11700 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices

OFFICE OF PERSONNEL

MANAGEMENT

Proposed Laboratory Personnel

Management Demonstration Project;

Aviation Research, Development and

Engineering Center, Department of the

Army, U.S. Army Aviation and Troop

Command (ATCOM), Federal Center,

St. Louis, Missouri

AGENCY: Office of Personnel

Management.

ACTION: Notice of Intent to Implement

Demonstration Project.

SUMMARY: Title VI of the Civil Service

Reform Act, 5 U.S.C. 4703, authorizes

the Office of Personnel Management

(OPM) to conduct demonstration

projects that experiment with new and

different personnel management

concepts to determine whether such

change in personnel policy or

procedures would result in improved

Federal personnel management.

Public Law 103–337, October 5, 1994,

permits the Department of Defense

(DoD), with the approval of the OPM, to

carry out personnel demonstration

projects generally similar in nature to

the China Lake demonstration project at

DoD Science and Technology (S&T)

Reinvention Laboratory sites. The Army

is proposing five demonstration sites

initially: the Army Research Laboratory,

U.S. Army Waterways Experiment

Station, Medical Research Materiel

Command, the Missile Research,

Development and Engineering Center,

and the Aviation Research,

Development, and Engineering Center.

This proposal is for the Aviation

Research, Development, and

Engineering Center (AVRDEC).

DATES: To be considered, written

comments must be submitted on or

before May 20, 1997; public hearings

will be scheduled as follows:

April 23, 1997, at 10:00 a.m., Aviation

Applied Technology Directorate, Fort

Eustis, Virginia

April 24, 1997, at 10:00 a.m., Federal

Center, St. Louis, Missouri

May 6, 1997, at 10:00 a.m.,

Aeroflightdynamics Directorate,

National Aeronautics and Space

Administration—Ames Research

Center, Moffett Field, California

At the time of the hearings, interested

persons or organization may present

their written or oral comments on the

proposed demonstration project. The

hearing will be informal.

Anyone wishing to testify should

contact the person listed under FOR

FURTHER INFORMATION CONTACT, and state

the hearing location, so that OPM can

plan the hearings and provide sufficient

time for all interested persons and

organizations to be heard. Priority will

be given to those on the schedule, with

others speaking in any remaining

available time. Each speaker’s

presentation will be limited to ten

minutes. Written comments may be

submitted to supplement oral testimony

during the public comment period.

ADDRESSES: Comments may be mailed to

Fidelma A. Donahue, U.S. Office of

Personnel Management, 1900 E Street,

NW, room 7460, Washington, DC 20415;

public hearings will be held at the

Federal Center, Auditorium, Building

105, 4300 Goodfellow Boulevard, St.

Louis, Missouri; the Aviation Applied

Technology Directorate, Jacobs Theater,

Ft. Eustis, Virginia; and the U.S. Army

Aeroflightdynamics Directorate, Main

Auditorium, Building 201, NASA—

Ames Research Center, Moffet Field,

California.

FOR FURTHER INFORMATION CONTACT: (1)

On proposed demonstration project:

James A. Ray, U.S. Army Aviation and

Troop Command, ATTN: AMSAT–R–E,

Federal Center, St. Louis, MO, 63120–

1798, 314 263–1100; (2) On proposed

demonstration project and public

hearing: Fidelma A. Donahue, U.S.

Office of Personnel Management, 1900 E

Street, NW, Room 7460, Washington,

DC 20415, 202–606–1138.

SUPPLEMENTARY INFORMATION: Since

1966, many studies of Department of

Defense (DoD) laboratories have been

conducted on laboratory quality and

personnel. Almost all of these studies

have recommended improvements in

civilian personnel policy, organization,

and management. The proposed project

involves simplified job classification,

pay banding, streamlined hiring

processes, pay-for-performance

management system, expanded

developmental opportunity, and

modified Reduction-In-Force (RIF)

procedures.

Office of Personnel Management.

James B. King,

Director.

Table of Contents

I. Executive Summary

II. Introduction

A. Purpose

B. Problems With the Present System

C. Changes Required/Expected Benefits

D. Participating Organization

E. Participating Employees

F. Labor Participation

G. Project Design

H. Personnel Management Board

III. Personnel System Changes

A. Broadbanding

B. Pay-for-Performance Management

System

C. Classification

D. Hiring and Appointment Authorities

E. Employee Development

F. Revised Reduction-in-Force (RIF)

Procedures

IV. Training

V. Conversion

VI. Project Duration

VII. Evaluation Plan

VIII. Demonstration Project Costs

IX. Required Waivers to Laws and

Regulations

Appendix A: Occupational Series by

Occupational Family

Appendix B: Project Evaluation and

Oversight

Appendix C: Performance Elements

Appendix D: Benchmark Performance

Standards

I. Executive Summary

This project was designed by the

Department of the Army, with

participation of and review by the

Department of Defense (DoD) and the

Office of Personnel Management (OPM).

The purpose of the project is to achieve

the best workforce for the AVRDEC

mission, adjust the workforce for

change, and improve workforce quality.

The foundations of this project are

based on the concept of linking

performance to pay for all covered

positions; simplifying paperwork and

the processing of classification and

other personnel actions; emphasizing

partnerships among management,

employees, and unions representing

covered employees; and delegating

classification and other authorities to

line managers. Additionally, the

research intellect of the AVRDEC

workforce will be revitalized through

the use of expanded opportunities for

employee development. These

opportunities will reinvigorate the

creative intellect of the research and

development community.

Development and execution of this

project will be in-house budget neutral,

based on a baseline of September 1995

in-house costs and consistent with the

Department of the Army (DA) plan to

downsize laboratories. Army managers

at the DoD S&T Reinvention Laboratory

sites will manage and control their

personnel costs to remain within

established in-house budgets. An inhouse budget is a compilation of costs

of the many diverse components

required to fund the day-to-day

operations of a laboratory. These

components generally include pay of

people (labor, benefits, overtime,

awards), training, travel, supplies, noncapital equipment, and other costs

depending on the specific function of

the activity.

This project will be under the joint

sponsorship of the Assistant Secretary

of the Army for Research, Development
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and Acquisition and the Assistant

Secretary of the Army for Manpower

and Reserve Affairs. The Commander,

U.S. Army Materiel Command, will

execute and manage the project. Project

oversight within the Army will be

achieved by an executive steering

committee made up of top-level

executives, co-chaired by the Deputy

Assistant Secretary of the Army for

Research and Technology and the

Deputy Assistant Secretary of the Army

(Civilian Personnel Policy)/Director,

Civilian Personnel. Oversight external to

the Army will be provided by the

Department of Defense and the Office of

Personnel Management.

II. Introduction

A. Purpose

The purpose of the project is to

demonstrate that the effectiveness of

Department of Defense (DoD)

laboratories can be enhanced by

allowing greater managerial control over

personnel functions and, at the same

time, expanding the opportunities

available to employees through a more

responsive and flexible personnel

system. The quality of DoD laboratories,

their people, and products has been

under intense scrutiny in recent years.

This perceived deterioration of quality

is due, in substantial part, to the erosion

of control which line managers have

over their human resources. This

demonstration, in its entirety, attempts

to provide managers, at the lowest

practical level, the authority, control,

and flexibility needed to achieve quality

laboratories and quality products.

B. Problems with the Present System

The AVRDEC products contribute to

the readiness of U.S. forces and to the

stability of the American economy. To

do this, the AVRDEC must acquire and

retain an enthusiastic, innovative, and

highly educated and trained workforce,

particularly scientists and engineers.

The AVRDEC must be able to compete

with the private sector for the best talent

and be able to make job offers in a

timely manner with the attendant

bonuses and incentives to attract high

quality employees. Today, industry

laboratories can make an offer of

employment to a promising new hire

before the government can prepare the

paperwork necessary to begin the

recruitment process.

Currently, jobs are described using a

cumbersome classification system that

is overly complex and specialized. This

hampers a manager’s ability to shape the

workforce and match the positions

while making best use of employees.

Managers must be given local control of

positions and their classification to

move both their employees and

vacancies within their organization to

other lines of the business activities to

match the life cycle needs of supported

customers.

These issues work together to hamper

supervisors in all areas of human

resource management. Hiring

restrictions and overly complex job

classifications, coupled with poor tools

for rewarding and motivating employees

and a system that does not assist

managers in removing poor performers

builds stagnation in the workforce and

wastes valuable time.

C. Changes Required/Expected Benefits

This project is expected to

demonstrate that a human resource

system tailored to the mission and

needs of the AVRDEC will result in: (a)

increased quality in the total workforce

and the products they produce; (b)

increased timeliness of key personnel

processes; (c) increased retention of

high quality employees and separation

rates of poor quality employees; and (d)

increased customer satisfaction with the

AVRDEC and its products by all

customers it serves.

The AVRDEC demonstration program

builds on the successful features of

demonstration projects at China Lake

and the National Institute of Standards

and Technology (NIST). These

demonstration projects have produced

impressive statistics on the job

satisfaction for their employees versus

that for the federal workforce in general.

Therefore, in addition to expected

benefits mentioned above, the AVRDEC

demonstration expects to find more

satisfied employees on many aspects of

the demonstration including pay equity,

classification decisions, and career

development opportunities. A full range

of measures will be collected during

project evaluation (Section VII).

D. Participating Organization

AVRDEC has approximately 785

employees covered by the project.

Approximately 59 percent of the

employees are located at the Federal

Center, St. Louis, Missouri, with the

remaining located at the following sites:

Moffett Field, California; St. Paul,

Minnesota; Fort Eustis, Virginia;

Hampton, Virginia, and Washington,

DC.

Successor organization(s) which may

result from actions associated with the

1995 Base Realignment and Closure

Commission will continue coverage in

the demonstration project.

E. Participating Employees

The demonstration project includes

civilian appropriated funded employees

in the competitive and excepted service

paid under the General Schedule (GS)

pay system. Scientific and Professional

(ST) employees will only be included

for the provisions of performance

appraisal, awards, and employee

development; their classification,

staffing, and compensation will not

change. Senior Executive Service

employees, Federal Wage System

employees, and employees in the

Civilian Intelligence Personnel

Management System will not be covered

in the demonstration project.

Additionally, DA interns will not be

converted to the demonstration until

they complete their intern program.

Personnel added to the laboratory in

like positions covered by the

demonstration (either through

appointment, promotion, reassignment,

change to a lower grade or where their

functions and positions have been

transferred into the laboratory) will be

converted to the demonstration project

F. Labor Participation

The National Federation of Federal

Employees (NFFE) Local 405 currently

represents many GS employees at

AVRDEC, St. Louis. However, based

upon the 1995 Base Realignment and

Closure (BRAC) commission action

disestablishing ATCOM, these

employees will be transferred to a newly

established major subordinate command

prior to their participation in the

demonstration project. It is uncertain, at

this time, as to what labor organization,

if any, will represent AVRDEC

employees at the time the

demonstration project is implemented.

Therefore, NFFE has not been

involved in the development of the

project. As a courtesy, NFFE was

briefed, along with all potentially

affected employees, prior to the

submission of this plan. However, it is

noted that, if an exclusive representative

is recognized prior to final

implementation of the demonstration

project, the AVRDEC may have

bargaining obligations to that

representative and is prepared to fulfill

such prior to implementation.

Currently, no union represents

AVRDEC employees at the Moffett

Field, Fort Eustis, and Hampton

geographic locations.

G. Project Design

As a result of the 1995 BRAC

recommendation transferring the

AVRDEC to Redstone Arsenal; the

subsequent identification of the
11702 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices

AVRDEC as an Army Science and

Technology Reinvention Laboratory;

and ATCOM and the U.S. Army Missile

Command (MICOM) management

decisions to maintain two RDECs at

Redstone Arsenal with common

functional areas merged within the

MRDEC; the Executive Director,

AVRDEC, decided to accelerate the

AVRDEC role in the civilian personnel

demonstration project to that of an

initial demonstration site. Since the two

RDECs will be collocated at Redstone

Arsenal, the Executive Director decided

to formulate the AVRDEC personnel

demonstration proposal based on the

MRDEC proposal, taking maximum

advantage of the MRDEC experience and

lessons learned in developing its

proposal. The following is a brief

synopsis of the combined AVRDEC/

MRDEC demonstration project design.

An Integrated Process Team approach

was used to develop the attributes of

this personnel demonstration proposal.

The team was lead by MRDEC

management, and team members came

from managers and associates from the

MRDEC, AFGE Local 1858, the Civilian

Personnel Office (CPO), and several

other major functional organizations

within MICOM. The AVRDEC

assembled a similar team using

management, business management,

and CPO personnel.

This personnel system design has

been subjected to critical reviews by

both MRDEC and MICOM. Additionally,

negotiations with AFGE Local 1858

have influenced the design in areas of

significant concern to bargaining unit

employees.

The design was based upon

exhaustive study of broadbanding

systems currently practiced in the

Federal sector. Additionally,

consultation was provided by the

designers of the broadbanding systems

practiced by the Navy China Lake

experiment and the National Institute of

Standards and Technology. The

preliminary demonstration concept was

briefed to the ATCOM Command Group

and the AVRDEC workforce, at all

geographic locations. During these

briefing sessions, employees were

afforded the opportunity to ask

questions and were given a list of points

of contact for concerns and questions.

Subsequent concept revisions have

evolved from critical reviews by

headquarters elements of the

Department of the Army, Department of

Defense, and the Office of Personnel

Management.

H. Personnel Management Board

The AVRDEC intends to establish an

appropriate balance between the

personnel management authority and

accountability of supervisors and of the

oversight responsibilities of a Personnel

Management Board (PMB). The

Executive Director will delegate

management and oversight of the Project

at AVRDEC to a Personnel Management

Board whose members, Chairperson,

and staff will be appointed by the

Executive Director. The PMB

membership include representation

from the major geographic locations of

the AVRDEC and will be tasked with the

following:

1. Overseeing the civilian pay budget,

2. Determining the composition of the

pay-for-performance pay pools in

accordance with the guidelines of this

proposal and internal procedures,

3. Administering funds allocation to

pay pool managers,

4. Reviewing operation of AVRDEC

pay pools,

5. Reviewing hiring and promotion

salaries as well as exceptions to pay-forperformance salary increases,

6. Providing guidance to pay pool

managers,

7. Monitoring award pool distribution

by organization or any other special

categorization,

8. Selecting participants for the

Expanded Developmental Opportunity

Program, long term training, and any

special developmental assignments,

9. Managing promotions to stay

within ‘‘high grade’’ controls,

10. Addressing in-house budget

neutrality issues to include tracking of

average salaries,

11. Assessing the need for changes to

demonstration procedures and policies.

III. Personnel System Changes

A. Broadbanding

Occupational Families

Occupations at the AVRDEC will be

grouped into occupational families.

Occupations will be grouped according

to similarities in type of work,

customary requirements for formal

training or credentials, and in

consideration of the business practices

at the AVRDEC. The common patterns

of advancement within the occupations

as practiced at DoD Laboratories and in

the private sector will also be

considered. The current occupations

and grades have been examined, and

their characteristics and distribution

have served as guidelines in the

development of the four occupational

families described below:

1. Engineers and Scientists (E&S).

This occupational family includes all

technical professional positions, such as

engineers, physicists, and

mathematicians. Predominantly,

specific course work or educational

degrees are required for these

occupations.

2. E&S Support. This occupational

family contains positions that directly

support the E&S mission: it includes

specialized functions in such fields as

technical information management,

librarians, equipment specialists,

quality assurance, and engineering and

electronics technicians. Employees in

these jobs may or may not require

college course work. However, training

and skills in the various electrical,

mechanical, chemical or computer crafts

and techniques are generally required.

3. Business Management. This

occupational family contains

specialized functions in such fields as

accounting, administrative, counsel,

finance, management analysis,

personnel, procurement, public

information, and safety. Analytical

ability and specialized knowledge in

administrative fields or special degrees

are required.

4. General Support. This occupational

family is composed of positions for

which minimal formal education is

needed, but for which special skills,

such as office automation or shorthand,

are usually required. Clerical work

usually involves the processing and

maintenance of records. Assistant work

requires knowledge of methods and

procedures within a specific

administrative area. Other support

functions include the work of

secretaries and office automation clerks.

Paybands

Each occupational family will be

composed of discrete paybands (levels)

corresponding to recognized

advancement within the occupations.

These paybands will replace grades.

They will not be the same for all

occupational families. Each

occupational family will be divided into

four to five paybands; each payband

covering the same pay range now

covered by one or more grades. A salary

overlap, similar to the current overlap

between GS grades, will be maintained.

Ordinarily an individual will be hired

at the lowest salary in a payband.

Exceptional qualifications, specific

organizational requirements, or other

compelling reasons may lead to a higher

entrance level within a band.

The proposed paybands for the

occupational families and how they

relate to the current GS grades are

shown in Figure 1. Application of the

Fair Labor Standards Act (FLSA) within

each payband is also shown in Figure 1.

This payband concept has the following

advantages:
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices 11703

1. It may reduce the number of

classification decisions required during

an employee’s career.

2. It simplifies the classification

decision-making process and

paperwork. A payband covers a larger

scope of work than a grade, and thus

will be defined in shorter and simpler

language.

3. It supports delegation of

classification authority to line managers.

4. It provides a broader range of

performance-related pay for each level.

In many cases, employees whose pay

would have been frozen at the top step

of a grade will now have more potential

for upward movement in the broader

payband.

5. It prevents the progression of low

performers through a payband by mere

longevity, since job performance serves

as the basis for determining pay.

The AVRDEC broadbanding plan

expands the broadbanding concept used

at China Lake and NIST by creating

Payband V of the Engineers and

Scientists occupational family. This

payband is designed for Senior

Technical Managers and Senior

Scientists/Engineers.

Current OPM guidelines covering the

Senior Executive System and Scientific

and Professional (ST) positions do not

fully meet the needs of AVRDEC. The

SES designation is appropriate for

executive level managerial positions

whose classification exceeds the GS–15

grade level. The primary knowledges

and abilities of SES positions relate to

supervisory and managerial

responsibilities. Positions classified as

ST are designed for bench research

scientists and engineers. OPM

guidelines state that the duties and

responsibilities of ST positions must not

include any managerial or supervisory

responsibility.

AVRDEC currently has several

division/office chief positions that have

characteristics of both SES and ST

classifications. These division/office

chiefs in AVRDEC are responsible for

supervising other GS–15 positions,

including function supervisors and nonsupervisory researcher engineers and

scientists. AVRDEC management

considers the primary requirement for

division/office chiefs to be

knowledgeable of and have expertise in

the specific scientific and technology

areas related to the mission of their

organizations. The ability to manage,

while important, is considered

secondary. Historically, these positions

have been filled by employees who

possess primarily scientific/engineering

credentials and who are considered

experts in their field by the scientific

community. While it is clear these

positions warrant classification beyond

the GS-15 level, attempts to classify

most of the positions as SES have been

difficult because the size of the

organizations and their location in the

Center are not competitive with other

SES level positions. Classification of the

positions as ST is also not an option

because the supervisory responsibilities

cannot be ignored.

As preeminent scientists and

engineers, incumbents of ST positions

are responsible for specific research and

development efforts that are continuing

and long range, generally requiring the

efforts of a team. These ST positions

usually serve as team leaders which

means there is some responsibility for

assigning work, coordinating results,

and redirecting efforts. It is

administratively convenient for these

research team leaders to also participate

in performance management. The

restriction of including supervisory

authorities in ST jobs has forced

AVRDEC to exclude any mention of the

team leader responsibilities in these

position descriptions for fear that they

will be interpreted as characteristic of

SES rather than ST positions.

Consequently, AVRDEC has some

positions that do not strictly conform to

OPM definitions of either the SES or ST.

The purpose of Payband V is to

overcome the difficulties identified

above by creating a category for two

types of positions—the Senior Technical

Manager (with full supervisory

authority) and the Senior Engineer/

Scientist (less than full supervisory

authority or no supervisory authority).

Current GS–15 division/office chiefs

will convert into the demonstration

project at Payband IV. After conversion

they will be reviewed against

established criteria added to determine

if they should be reclassified to Payband

V. Other positions possibly meeting

criteria for classification to Payband V

will be reviewed on a case-by-case basis.

The proposed salary range is the same

as currently exists for ST positions

(minimum of 120% of the minimum

rate of basic pay for GS–15 with a

maximum of the basic rate of pay

established for Level IV of the Executive

Schedule).

Vacant positions in Payband V will be

competitively filled to ensure that

selections are made from among the

world’s preeminent researchers and

technical leaders in the specialty fields.

AVRDEC will capitalize on the

efficiencies that can accrue from central

recruiting by continuing to use the

expertise of the Army Materiel

Command SES Office as the recruitment

agent. Panels will be created to assist in

filling Payband V positions. Panel

members will be selected from a pool of

current AVRDEC SES members, ST

employees and those in Payband V, and

an equal number of individuals of

equivalent stature from outside the

Center to ensure impartiality, breadth of

technical expertise, and a rigorous and

demanding review. The panel will

apply criteria developed largely from

the current OPM Research Grade

Evaluation Guide for positions

exceeding the GS–15 level. The same

procedure will be used for evaluating

Senior Technical Manager positions

except the rating criteria will be

adjusted to account for the difference in

the positions, such as greater emphasis

on technical program management and

supervisory abilities.

The final component of Payband V is

the management of all Payband V assets.

Specifically, this includes authority to

classify, create, downgrade or abolish

positions as circumstances warrant;

recruit and reassign employees in this

payband; set pay and to have their

performance appraised under this

project’s Pay for Performance System.

This authority will be executed within

parameters to be established at the DA

level, to include controls on the

numbers of Payband V positions and

recruitment/promotion criteria. The

specific details regarding control and

management of Payband V assets will be

included in the demonstration’s

operating procedures. The laboratory

wants to demonstrate increased

effectiveness by gaining greater

managerial control and authority,

consistent with merit, affirmative

action, and equal employment

opportunity principles.

BILLING CODE 6325–01–P
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BILLING CODE 6325–01–C

Fair Labor Standards Act

Fair Labor Standards Act (FLSA)

exemption and nonexemption

determinations will be made consistent

with criteria found in 5 CFR Part 551.

There are eight paybands (see Figure 1)

where employees can be either exempt

or nonexempt from overtime provisions.

For these eight paybands, supervisors

with classification authorities will make

the determinations on a case-by-case

basis by comparing the duties and

responsibilities assigned, the

classification standards for each

payband, and the 5 CFR part 551 FLSA

criteria. Additionally, the advice and

assistance of the Civilian Personnel

Advisory Center/Civilian Personnel

Operations Center (CPAC/CPOC) will be

obtained in making determinations as

part of the performance review process.

The benchmark position descriptions

will not be the sole basis for the

determination. Basis for exemption will

be documented and attached to each

description. Exemption criteria will be

narrowly construed and applied only to

those employees who clearly meet the

spirit of the exemption. Changes will be

documented and provided to the CPAC/

CPOC, as appropriate.

Simplified Assignment Process

Today’s environment of downsizing

and workforce transition mandates that

the AVRDEC have increased flexibility

to assign individuals. Broadbanding can

be used to address this need. As a result

of the assignment to a particular level

descriptor, the organization will have

increased flexibility to assign an

employee, without pay change, within

broad descriptions consistent with the

needs of the organization, and the

individual’s qualifications and rank or

level. Subsequent assignments to

projects, tasks, or functions anywhere

within the organization requiring the

same level and area of expertise, and

qualifications would not constitute an

assignment outside the scope or

coverage of the current level descriptor.

Such assignments within the coverage

of the generic descriptors are

accomplished without the need to

process a personnel action. For instance,

a technical expert can be assigned to

any project, task, or function requiring

similar technical expertise. Likewise, a

manager could be assigned to manage

any similar function or organization

consistent with that individual’s

qualifications. This flexibility allows a

broader latitude in assignments and

further streamlines the administrative

process and system.

Promotion

A promotion is a move of an

employee to (1) a higher payband in the

same occupational family or (2) a

payband in another occupational family

in combination with an increase in the

employee’s salary. Positions with

known promotion potential to a specific

band within an occupational family will

be identified when they are filled. Not

all positions in an occupational family

will have promotion potential to the

same band. Movement from one

occupational family to another will

depend upon individual knowledge,

skills, and abilities, and needs of the

organization.

Promotions will be processed under

competitive procedures in accordance

with merit principles and requirements

and the local merit promotion plan. The

following actions are excepted from

competitive procedures:

(a) Re-promotion to a position which

is in the same payband and

occupational family as the employee

previously held on a permanent basis

within the competitive service.

(b) Promotion, reassignment,

demotion, transfer or reinstatement to a

position having promotion potential no
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices 11705

greater than the potential of a position

an employee currently holds or

previously held on a permanent basis in

the competitive service.

(c) A position change permitted by

reduction in force procedures.

(d) Promotion without current

competition when the employee was

appointed through competitive

procedures to a position with a

documented career ladder.

(e) A temporary promotion, or detail

to a position in a higher payband, of 180

days or less.

(f) Reclassification to include impact

of person on-the-job promotions.

(g) A promotion resulting from the

correction of an initial classification

error or the issuance of a new

classification standard.

(h) Consideration of a candidate not

given proper consideration in a

competitive promotion action.

(i) Impact of person on the job and

Factor IV process (application of the

Research Grade Evaluation Guide,

Equipment Development Grade

Evaluation Guide, Part III, or similar

guides) promotions.

Link Between Promotion and

Performance

Career ladder promotions and

promotions resulting from the addition

of duties and responsibilities are

examples of promotions that can be

made noncompetitively. Promotions can

be made noncompetitively when

contributions and achievements are

such that a higher payband is achieved

when comparing the overall position to

the Equipment Development Grade

Evaluation Guide, Part III or the

Research Grade Evaluation Guide. To be

promoted noncompetitively from one

band to the next, an employee must

meet the minimum qualifications for the

job and have a current performance

rating of B or better (see Performance

Evaluation) or equivalent under a

different performance management

system. Selection of employees through

competitive procedures will require a

current performance rating of B or

better.

B. Pay-for-Performance Management

System

Performance Evaluation

Introduction

The performance evaluation system

will link compensation to performance

through annual performance appraisals

and performance scores. The

performance evaluation system will

allow optional use of peer evaluation

and/or input from subordinates as

determined appropriate by the

Personnel Management Board. The

system will have the flexibility to be

modified, if necessary, as more

experience is gained under the project.

Performance Objectives

Performance objectives are statements

of job responsibilities based on the work

unit’s mission, goals and supplemental

benchmark position descriptions.

Employees and supervisors will jointly

develop performance objectives which

will reflect the types of duties and

responsibilities expected at the

respective pay level. In case of

disagreements, the decision of the

supervisor will prevail. Performance

objectives deal with outputs and

outcomes of a particular job. The

performance objectives, representing

joint efforts of employees and their

rating chains, should be in place within

30 days from the beginning of each

rating period.

Performance Elements

Performance elements are generic

attributes of job performance, such as

technical competence, that an employee

exhibits in performing job

responsibilities and associated

performance objectives. New

performance elements and rating forms

will be designed to implement a new

scoring and rating system. The new

performance evaluation system will be

based on critical and non-critical

performance elements defined in

Appendix C. Each performance element

is assigned a weight between a specified

range. The total weight of all elements

in a performance plan is 100 points. The

supervisor assigns each element some

portion of the 100 points in accordance

with its importance for mission

attainment. As a general rule, essentially

identical positions will have the same

critical elements and the same weight.

These weights will be developed along

with employee performance objectives.

Mid-Year Review

A mid-year review between a

supervisor and employee will be held to

determine whether objectives are being

met and whether ratings on performance

elements are above an unsatisfactory

level. Performance objectives should be

modified as necessary to reflect changes

in planning, workload, and resource

allocation. The weights assigned to

performance elements may be changed

if necessary. Additional reviews may be

held as deemed necessary by the

supervisor or requested by the

employee. The supervisor will provide

periodic feedback to the employee on

their level of performance. If the

supervisor determines that the

employee is not performing at an

acceptable level on one or more

elements, the supervisor must alert the

employee and document the problem(s).

This feedback will be provided at any

time during the rating cycle.

Performance Appraisal

A performance appraisal will be

scheduled for the final weeks of the

annual performance cycle, although an

individual performance appraisal may

be conducted at any time after the

minimum appraisal period of 120 days

is met. The performance appraisal

process brings supervisors and

employees together for formal

discussions on performance and results

in (1) written appraisals, (2)

performance ratings, (3) performance

scores, and (4) other individual

performance-related actions as

appropriate. A performance appraisal

shall consist of two meetings held

between employee and supervisor: the

performance review meeting and the

evaluation feedback meeting.

Performance Review Meeting Between

Employee and Supervisor

The review meeting is to discuss job

performance and accomplishments.

Supervisors will not assign performance

scores or performance ratings at this

meeting. The supervisor notifies the

employee of the review meeting in time

to allow the employee to prepare a list

of accomplishments. Employees will be

given an opportunity at the meeting to

give a personal performance assessment

and describe accomplishments. The

supervisor and employee will discuss

job performance and accomplishments

in relation to the performance elements,

objectives, and planned activities

established in the performance plan.

Evaluation Feedback Meeting Between

Employee and Supervisor

In this second meeting between

employee and supervisor, the supervisor

informs the employee of management’s

appraisal of the employee’s performance

on performance objectives, and the

employee’s performance score and

rating on performance elements. During

this second meeting, the supervisor and

employee will discuss and document

performance objectives for the next

rating period.

Performance Scores

The overall score is the sum of

individual performance element scores.

Employees will receive an academictype rating of A, B, C, or U depending

upon the score attained. These summary

ratings are representative of pattern E (a

4 level system) in summary level chart
11706 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices

in 5 CFR 430.208(d)(1). This rating will

become the rating of record, and only

those employees rated C or higher will

receive general increases, performance

pay increases (i.e., basic pay increases),

and/or performance bonuses. A rating of

A will be assigned for scores from 85 to

100 points, B for scores from 70 to 84,

C for scores from 50 to 69, and U for

scores from 0 to 49 or a failure to

achieve at the 50% level of any critical

element. The academic-type ratings will

be used to determine performance

payouts and to award additional RIF

retention years as follows:

Rating Compensation

RIF retention yrs.

added

A .................... 4 shares + c* 10

B .................... 2 shares + c .. 7

C .................... 1 share + c .... 3

U .................... 0 .................... 0

*c = GS General Increase (Title 5, Section

5303).

Selection of the weighted points to

assign to an employee’s performance on

performance elements is assisted by use

of benchmark performance standards

(Appendix D). These benchmark

performance standards are modified

versions of the performance standards

used by the National Institute of

Standards and Technology (NIST),

National Bureau of Standards. Each

benchmark performance standard

describes the level of performance

associated with a particular point on a

rating scale. Supervisors may add

supplemental standards to the

performance plans of the employees

they supervise to further elaborate the

benchmark performance standards.

Performance-Based Actions

AVRDEC will implement a process to

deal with poor performers. This process

may lead to involuntary separations,

with grievance or appeal rights. The

process may start at any time during the

rating period that the supervisor

identifies a deficiency(ies) causes the

level of performance to be at the U

(unsatisfactory) level based on a

composite score that is less than 50 for

all elements or a score on any critical

element of less than 50 percent.

When the employee’s performance is

determined to be unsatisfactory at the

close of the annual rating period, the

Unsatisfactory (U) rating will become

the rating of record for all matters

relating to pay or Reduction-in-Force

(RIF).

There are two processes to deal with

poor performers:

1. Change in Assignment—Because it

is recognized that employees may be

assigned to a position for which they are

not suited, an attempt will be made to

place poor performers in a position

better suited to their skills and

capabilities. The offer of change in

assignment will be contingent upon the

employee’s concurrence and will be

either within the same band or in the

next lower payband. If reassigned, the

employee will receive written

notification that they will be given a

reasonable opportunity period of no less

than 30 calendar days in length to

demonstrate performance at a level that

is at least equal to that of a summary

level C rating. The period of time

considered to be reasonable will be

determined, in part, by whether the

employee’s reassignment is to a

substantially similar or the same

position under a different supervisor, or

in a different office, or in a substantially

different position. Essential training and

mentoring will be provided as

appropriate during this opportunity

period. Failure to achieve a level of

performance that is at least equal to that

of a summary level C rating (following

the above-referenced opportunity

period) will place the employees in Step

3 of this process. There will be no

further opportunity period.

2. Performance Improvement Plan

(PIP)—If the employee does not accept

an offer of change in assignment, or if

there is no appropriate, available

position to assign an employee, the

supervisor will develop a PIP that will

be monitored for a reasonable period of

time (no less than 30 calendar days).

When an employee is placed in a PIP,

the employee will be informed in

writing, that unless their level of

performance improves to, and is

sustained at a level at least equal to that

of a summary level C rating, the

employee may be removed from the

position (change in assignment,

reduction in pay, or removal from the

Federal service).

If, during or at the conclusion of the

PIP, the employee’s level of

performance improves to a level at least

equal to that of a summary level C rating

and is again determined to deteriorate to

below level C in any area during one

year from the beginning of the PIP, the

AVRDEC may initiate action to remove

the employee from the position with no

additional opportunity to improve. An

employee whose level of performance

improves to a level at least equal to that

of a summary level C rating for one year

from the beginning of the PIP, and then

deteriorates again to below level C again

in any area, during succeeding rating

periods, will be placed in a second PIP

before initiating action to remove the

employee from the position.

If and when performance improves

during the period in which the

employee is otherwise ineligible for the

general increase, then the general

increase shall be restored. Such

restoration is not retroactive and is

separate and apart from incentive pay.

3. Removal—If the employee fails to

demonstrate a level of performance at

least equal to that of a summary level C

rating after completing either Step 1 or

Step 2, the employee will be given a

written notice of proposed removal from

the position. The notice period will be

a minimum of 30 calendar days and the

employee will have a reasonable period

of time in which to reply. The employee

will be given a written notice of

decision to include all applicable

grievance and appeal rights.

Note: Performance-based adverse actions

may be taken under 5 U.S.C., Chapter 75,

rather than Chapter 43.

A decision to remove an employee for

poor performance may be based only on

those instances of poor performance that

occurred during the opportunity period

(Step 1) or during the one-year period

ending on the date of proposed removal

(Step 2). The notice of decision will

specify the instances of poor

performance on which the action is

based and will be given to the employee

at or before the time the action will be

effective.

The AVRDEC will preserve all

relevant documentation concerning an

action taken for poor performance and

make it available to review by the

affected employee or designated

representative. At a minimum, the

record will consist of a copy of the

notice of proposed action; the

employee’s written reply, if provided, or

a summary if the employee makes an

oral reply. Additionally, the record will

contain the written notice of decision

and the reasons therefore, along with

any supporting material including

documentation regarding the

opportunity afforded the employee to

demonstrate improved performance. An

employee who sustains their

performance at a level at least equal to

a summary level C rating for one year,

will have all relevant documentation

removed from their record.

Employee Relations

Employees covered by the project will

be evaluated under a performance

evaluation system that affords grievance

or appeal rights comparable to those

provided currently.
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices 11707

Senior Executive Service and 5 U.S.C.

3104 (ST) Employees

Members of the SES will remain

under the current SES performance

appraisal system. Title 5 U.S.C. 3104

(ST) employees will be included in the

project performance evaluation system,

but will not be in the project pay-forperformance system.

Awards

The AVRDEC currently has an

extensive awards program consisting of

both internal and external awards. Onthe-spot, special act (which are both

performance related and

nonperformance related), and other

internal awards (both monetary and

nonmonetary) will continue under the

project, and may be modified or

expanded as appropriate. MACOM, DA,

and DoD awards and other honorary

noncash awards will be retained.

Teams may distribute an award pool

among themselves where appropriate.

Thus, a team leader or supervisor may

allocate a sum of money to a team for

outstanding completion of a special

task, and the team may decide the

individual distribution of the total

dollars among themselves.

The AVRDEC Executive Director will

have the authority to grant awards to

covered employees of up to $10,000 for

a special act. The scale of the award will

be determined using criteria in AR 5–17.

Members of the SES will remain

under their current awards system and

will not participate in the project

performance recognition bonus awards

program. Title 5 U.S.C. 3104 (ST)

employees will be eligible for cash

awards.

Pay Administration

Introduction

The objective is to establish a pay

system that will improve the ability of

the AVRDEC to attract and retain quality

employees. The new system will be a

pay-for-performance system and, when

implemented, will result in a

redistribution of pay resources based

upon individual performance.

Pay-for-Performance

AVRDEC will use a simplified

performance appraisal system that will

permit both the supervisor and the

employee to focus on quality of the

work. The proposed system will permit

the manager/supervisor to base

incentive pay increases entirely on

performance or value added to the goals

of the organization. This system will

allow managers to withhold pay

increases from nonperformers, thereby

giving the nonperformer the incentive to

improve performance or leave

government service. For example,

employees with ratings of U will receive

no performance pay increase, general

increase, or performance bonus. This

action may result in the employee’s pay

falling below the minimum rate of their

current payband because the minimum

rate is increased by the general increase

(5 U.S.C. 5303). Under these transitory

conditions, the employee’s payband

designator will remain the same. Since

there is no reduction in band level or

pay, there is no adverse action.

Pay for performance has two

components: performance pay increases

and/or performance bonuses. All

covered employees will be given the full

amount of locality pay adjustments

when they occur regardless of

performance. The funding for

performance pay increases and/or

performance bonuses is composed of

money previously available for withingrade increases, quality step increases,

promotions from one grade to another

where both grades are now in the same

payband, and for some performance

awards. Additionally, funds will be

obtained from performance pay

increases withheld for poor performance

(see Performance Evaluation).

Performance Pay Pool

The performance pay pool is

composed of a base pay fund and a

bonus pay fund. The payouts made to

employees from the performance pay

pool will be a mix of base pay increases

and bonus payments, subject to the

amounts available in the respective

funds. The funding for the base pay

fund is composed of money previously

available for within-grade increases,

quality step increases, and promotions

between grades that are banded under

the demonstration project. The bonus

pay fund is separately funded within

the constraints of the organization’s

overall performance award budget.

Some portion of the performance award

budget will be reserved for special ad

hoc awards—e.g., suggestion awards or

special act awards—and will not be

included as part of the performance pay

pool.

The MRDEC Management of

Operations and Business Office, in

consultation with Executive Director,

AVRDEC, and supporting personnelists,

will calculate the total performance pay

increase fund and allocate pay pools to

Major Organizational Units or teams, as

determined by the Executive Director.

Performance Pay Increases and/or

Performance Bonuses

A pay pool manager is accountable for

staying within pay pool limits. The pay

pool manager assigns performance pay

increases and/or performance bonuses

to individuals on the basis of an

academic-type rating, the value of the

performance pay pool resources

available, and the individual’s current

basic rate of pay within a given

payband. A pay pool manager may

request approval from the Personnel

Management Board (PMB) or its

designee to grant a performance pay

increase to an employee that is higher

than the compensation formula for that

employee to recognize extraordinary

achievement or to provide accelerated

compensation for local interns.

Performance payouts will be

calculated for each individual based

upon a performance pay pool value that

will be initially 3 percent (e.g., 2.0%

performance pay + 1.0% performance

bonus) of the combined basic rates of

pay of the assigned employees. This

percentage, a payout factor, will be

adjusted as necessary to compensate for

changing employee demographics

which impact the elements used in the

GS system, such as the amount of step

raises, quality step increases, and

promotions. Performance payouts will

be calculated so that a pay pool manager

will not exceed the resources that are

available in the pay pool. An

employee’s performance payout is

computed as follows:

Performance Payout Pool Value SAL N

SUM SALj Nj j to n = ( ) =

* *

* ; 1

Where: Pool Value = F * SUM (SALk);

k = 1 to n

n = Number of employees in pay pool

N = Number of shares earned by an

employee based on their

performance rating (0 to 4)

SAL = An individual’s basic rate of pay

SUM = The summation of the entities in

parenthesis over the range indicated

F = Payout Factor
11708 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices

Once the individual performance

payout amounts have been determined,

the next step is to determine what

portion of each payout will be in the

form of a base pay increase as opposed

to a bonus payment. A base pay share

factor is derived by dividing the amount

of the base pay fund by the amount of

the total performance pay pool. This

factor is multiplied by the individual

performance payout amounts to derive

each individual’s projected base pay

increase. Certain employees will not be

able to receive the projected base pay

increase due to base pay caps. Base pay

is capped when an employee reaches

the maximum rate of pay in an assigned

payband, when the mid-point principle

applies (see below), and when the 50

percent rule applies (see below).

If the organization determines it is

appropriate, it may reallocate a portion

(up to the maximum possible amount)

of the unexpended base pay funds for

capped employees to uncapped

employees. This reallocation must be

made on a proportional basis so that all

uncapped employees receive the same

percentage increase in their base pay

share (unless the reallocation

adjustment is limited by a pay cap). Any

dollar increase in an employee’s

projected base pay increase will be

offset, dollar for dollar, by an

accompanying reduction in the

employee’s projected bonus payment.

Thus, the employee’s total performance

payout is unchanged.

A midpoint principle will be used to

determine performance pay increases.

This principle requires that employees

in all paybands must receive a B rating

or higher to advance their basic rate of

pay beyond the midpoint dollar

threshold of their respective paybands.

If the performance payout formula

yields a basic pay increase for a C-rated

employee that would increase their

basic rate of pay beyond the midpoint

dollar threshold, then their basic rate of

pay will be adjusted to the midpoint

dollar threshold and the balance

converted to a performance bonus. Once

an employee has progressed beyond the

midpoint dollar threshold, future

performance pay increases will require

a B rating or greater. If an employee

attains a C rating and is beyond the

midpoint dollar threshold, incentive

pay increases will be restricted to

performance bonuses only.

Annual performance pay increases

will be limited to (1) 50 percent of the

difference between the particular

maximum band rate and the employee’s

current basic rate of pay, or (2) the

projected performance pay increase,

whichever is less, with the balance

converted to a performance bonus. This

means that employees whose pay has

reached the upper limits of a particular

payband will receive most performance

incentives as a performance bonus.

Performance bonuses will not become a

part of employee basic rate of pay.

Supervisory Pay Adjustments

Supervisory pay adjustments may be

used at the discretion of the AVRDEC

Executive Director, to compensate

employees assuming positions entailing

supervisory responsibilities.

Supervisory pay adjustments are

increases to the supervisor’s basic rate

of pay, ranging up to 10 percent of that

pay rate, subject to the constraint that

the adjustment may not cause the

employee’s basic rate of pay to exceed

the payband maximum rate. Only

employees in supervisory positions with

formal supervisory authority meeting

that required for coverage under the

OPM GS Supervisory Guide may be

considered for the supervisory pay

adjustment. Criteria to be considered in

determining the pay increase percentage

include the following organizational

and individual employee factors: (1)

Needs of the organization to attract,

retain, and motivate high quality

supervisors; (2) budgetary constraints;

(3) years of supervisory experience; (4)

amount of supervisory training received;

(5) performance appraisals and

experience as a group or team leader; (6)

their organizational level of supervision;

and (7) managerial impact on the

organization. The supervisory pay

adjustment will not apply to 5 U.S.C.

3104 (ST) positions.

Conditions, after the date of

conversion into the demonstration

project, under which the application of

a supervisory pay adjustment may be

considered are as follows:

(1) New hires into supervisory

positions will have their initial rate of

basic pay set at the supervisor’s

discretion within the pay range of the

applicable payband. This rate of pay

may include a supervisory pay

adjustment determined using the ranges

and criteria outlined above.

(2) A career employee selected for a

supervisory position that is within the

employee’s current payband may also be

considered for a supervisory pay

adjustment.

If a supervisor is already authorized a

supervisory pay adjustment and is

subsequently selected for another

supervisory position, within the same

payband, then the supervisory pay

adjustment will be redetermined.

Within the demonstration project

rating system, the performance element

‘‘Supervision/EEO’’ is identified as a

critical element. Changes in the rating

value for this element awarded to a

supervisor with a supervisory pay

adjustment may generate a review of the

adjustment and may result in an

increase or decrease to that adjustment.

Decrease to a supervisory pay

adjustment is not an adverse action if

this action results from changes in

supervisory duties or supervisory

ratings.

Supervisors, upon initial conversion

into the demonstration project into the

same, or substantially similar position,

will be converted at their existing basic

rate of pay and will not be offered a

supervisory pay adjustment.

The initial dollar amount of the

adjustment will be removed when the

employee voluntarily leaves the

supervisory position. The cancellation

of the adjustment under these

circumstances is not an adverse action

and is not appealable. If an employee is

removed from a supervisory position for

personal cause (performance or

conduct), the adjustment will be

removed under adverse action

procedures. However, if an employee is

removed from a non-probationary

supervisory position for conditions

other than voluntary or for personal

cause, then the grade and pay retention

provisions of 5 CFR part 536 will

prevail where ‘‘payband level’’ is

substituted for ‘‘grade.’’

Supervisory Pay Differentials

Supervisory differentials may be used,

at the discretion of the AVRDEC

Executive Director, to incentivize and

reward supervisors who are in paybands

III and IV of the E&S occupational

family in supervisory positions with

formal supervisory authority meeting

that required for coverage under the

OPM GS Supervisory Guide. A

supervisory pay differential is a cash

incentive that may range up to 10

percent of the supervisor’s basic rate of

pay. It is paid on a pay period basis and

is not included as part of the

supervisor’s basic rate of pay. Criteria to

be considered in determining the

amount of this supervisory pay

differential includes those identified for

Supervisory Pay Adjustments.

The supervisory pay differential may

be considered, either during conversion

into or after initiation of the

demonstration project, if the supervisor

has subordinate employees in the same

payband. The differential must be

terminated if the employee is removed

from a supervisory position, regardless

of cause.

As specified in Supervisory Pay

Adjustments, after initiation of the

demonstration project, all personnel

actions involving a supervisory
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices 11709

differential will require a statement

signed by the employee acknowledging

that the differential may be terminated

or reduced at the AVRDEC Executive

Director’s discretion. The termination or

reduction of the differential is not an

adverse action and is not subject to

appeal.

Pay and Compensation Ceilings

An employee’s total monetary

compensation paid in a calendar year

may not exceed the basic rate of pay for

level I of the Executive Schedule

consistent with 5 U.S.C. 5307 and 5 CFR

part 530, subpart B.

In addition, each payband will have

its own pay ceiling, just as grades do in

the current system. Pay rates for the

various paybands will be directly keyed

to the GS rates. Except for retained rates,

basic pay will be limited to the

maximum rates payable for each

payband.

Pay Setting for Promotion

Upon promotion to a higher payband,

an employee will be entitled to a 6%

pay increase or the lowest level in the

payband to which promoted, whichever

is greater. Highest previous rate also

may be considered in setting pay upon

promotion, under rules similar to the

highest previous rate rules in 5 CFR

531.203 (c) and (d).

C. Classification

Introduction

The objectives of the new

classification system are to simplify the

classification process, make the process

more serviceable and understandable,

and place more decision-making

authority and accountability with line

managers. All positions listed in

Appendix A will be in the classification

structure. Provisions will be made for

including other occupations as

employment requirements change in

response to changing technical

programs.

Occupational Series

The present GS classification system

has over 400 occupations (also called

series), which are divided into 22

groups. The occupational series will be

maintained. New series, established by

OPM, may be added as needed to reflect

new occupations in the work force.

Appendix A lists the occupational series

currently represented at the AVRDEC by

occupational family.

Classification Standards

AVRDEC will use a classification

system that is a modification of the

system now in use at the U.S. Navy,

Naval Command, Control and Ocean

Surveillance Center, San Diego,

California. The present classification

standards will be used to create local

benchmark position descriptions for

each payband, reflecting duties and

responsibilities comparable to those

described in present classification

standards for the span of grades

represented by each payband. There

will be at least one benchmark position

description for each payband. A

supervisory benchmark position

description will be added to those

paybands that include supervisory

employees. Present titles and series will

continue to be used in order to

recognize the types of work being

performed and educational backgrounds

and requirements of incumbents.

Locally developed specialty codes and

OPM functional codes will be used to

facilitate titling, making qualification

determinations, and assigning

competitive levels to determine

retention status.

Position Descriptions and Classification

Process

The AVRDEC Executive Director will

have delegated classification authority

and may redelegate this authority to

subordinate managers. New benchmark

position descriptions will be developed

to assist managers in exercising

delegated position classification

authority. Managers will identify the

occupational family, job series, the

functional code, the specialty code,

payband level, and the appropriate

acquisition codes. The manager will

document these decisions on a cover

sheet similar to the present DA Form

374.

Specialty codes will be developed by

Subject Matter Experts (SMEs) to

identify the special nature of work

performed. Functional codes are those

currently found in the OPM

Introduction to the Classification

Standards which define certain kinds of

activities, e.g., Research, Development,

Test and Evaluation, etc., and covers

Engineers & Scientists.

Classification Appeals

An employee may appeal the

occupational family, occupational

series, or payband of his or her position

at any time. The employee may

accomplish this by exercising any of the

following options: (a) The employee

must formally raise the areas of concern

to supervisors in the immediate chain of

command, either verbally or in writing;

(b) If the employee is not satisfied with

the supervisory response, the employee

may appeal to the appellate level within

DoD or may appeal directly to Office of

Personnel Management (OPM); (c) If the

employee elects to first appeal to DoD,

but is not satisfied with the response,

he/she may appeal to the OPM.

Appellate decisions from OPM are final.

The evaluation of a classification

appeal is based on the AVRDEC

Personnel Demonstration Project

Classification Standards.

D. Hiring and Appointment Authorities

1. Hiring Authority

A candidate’s basic eligibility will be

determined using Office of Personnel

Management’s (OPM) Qualification

Standards Handbook for General

Schedule Positions. Candidates must

meet the minimum standards for entry

into the payband. For example if the

payband includes positions in grades

GS–5 and GS–7, the candidate must

meet the qualifications for positions at

GS–5 level. Specific experience/

education required will be determined

based on whether a position to be filled

is at the lower or higher end of the band.

Selective placement factors can be

established in accordance with the OPM

Qualification Handbook when judged to

be critical to successful job

performance. These factors will be

communicated to all candidates for

particular position vacancies and must

be met for basic eligibility. Under the

demonstration authority, the AVRDEC

will modify qualification standards only

as authorized in the General Policies

and instructions (paragraph 8) of the

Qualification Standard Handbook.

2. Appointment Authority

Under the demonstration project,

there will continue to be career and

career conditional appointments and

temporary appointments not to exceed

one year. These appointments will use

existing authorities and entitlements.

Non-permanent positions (exceeding

one year) needed to meet fluctuating or

uncertain workload requirements will

be filled using a Contingent Employee

appointment authority.

Employees hired for more than one

year, under the contingent employee

appointment authority, are given term

appointments in the competitive service

for no longer than five years. The

AVRDEC Executive Director is

authorized to extend a contingent

appointment one additional year. These

employees are entitled to the same

rights and benefits as term employees

and will serve a one year trial period.

The Pay-for-Performance Management

System described in III.B applies to

contingent employees.

Appointments will be made under the

same appointment authorities and

processes as regular term appointments,
11710 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices

but recruitment bulletins must indicate

that there is a potential for conversion

to permanent employment.

Employees hired under the contingent

employee authority may be eligible for

conversion to career-conditional

appointments. To be converted, the

employee must (1) have been selected

for the term position under competitive

procedures, with the announcement

specifically stating that the individual(s)

selected for the term position(s) may be

eligible for conversion to careerconditional appointment at a later date;

(2) served two years of continuous

service in the term position; (3) be

selected under merit promotion

procedures for the permanent position ;

and (4) have a current rating of B or

better.

Employees serving under regular term

appointments at the time of conversion

to the Demonstration Project will be

converted to the new contingent

employee appointments provided they

were hired for their current positions

under competitive procedures. These

employees will be eligible for

conversion to career-conditional

appointment if they have a current

rating of B or better (or one of the top

two ratings on the current evaluation

system), and are selected under merit

promotion procedures for their

permanent position after having

completed two years of continuous

service. Time served in temporary or

term positions prior to conversion to the

contingent employee appointment is

creditable, provided the service was

continuous.

3. Extended Probationary Period

The current one year probationary

period will be extended to two years for

all newly hired employees in the

Engineers and Scientists, E&S Support,

and Business Management occupational

families. The purpose of extending the

probationary period is to allow

supervisors an adequate period of time

to fully evaluate an employee’s ability to

complete a cycle of work (such as

research, program development and

execution, and technology transfer) and

to fully evaluate an employee’s

contribution and conduct. Employees in

the General Support occupational

family will serve a one year

probationary period.

Aside from extending the time period,

all other features of the current

probationary period are retained

including the potential to remove an

employee without providing the full

substantive and procedural rights

afforded a non-probationary employee.

Any employee appointed prior to the

implementation date will not be

affected. The two year probation will

apply to new hires or those who do not

have reemployment rights or

reinstatement privileges.

Probationary employees will be

terminated when the employee fails to

demonstrate proper conduct, technical

competency, and/or adequate

contribution for continued employment.

When the AVRDEC decides to terminate

an employee serving a probationary

period because his/her work

performance or conduct during this

period fails to demonstrate their fitness

or qualifications for continued

employment, it shall terminate his/her

services by written notification of the

reasons for separation and the effective

date of the action. The information in

the notice as to why the employee is

being terminated shall, as a minimum

consists of the manager’s conclusions as

to the inadequacies of their performance

or conduct.

4. Supervisory Probationary Periods

Supervisory probationary periods will

be made consistent with 5 CFR part 315,

Subchapter 315.901. Employees that

have successfully completed the initial

probationary period will be required to

complete an additional one year

probationary period for the initial

appointment to a supervisory position.

If, during the probationary period, the

decision is made to return the employee

to a nonsupervisory position for reasons

solely related to supervisory

performance, the employee will be

returned to a comparable position of no

lower payband and pay than the

position from which they were

promoted.

5. Voluntary Emeritus Program

Under the demonstration project, the

AVRDEC Executive Director will have

the authority to offer retired or

separated individuals (engineers and

scientists) voluntary assignments in the

Center. This authority will include

individuals who have retired or

separated from Federal service.

Voluntary Emeritus Program

assignments are not considered

‘‘employment’’ by the Federal

government (except for purposes of

injury compensation). Thus, such

assignments do not affect an employee’s

entitlement to buyouts or severance

payments based on an earlier separation

from Federal service. The Voluntary

Emeritus Program will ensure continued

quality research while reducing the

overall salary line by allowing higher

paid individuals to accept retirement

incentives with the opportunity to

retain a presence in the scientific

community. The program will be of

most benefit during manpower

reductions as senior S&Es could accept

retirement and return to provide

valuable on-the-job training or

mentoring to less experienced

employees. Voluntary service will not

be used to replace any employee.

To be accepted into the emeritus

program, a volunteer must be

recommended by Center managers to

the AVRDEC Executive Director.

Everyone who applies is not entitled to

a voluntary assignment. The AVRDEC

Executive Director must clearly

document the decision process for each

applicant (whether accepted or rejected)

and retain the documentation

throughout the assignment.

Documentation of rejections will be

maintained for two years.

To ensure success and encourage

participation, the volunteer’s federal

retirement pay (whether military or

civilian) will not be affected while

serving in a voluntary capacity. Retired

or separated federal employees may

accept an emeritus position without a

break or mandatory waiting period.

Volunteers will not be permitted to

monitor contracts on behalf of the

government or to participate on any

contracts or solicitations where a

conflict of interest exists. The same

rules that currently apply to source

selection members will apply to

volunteers.

An agreement will be established

between the volunteer, the AVRDEC

Executive Director and the CPAC/CPOC

Director. The agreement will be

reviewed by the local Legal Office for

ethics determinations under the Joint

Ethics Regulation. The agreement must

be finalized before the assumption of

duties and shall include:

(a) A statement that the voluntary

assignment does not constitute an

appointment in the civil service and is

without compensation, and any and all

claims against the Government (because

of the voluntary assignment) are waived

by the volunteer,

(b) A statement that the volunteer will

be considered a federal employee for the

purpose of injury compensation,

(c) Volunteer’s work schedule,

(d) Length of agreement (defined by

length of project or time defined by

weeks, months, or years),

(e) Support provided by the AVRDEC

(travel, administrative, office space,

supplies),

(f) A one page Statement of Duties and

Experience,

(g) A provision that states no

additional time will be added to a

volunteer’s service credit for such

purposes as retirement, severance pay,
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices 11711

and leave as a result of being a member

of the Voluntary Emeritus Program,

(h) A provision allowing either party

to void the agreement with 10 working

days written notice, and

(i) The level of security access

required (any security clearance

required by the assignment will be

managed by the AVRDEC while the

volunteer is a member of the Voluntary

Emeritus Program).

E. Employee Development

1. Expanded Developmental

Opportunity Program

The AVRDEC Expanded

Developmental Opportunity Program

will be funded by the AVRDEC, and it

will cover all demonstration project

employees in the Engineers and

Scientists and the E&S Support

occupational families. An expanded

developmental opportunity

complements existing developmental

opportunities such as (1) long term

training, (2) one year work experiences

in an industrial setting via the Relations

With Industry Program, (3) one year

work experiences in laboratories of

allied nations via the Science and

Engineer Exchange Program, (4)

rotational job assignments within the

AVRDEC, (5) up to one year

developmental assignments in higher

headquarters within the Army and

Department of Defense, and (6) self

directed study via correspondence

courses and local colleges and

universities.

Each developmental opportunity

period should benefit the AVRDEC, as

well as increase the employee’s

individual effectiveness. Various

learning or developmental experiences

may be considered, such as advanced

academic teaching or research, or onthe-job work experience with public or

non-profit organizations. Employees

will be eligible after completion of

seven years of Federal service. Final

approval authority will rest with the

AVRDEC Executive Director, and

selection of an employee to be granted

an expanded developmental

opportunity will be on a competitive

basis. An expanded developmental

opportunity period will not result in

loss of (or reduction in) pay, leave to

which the employee is otherwise

entitled, or credit for time or service.

Employees accepting an expanded

development opportunity do not have to

sign a continued service agreement cited

in 5 U.S.C. 4108(a)(1) (Supplement

1995).

The opportunity to participate in the

Expanded Developmental Opportunity

Program will be announced annually.

Instructions for application and the

selection criteria will be included in the

announcement. Final selection for

participation in the program will be

made by the Personnel Management

Board. The position of employees on an

expanded developmental opportunity

may be backfilled with employees

temporarily promoted, contingent

employees, or employees assigned via

the simplified assignment process in

III.A. However, that position or its

equivalent must be made available to

the employee returning from the

expanded developmental opportunity.

2. Training for Degrees

Degree training is an essential

component of an organization that

requires continuous acquisition of

advanced and specialized knowledge.

Degree training in the academic

environment of laboratories is also a

critical tool for recruiting and retaining

employees with or requiring critical

skills. Constraints under current law

and regulation limit degree payment to

shortage occupations. In addition,

current government wide regulations

authorize payment for degrees based

only on recruitment or retention needs.

Degree payment is not permitted for

non-shortage occupations involving

critical skills.

The AVRDEC proposes to expand the

authority to provide degree payment for

purposes of meeting critical skill

requirements, to ensure continuous

acquisition of advanced and specialized

knowledge essential to the organization,

and to recruit and retain personnel

critical to the present and future

requirements of the organization. Degree

payment may not be authorized where

it would result in a tax liability for the

employee without the employee’s

express and written consent. It is

expected that the degree payment

authority will be used primarily and

largely for advanced degrees, except

where an undergraduate program is

necessary to the attainment of an

advanced degree or credits. Any

variance from this policy must be

rigorously determined and documented.

The AVRDEC will develop guidelines

to ensure competitive approval of

degree payment and that such decisions

are fully documented. In addition, this

proposal shall be implemented

consistent with 5 U.S.C. 4107(b)(2).

F. Revised Reduction-in-Force (RIF)

Procedures

Introduction

Modifications include limiting

competitive area to occupational

families and increasing the emphasis on

performance in the RIF Process.

Retention criteria are in the following

order; tenure, veterans’ preference,

service credit adjusted by a sum of the

last three performance ratings. Current

reduction in force regulations/

procedures have been adjusted in the

context of the occupational family and

the payband classification system. Also

regulations are being modified by

substituting ‘‘same payband’’ for ‘‘same

grade’’ and ‘‘one payband lower’’ for

‘‘three grades lower’.

Competitive Areas

The AVRDEC employees located at Ft.

Eustis (to include Hampton, VA),

Moffett Field, CA, and Redstone

Arsenal, AL (to include individuals

duty-stationed at Washington, DC and

St. Paul, MN), will each be in separate

competitive areas. Within each

geographic competitive area, each of the

four occupational families will be a

separate competitive area. Bumps and

retreats will occur only within the

competitive area and only to positions

for which the employee is qualified in

the same or next lower payband.

Competitive levels will be established

based on the payband, classification

series, and where responsibilities are

similar enough in duties, qualification

requirements, pay schedules, and

working conditions so that an employee

may be reassigned to any of the other

positions within the level without

requiring significant training or causing

undue interruption. Separate

competitive levels will be established

for positions in the competitive and

excepted service; for positions filled on

a full-time, part-time, intermittent,

seasonal, or on-call basis; and separate

levels will be established for positions

filled as a trainee or developmental.

Retention

Competing employees are listed on a

retention register in the order shown

below. Each tenure group has three

subgroups (30% or higher compensable

veterans, other veterans, and nonveterans) and employees appear on the

retention register in that order. Within

each subgroup, employees are in order

of years of service adjusted to include

performance credit.

Tenure I—(Career employees)

Tenure II—(Career-Conditional

employees)

Tenure III—(Contingent employees)

In the Demonstration Project an

employee can bump into a position, in

the same occupational family in the

same payband or one below, that is

currently held by another employee in

a lower retention subgroup. An
11712 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices

employee may retreat within the same

occupational family in the same band or

one payband below the one that is

currently held by another employee in

the same subgroup who has lower

adjusted RIF service computation date.

A preference eligible with a

compensable service-connected

disability of 30 percent or more may

displace employees in positions

equivalent to five GS grades below the

minimum grade level of his/her current

band.

An employee with a current annual

performance rating of U has assignment

rights only to a position held by another

employee who has a U rating. An

employee who has been given a written

decision of removal because of

unacceptable performance will be

placed at the bottom of the retention

register for his/her competitive level.

Link Between Performance and

Retention

An employee will have additional

years of service added to the service

computation date for retention

purposes. The credit is applied for each

of the last three annual performance

ratings of record, received over the last

four years, for a potential credit of 30

years. If an employee has less than three

annual performance ratings of record,

then for each missing rating, a rating of

C will be assumed. Ratings given under

nonDemo systems will be converted to

the demo rating scheme and provided

the equivalent rating credit.

Rating A adds 10 years

Rating B adds 7 years

Rating C adds 3 years

Rating U adds no credit for retention

Grade and Pay Retention

Except where waived or modified in

the waivers section of this plan, grade

and pay retention will follow current

law and regulations.

IV. Training

Introduction

The key to the success or failure of the

proposed demonstration project will be

the training provided for all involved.

This training will not only provide the

necessary knowledge and skills to carry

out the proposed changes, but will also

lead to program commitment on the part

of participants.

Training at the beginning of

implementation and throughout the

demonstration will be provided to

supervisors, employees, and the

administrative staff responsible for

assisting managers in effecting the

changeover and operation of the new

system.

The elements to be covered in the

orientation portion of this training will

include: (1) a description of the

personnel system, (2) how employees

are converted into and out of the

system, (3) the pay adjustment and/or

bonus process, (4) familiarization with

the new position descriptions and

performance objectives, (5) the

performance evaluation management

system, (6) the reconsideration process,

and (7) the demonstration project

administrative and formal evaluation

process.

Supervisors

The focus of this project on

management-centered personnel

administration, with increased

supervisory and managerial personnel

management authority and

accountability, demands thorough

training of supervisors and managers in

the knowledge and skills that will

prepare them for their new

responsibilities. Training will include

detailed information on the policies and

procedures of the demonstration project,

skills training in using the classification

system, position description

preparation, and performance

evaluation. Additional training may

focus on nonproject procedural

techniques such as interpersonal and

communication skills.

Administrative Staff

The administrative staff, generally

personnel specialists, technicians, and

administrative officers, will play a key

role in advising, training, and coaching

supervisors and employees in

implementing the demonstration

project. This staff will need training in

the procedural and technical aspects of

the project.

Employees

The AVRDEC, in conjunction with the

education and development assets of the

CPAC/CPOC, will train employees

covered under the demonstration

project. In the months leading up to the

implementation date, meetings will be

held for employees to fully inform them

of all project decisions, procedures, and

processes.

V. Conversion

Conversion to the Demonstration Project

a. Initial entry into the demonstration

project will be accomplished through a

full employee protection approach that

ensures each employee an initial place

in the appropriate payband without loss

of pay. Employees serving under regular

term appointments at the time of the

implementation of the demonstration

project will be converted to the

contingent employee appointment.

Position announcement, etc. will not be

required for these contingent employee

appointments. An automatic conversion

from current GS/GM grade and pay into

the new broadband system will be

accomplished. Each employee’s initial

total salary under the demonstration

project will equal the total salary

received immediately before conversion.

Employees who enter the demonstration

project later by lateral reassignment or

transfer will be subject to parallel pay

conversion rules. If conversion into the

demonstration project is accompanied

by a geographic move, the employee’s

GS pay entitlements in the new

geographic area must be determined

before performing the pay conversion.

b. Employees who are on temporary

promotions at the time of conversion

will be converted to a payband

commensurate with the grade of the

position to which promoted. At the

conclusion of the temporary promotion,

the employee will revert to the payband

which corresponds to the grade of

record. When a temporary promotion is

terminated, the employee’s pay

entitlements will be determined based

on the employee’s position of record,

with appropriate adjustments to reflect

pay events during the temporary

promotion, subject to the specific

policies and rules established by the

AVRDEC. In no case may those

adjustments increase the pay for the

position or record beyond the applicable

pay range maximum rate. The only

exception will be if the original

competitive promotion announcement

stipulated that the promotion could be

made permanent; in these cases actions

to make the temporary promotion

permanent will be considered, and if

implemented, will be subject to all

existing priority placement programs.

c. Employees who are covered by

special salary rates, prior to the

demonstration project, will no longer be

considered a special rate employee

under the Demonstration Project. These

employees will, therefore, be eligible for

full locality pay. The adjusted salaries of

these employees will not change.

Rather, the employees will receive a

new basic pay rate computed by

dividing their adjusted basic pay (higher

of special rate or locality rate) by the

locality pay factor for their area. A full

locality adjustment will then be added

to the new basic pay rate. Adverse

action and pay retention provisions will

not apply to the conversion process as

there will be no change in total salary.

d. During the first 12 months

following conversion, employees will

receive pay increases for noncompetitive promotion equivalents
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices 11713

when the grade level of the promotion

is encompassed within the same

broadband, the employee’s performance

warrants the promotion and promotions

that would have otherwise occurred

during that period. Employees who

receive an in-level promotion at the

time of conversion will not receive a

prorated step increase equivalent as

defined below.

e. At the time of conversion, each

employee’s salary will include a prorated increase for the time credited to

the employee toward what would have

been the employee’s next within-grade

increase. This adjustment to an

employee’s base pay will be computed

by: calculating the ratio of the number

of weeks the employee will have spent

in the current step through the week

prior to the day of conversion, to the

total number of weeks in the employee’s

current waiting period for a regular

within-grade increase; and multiplying

that ratio by the dollar value of the

employee’s next within-grade increase

at the time of conversion.

Conversion or Movement from a Project

Position to a General Schedule Position

If a demonstration project employee is

moving to a General Schedule (GS)

position not under the demonstration

project, or if the project ends and each

project employee must be converted

back to the GS system, the following

procedures will be used to convert the

employee’s project payband to a GSequivalent grade and the employee’s

project rate of pay to GS equivalent rate

of pay. The converted GS grade and GS

rate of pay must be determined before

movement or conversion out of the

demonstration project and any

accompanying geographic movement,

promotion, or other simultaneous

action. For conversions upon

termination of the project and for lateral

reassignments, the converted GS grade

and rate will become the employee’s

actual GS grade and rate after leaving

the demonstration project (before any

other action). For transfers, promotions,

and other actions, the converted GS

grade and rate will be used in applying

any GS pay administration rules

applicable in connection with the

employee’s movement out of the project

(e.g., promotion rules, highest previous

rate rules, pay retention rules), as if the

GS converted grade and rate were

actually in effect immediately before the

employee left the demonstration project.

a. Grade-Setting Provisions: An

employee in a payband corresponding

to a single GS grade is converted to that

grade. An employee in a payband

corresponding to two or more grades is

converted to one of those grades

according to the following rules:

(1) The employee’s adjusted rate of

basic pay under the demonstration

project (including any locality payment)

is compared with step 4 rates in the

highest applicable GS rate range. (For

this purpose, a ‘‘GS rate range’’ includes

a rate in (1) the GS base schedule, (2)

the locality rate schedule for the locality

pay area in which the position is

located, or (3) the appropriate special

rate schedule for the employee’s

occupational series, as applicable.) If the

series is a two-grade interval series, only

odd-numbered grades are considered

below GS–11.

(2) If the employee’s adjusted project

rate equals or exceeds the applicable

step 4 rate of the highest GS grade in the

band, the employee is converted to that

grade.

(3) If the employee’s adjusted project

rate is lower than the applicable step 4

rate of the highest grade, the adjusted

rate is compared with the step 4 rate of

the second highest grade in the

employee’s payband. If the employee’s

adjusted rate equals or exceeds step 4

rate of the second highest grade, the

employee is converted to that grade.

(4) This process is repeated for each

successively lower grade in the band

until a grade is found in which the

employee’s adjusted project rate equals

or exceeds the applicable step 4 rate of

the grade. The employee is then

converted at that grade. If the

employee’s adjusted rate is below the

step 4 rate of the lowest grade in the

band, the employee is converted to the

lowest grade.

(5) Exception: If the employee’s

adjusted project rate exceeds the

maximum rate of the grade assigned

under the above-described ‘‘step 4’’ rule

but fits in the rate range for the next

higher applicable grade (i.e., between

step 1 and step 4), then the employee

shall be converted to that next higher

applicable grade.

(6) Exception: An employee will not

be converted to a lower grade than the

grade held by the employee

immediately preceding a conversion,

lateral reassignment, or lateral transfer

into the project, unless since that time

the employee has undergone a reduction

in band.

b. Pay-Setting Provisions: An

employee’s pay within the converted GS

grade is set by converting the

employee’s demonstration project rate

of pay to GS rate of pay in accordance

with the following rules:

(1) The pay conversion is done before

any geographic movement or other payrelated action that coincides with the

employee’s movement or conversion out

of the demonstration project.

(2) An employee’s adjusted rate of

basic pay under the project (including

any locality payment) is converted to a

GS adjusted rate on the highest

applicable rate range for the converted

GS grade. (For this purpose, a ‘‘GS rate

range’’ includes a rate range in (1) the

GS base schedule, (2) an applicable

locality rate schedule, or (3) an

applicable special rate schedule.)

(3) If the highest applicable GS rate

range is a locality pay rate range, the

employee’s adjusted project rate is

converted to a GS locality rate of pay.

If this rate falls between two steps in the

locality-adjusted schedule, the rate must

be set at the higher step. The converted

GS unadjusted rate of basic pay would

be the GS base rate corresponding to the

converted GS locality rate (i.e., same

step position). (If this employee is also

covered by a special rate schedule as a

GS employee, the converted special rate

will be determined based on the GS step

position. This underlying special rate

will be basic pay for certain purposes

for which the employee’s higher locality

rate is not basic pay.)

(4) If the highest applicable GS rate

range is a special rate range, the

employee’s adjusted project rate is

converted to a special rate. If this rate

falls between two steps in the special

rate schedule, the rate must be set at the

higher step. The converted GS

unadjusted rate of basic pay will be the

GS rate corresponding to the converted

special rate (i.e., same step position).

c. Within-Grade Increase—Equivalent

Increase Determinations: Service under

the demonstration project is creditable

for within-grade increase purposes upon

conversion back to the GS pay system.

Performance pay increases (including a

zero increase) under the demonstration

project are equivalent increases for the

purpose of determining the

commencement of a within-grade

increase waiting period under 5 CFR

531.405(b).

Personnel Administration

All personnel laws, regulations, and

guidelines not waived by this plan will

remain in effect. Basic employee rights

will be safeguarded and merit principles

will be maintained. Supporting

personnel specialists will continue to

process personnel-related actions and

provide consultative and other

appropriate services.

Automation

The AVRDEC will continue to use the

Defense Civilian Personnel Data System

(DCPDS) for the processing of

personnel-related data. Payroll servicing
11714 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices

will continue from the respective

payroll offices.

Local automated systems will be

developed to support computation of

performance related pay increases and

awards and other personnel processes

and systems associated with this

project.

Experimentation and Revision

Many aspects of a demonstration

project are experimental. Modifications

may be made from time to time as

experience is gained, results are

analyzed, and conclusions are reached

on how the system is working. The

AVRDEC will make minor

modifications, such as changes in the

occupational series in a occupational

family without further notice. Major

changes, such as a change in the number

of occupational families, will be

published in the Federal Register.

VI. Project Duration

Public Law 103–337 removed any

mandatory expiration date for this

demonstration. The project evaluation

plan adequately addresses how each

intervention will be comprehensively

evaluated for at least the first 5 years of

the demonstration. Major changes and

modifications to the interventions can

be made through announcement in the

Federal Register and would be made if

formative evaluation data warranted. At

the 5 year point, the entire

demonstration will be reexamined for

either: (a) permanent implementation,

(b) change and another 3–5 year test

period, or (c) expiration.

VII. Evaluation Plan

Chapter 47 (Title 5 U.S.C.) requires

that an evaluation system be

implemented to measure the

effectiveness of the proposed personnel

management interventions. An

evaluation plan for the entire laboratory

demonstration program covering 24 DoD

labs was developed by a joint OPM/

DOD Evaluation Committee. A

Comprehensive evaluation plan was

submitted to the Office of Defense

Research & Engineering in 1995 and

subsequently approved (Proposed Plan

for Evaluation of the Department of

Defense S&T Laboratory Demonstration

Program, Office of Merit Systems

Oversight & Effectiveness, June 1995).

The overall evaluation effort will be

coordinated and conducted by OPM’s

Personnel Resources and Development

Center (PRDC). The primary focus of the

evaluation is to determine whether the

waivers granted result in a more

effective personnel system than the

current as well as an assessment of the

costs associated with the new system.

The present personnel system with its

many rigid rules and regulations is

generally perceived as an impediment to

mission accomplishment. The

Demonstration Project is intended to

remove some of those barriers and

therefore, is expected to contribute to

improved organizational performance.

While it is not possible to prove a direct

causal link between intermediate and

ultimate outcomes (improved personnel

system performance and improved

organizational effectiveness), such a

linkage is hypothesized and data will be

collected and tracked for both types of

outcome variables.

An intervention impact model

(Appendix B) will be used to measure

the effectiveness of the various

personnel system changes or

interventions. Additional measures will

be developed as new interventions are

introduced or existing interventions

modified consistent with expected

effects. Measures may also be deleted

when appropriate. Activity-specific

measures may also be developed to

accommodate specific needs or interests

which are locally unique.

The evaluation model for the

Demonstration Project identifies

elements critical to an evaluation of the

effectiveness of the interventions. The

overall evaluation approach will also

include consideration of context

variables that are likely to have an

impact on project outcomes: e.g., HRM

regionalization, downsizing, crossservice integration, and the general state

of the economy. However, the main

focus of the evaluation will be on

intermediate outcomes, i.e., the results

of specific personnel system changes

which are expected to improve human

resources management. The ultimate

outcomes are defined as improved

organizational effectiveness, mission

accomplishment, and customer

satisfaction.

Data from a variety of different

sources will be used in the evaluation.

Information from existing management

information systems supplemented with

perceptual data will be used to assess

variables related to effectiveness.

Multiple methods provide more than

one perspective on how the

demonstration project is working.

Information gathered through one

method will be used to validate

information gathered through another.

Confidence in the findings will increase

as they are substantiated by the different

collection methods. The following types

of data will be collected as part of the

evaluation: (1) Workforce data; (2)

personnel office data; (3) employee

attitudes and feedback using surveys,

structured interviews, and focus groups;

(4) local activity histories; and, (5) core

measures of laboratory effectiveness.

VIII. Demonstration Project Costs

Costs associated with the

development of the personnel

demonstration system include software

automation, training, and project

evaluation. All funding will be provided

through the ATCOM/AVRDEC (prior to

BRAC implementation) and the U.S.

Army Aviation and Missile Command

and AVRDEC budgets (after BRAC

implementation). The projected annual

expenses for each area is summarized in

Table 1.

TABLE 1—PROJECTED DEVELOPMENTAL COSTS

[Then-year dollars in thousands]

FY 96 FY 97 FY 98 FY 99 FY 00 FY 01

Training ............................................................................................................................. ............ $33 $16K ............ ............ ............

Project Evaluation ............................................................................................................. $13 25 25 $25 $25 $25

Automation ........................................................................................................................ ............ 6 1 ............ ............ ............

Totals ......................................................................................................................... 13 64 42 25 25 25

IX. Required Waivers to Law and

Regulation

Public Law 103–337 gave the DoD the

authority to experiment with several

personnel management innovations. In

addition to the authorities granted by

the law, the following are the waivers of

law and regulation that will be

necessary for implementation of the

Demonstration Project. In due course,

additional laws and regulations may be

identified for waiver request.
Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices 11715

1. Title 5, U.S. Code

Chapter 31, Section 3111: Acceptance

of Volunteer Service—the extent that

the acceptance of retired or separated

engineers and scientists are not

included as volunteers under current

statute.

Chapter 33, Section 3324:

Appointment to positions classified

above GS–15.

Chapter 41, Section 4107: Pay for

Degrees.

Chapter 41, Section 4108: Employee

Agreements; Service after Training—To

the extent that employees who accept an

expanded developmental opportunity

(sabbatical) do not have to sign a

continued service agreement.

Chapter 43, Sections 4301(3):

Definitions.

Chapter 43, Section 4302:

Establishment of Performance Appraisal

Systems.

Chapter 43, Section 4303(a), (b), and

(c): Actions based on Unacceptable

Performance.

Chapter 51, Sections 5101–5111:

Related to classification standards and

grading; to the extent that white collar

employees will be covered by

broadbanding. Pay category

determination criteria for federal wage

system positions remain unchanged.

Chapter 53, Sections 5301, 5302 (8)

and (9), 5303, and 5304: sections 5301,

5302, and 5304 are waived only to the

extent necessary to allow demonstration

project employees to be treated as

General Schedule employees and to

allow basic rates of pay under the

demonstration project to be treated as

scheduled rates of pay. This waiver does

not apply to ST employees who

continue to be covered by these

provisions, as appropriate.

Chapter 53, Section 5305: Special

Rates.

Chapter 53, Sections 5331–5336:

General Schedule pay rates.

Chapter 53, Sections 5361–5366:

Grade and pay retention—This waiver

applies only to the extent necessary to

(1) replace ‘‘grade’’ with ‘‘pay band’’; (2)

allow demonstration project employees

to be treated as General Schedule

employees; (3) provide that pay

retention provisions do not apply to

conversions from General Schedule

special rates to demonstration project

pay, as long as total pay is not reduced,

and to reductions in pay due solely to

the removal of a supervisory pay

adjustment upon voluntarily leaving a

supervisory position; and (4) provide

that an employee on pay retention

whose performance rating is ‘‘U’’ is not

entitled to 50 percent of the amount of

the increase in the maximum rate of

basic pay payable for the pay band of

the employee’s position. This waiver

does not apply to ST employees unless

they move to a GS-equivalent position

under the demonstration project under

conditions that trigger entitlement to

pay retention.

Chapter 55, Section 5545: Hazardous

duty differential—This waiver applies

only to the extent necessary to allow

demonstration project employees to be

treated as General Schedule employees.

This waiver does not apply to ST

employees.

Chapter 57, Section 5753, 5454, and

5755: Recruitment and Relocation

Bonuses, Retention Allowances and

Supervisory Differentials—This waiver

applies only to the extent necessary to

allow employees and positions under

the demonstration project to be treated

as employees and positions under the

General Schedule. This waiver does not

apply to ST employees who continue to

be covered by these provisions, as

appropriate.

Chapter 75, Section 7512(3): Adverse

actions—This waiver applies only to the

extent necessary to replace ‘‘grade’’ with

‘‘pay band’.

Chapter 75, Section 7512(4): Adverse

actions—This waiver applies only to the

extent necessary to provide that adverse

action provisions do not apply to (1)

conversions from General Schedule

special rates to demonstration project

pay, as long as total pay is not reduced

and (2) reductions in pay due to the

removal of a supervisory pay adjustment

upon voluntary movement to

nonsupervisory positions.

2. Title 5, Code of Federal

Regulations.

Part 300.601–605, Time-in-Grade

requirements (Restrictions eliminated

under the demonstration).

Part 308.101 through 308.103

Volunteer Service (to the extent that

retired engineers/scientists can perform

voluntary services).

Part 315.801 and 315.802,

Probationary Period (Demonstration

project employees in some occupational

families will have extended

probationary period).

Part 316.301, Term Appointments

(adding years to exceed 4).

Part 316.303, Tenure of Term

Employees (Demonstration allows for

conversion).

Part 316.305, Eligibility for WithinGrade Increases.

Part 351.402(b) Competitive Areas

(Demonstration establishes Competitive

Areas by Occupational Family.

Part 351.504, Credit for Performance:

as it relates to years of credit.

Part 351.701, Assignment Involving

Displacement: to the extent that

employees bump and retreat rights will

be limited to one payband except in the

case of 30% preference eligibles which

is a position equivalent to five GS

grades below the minimum grade level

of his/her payband.

Part 430 Subpart B Performance

Appraisal for General Schedule,

Prevailing Rate, and Certain Other

Employees: Employees under the

demonstration project will not be

subject to the requirements of this

subpart.

Part 432: Modified to the extent that

an employee may be removed, reduced

in band level with a reduction in pay,

reduced in pay without a reduction in

band level, and reduced in band level

without a reduction in pay based on

unacceptable performance. Also

modified to delete reference to critical

element. For employees who are

reduced in band level without a

reduction in pay, Sections 432.105 and

432.106(a) do not apply.

Part 432, Sections 104 and 105:

Proposing and Taking Action Based on

Unacceptable Performance: In so far as

references to ‘‘critical elements’’ are

deleted and adding that the employee

may be ‘‘reduced in grade, or pay, or

removed’’ if performance does not

improve to acceptable levels after a

reasonable opportunity. In addition,

requirements waived to the extent that

a reduction in band level is taken based

on skill utilization criteria when there is

no reduction in pay.

Part 511 Classification Under the

General Schedule: (to the extent that

grades are changed to broadbands, and

that white collar positions are covered

by broadbanding).

Part 530, Subpart C: Special salary

rates.

Part 531, Subparts B, D, and E:

Determining rate of basic pay, withingrade increases, and quality step

increases.

Part 531, Subpart F: Locality pay—

This waiver applies only to the extent

necessary to allow demonstration

project employees to be treated as

General Schedule employees, and basic

rates of pay under the demonstration

project to be treated as scheduled

annual rates of pay. This waiver does

not apply to ST employees who

continue to be covered by these

provisions, as appropriate.

Part 536, Grade and pay retention—

This waiver applies only to the extent

necessary to (1) replace ‘‘grade’’ with

‘‘pay band’’; (2) provide that pay

retention provisions do not apply to

conversions from General Schedule

special rates to demonstration project

pay, as long as total pay is not reduced,

and to reductions in pay due solely to
11716 Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / Notices

the removal of a supervisory pay

adjustment upon voluntarily leaving a

supervisory position; and (3) provide

that an employee on pay retention

whose performance rating is ‘‘U’’ is not

entitled to 50 percent of the amount of

the increase in the maximum rate of

basic pay payable for the pay band of

the employee’s position. This waiver

does not apply to ST employees unless

they move to a GS-equivalent position

under the demonstration project under

conditions that trigger entitlement to

pay retention.

Part 550.703: Severance Pay—This

waiver applies only to the extent

necessary to modify the definition of

‘‘reasonable offer’’ by replacing ‘‘two

grade or pay levels’’ with ‘‘one band

level’’ and ‘‘grade or pay level’’ with

‘‘band level’’.

Part 550.902: Hazardous Duty

Differential—This waiver applies only

to the extent necessary to allow

demonstration project employees to be

treated as General Schedule employees.

This waiver does not apply to ST

employees.

Part 575, Subparts A, B, C, and D:

Recruitment Bonuses, Relocation

Bonuses, Retention Allowances, and

Supervisory Differentials—This waiver

applies only to the extent necessary to

allow employees and position under the

demonstration project covered by broad

banding to be treated as employees and

positions under the General Schedule.

This waiver does not apply to ST

employees who continue to be covered

by these provisions, as appropriate.

Part 591, Subpart B: Cost-of-Living

Allowances and Post DifferentialNonforeign Areas—This waiver applies

only to the extent necessary to allow

demonstration project employees to be

treated as employees under the General

Schedule. This waiver does not apply to

ST employees who continue to be

covered by these provisions, as

appropriate.

Part 752.401 (a)(3): Adverse Actions—

This waiver applies only to the extent

necessary to replace ‘‘grade’’ with ‘‘pay

band’’.

Part 752.401 (a)(4): Adverse Actions—

This waiver applies only to the extent

necessary to provide that adverse action

provisions do not apply to (1)

conversions from General Schedule

special rates to demonstration project

pay, as long as total pay is not reduced

and (2) reductions in pay due to the

removal of a supervisory pay adjustment

upon voluntary movement to

nonsupervisory positions.

Appendix A: Occupational Series by

Occupational Family

I. Engineers & Scientists

0180 Engineering Research Psychologist,

Engineering Psychologist

0801 General Engineer, Human Factors

Engineer, Value Analysis Engineer

0806 Materials Engineer

0830 Mechanical Engineer

0850 Electrical Engineer

0854 Computer Engineer

0855 Electronics Engineer

0861 Aerospace Engineer, Senior

Research Scientist

0896 Industrial Engineer

1301 Physical Scientist

1515 Operations Research Analyst

1520 Mathematician

II. E&S Support

0301 Data & Configuration Management,

Standardization

0334 Computer Specialist

0346 Logistics Management Specialist

0802 Aerospace Engineering Technician

0856 Electronics Technician

1082 Technical Information Writer

1083 Technical Publications Editor

1084 Visual Information Specialist

1103 Industrial Property Management

Specialist

1410 Librarian (Physical Sciences &

Engineering)

1412 Technical Information Specialist

1601 Maintenance Program Specialist,

Equipment Manager

1670 Equipment Specialist

1910 Quality Assurance Specialist

2001 General Supply Specialist

2181 Aircraft Pilot

III. Business Management

0018 Safety & Occupational Specialist

0201 Personnel Management Specialist

0301 Misc Administrative & Program

0341 Administrative Officer

0343 Management/Program Analyst

0510 Operating Accountant

0560 Budget Analyst

0905 Attorney Advisor

1035 Public Affairs Officer

1060 Photographer

1071 TV Production Specialist

1102 Contract Specialist

IV. General Support

0303 Misc Clerk and Assistant

0312 Clerk-Stenographer

0318 Secretary

0326 Office Automation Clerk

0344 Management Assistant

0525 Accounting Technician

0561 Budget Assistant

1105 Purchasing Agent

1106 Procurement Technician,

Procurement Assistant

2005 Supply Clerk, Supply Technician

2134 Shipping Clerk

BILLING CODE 6325–01–P
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BILLING CODE 6325–01–C

Appendix C: Performance Elements

All employees will be rated against at least

the five generic performance elements listed

through ‘‘e’’ below. Technical competence is

a mandatory critical element. Other elements

may be identified as critical by agreement

between the rater and the employee.

Generally, any performance element

weighted 25 or higher should be critical.

However, only those employees whose duties

require manager/leader responsibilities will

be rated on element ‘‘f.’’ Supervisors will be

rated against an additional critical

performance element, listed at ‘‘g’’ below:

a. Technical Competence. Exhibits and

maintains current technical knowledge,

skills, and abilities to produce timely and

quality work with the appropriate level of

supervision. Makes prompt, technically

sound decisions and recommendations that

add value to mission priorities and needs.

For appropriate career paths, seeks and

accepts developmental and/or special

assignments. Adaptive to technological

change. (Weight range: 15 to 50)

b. Working Relationships. Accepts personal

responsibility for assigned tasks. Considerate

of others’ views and open to compromise on

areas of difference, if allowed by technology,

scope, budget, or direction. Exercises tact and

diplomacy and maintains effective

relationships, particularly in immediate work

environment and teaming situations. Always

willing to give assistance. Shows appropriate

respect and courtesy. (Weight Range: 5 to 15)

c. Communications. Provides or exchanges

oral/written ideas and information in a

manner that is timely, accurate and cogent.

Listens effectively so that resultant actions

show understanding of what was said.

Coordinates so that all relevant individuals

and functions are included in, and informed

of, decisions and actions. (Weight Range: 5 to

15)

d. Resource Management. Meets schedules

and deadlines, and accomplishes work in

order of priority; generates and accepts new

ideas and methods for increasing work

efficiency; effectively utilizes and properly

controls available resources; supports

organization’s resource development and

conservation goals. (Weight Range: 15 to 50)

e. Customer Relations. Demonstrates care

for customers through respectful, courteous,

reliable and conscientious actions. Seeks out

and develops solid working relationships

with customers to identify their needs,

quantifies those needs, and develops

practical solutions. Keeps customer informed

and prevents surprises. Within the scope of

job responsibility, seeks out and develops

new programs and/or reimbursable customer

work. (Weight Range: 10 to 50)

f. Management/Leadership. Actively

furthers the mission of the organization. As

appropriate, participates in the development

and implementation of strategic and

operational plans of the organization.

Develops and implements tactical plans.

Exercises leadership skills within the

environment. Mentors junior personnel in

career development, technical competence,

and interpersonal skills. Exercises due

responsibility of technical/acquisition/

organizational positions assigned to them.

(Weight Range: 0 to 50)

g. Supervision/EEO. Works toward

recruiting, developing, motivating, and

retaining quality team members; takes

timely/appropriate personnel actions, applies

EEO/merit principles; communicates mission

and organizational goals; by example, creates

a positive, safe, and challenging work

environment; distributes work and empowers

team members. (Weight Range: 15 to 50)

BILLING CODE 6325–01–P
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[FR Doc. 97–6171 Filed 3–10–97; 8:45 am]

BILLING CODE 6325–01–C