department of Defense is a high-performing organization,” Bunn said. “We do generally hire good, solid, talented people. But if somebody’s an unacceptable performer in the United States Department of Defense, which has the most important mission in the federal government, we can’t afford to be paying them salary increases and bonuses for doing work that’s unacceptable.”

Bunn was not sure whether the high percentage of Level 4 employees was too high. His office will track those results in coming years to see how they change, he said.

The performance rating system also helps to identify people who aren’t pulling their weight and start a conversation about how to improve, Bunn said. That could include figuring out if more training is needed or even if someone needs to move to a position better  suited to their skills, he said.

“Some people might be mismatched to their job,” Bunn said. “It’s not a case of they won’t do the job, it’s that they can’t do it.”

But people who do not improve after receiving low marks might need to be fired, Bunn said.