Half of annual pay raise to go into NSPS pay pools Published Sept. 24, 2007 By Kevin Gilmartin ESC Public Affairs Hanscom AFB, Mass. -- Deputy Secretary of Defense Gordon England has announced that, for the 110,000 Department of Defense employees who are in Spiral 1 of the National Security Personnel System, half of January's government-wide pay increase will be used to adjust base salaries of those with an acceptable performance rating, and half will be added to performance pay pools and distributed based on performance. He also announced that all of the January 2009 government-wide pay increase will be allocated to the NSPS performance pay pools. NSPS, a new a pay for performance system that replaces the old General Schedule system, was implemented for non-bargaining unit employees at Hanscom and at some other Electronic Systems Center locations Jan. 21, while the 38th Engineering Installation Group at Tinker AFB, Okla. and 850th Electronic Systems Group at Peterson AFB, Colo. converted to NSPS in 2006. Under NSPS, employees are rated by their supervisors on a scale of one to five and rewarded at the end of a performance period based on how they performed against well defined job performance objectives that are closely tied to their organization's mission. Supervisors' ratings are reviewed by a higher level reviewer and forwarded to a pay pool to determine how much compensation each employee will receive in the form of pay pool "shares," and how that compensation will be divided between salary and bonus. Employees rated a one will receive no salary adjustment or pay pool shares, while those rated at two will receive an adjustment to their base salary as determined by the Secretary of Defense, but will receive no pay pool shares. Employees rated three or higher will receive any rate range change along with a share or shares of the pay pool, depending on their rating. The pay pools are funded by portions of the government wide annual pay increase along with funds that historically have been used for within-grade increases, quality step increases and promotions between General Schedule grades that no longer exist under NSPS, and annual bonuses. After the appraisal cycle ends Sept. 30, "shares" of the pay pool will be distributed to the best performers, while fair to unacceptable performers will receive less, or in some cases, no reward. "Secretary England's ruling means that NSPS employees will receive half of the 2008 general pay increase that the GS employees will receive, with the other half of the GPI going into the pay pools for distribution in performance pay outs," said Bob Youtt, ESC's NSPS program manager. "People need to recognize we are now operating under a different management system with different, and greater, opportunities for rewards based on performance." The amount of the annual government-wide pay increase has not yet been determined by Congress and the President.