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04/08/23

National Security Personnel System

Introduction to Pay Pool Management for Rating Officials

04/08/23 Pay Pool Management 2

Topics

• Introduction and Course Objectives

• What are Pay Pools and Why are They Important?

• NSPS Pay Pool Process

• Compensation Workbench (CWB) Demonstration

• Success Guides


Proposed AgendaFor AM or PM Sessions

If AM Session0830-0845 Introduction

0845-0900 Overview of Performance Mgt &

Pay Pool Process

0900-0945 Pay Pool Process:PLAN Phase

BREAK

0100-1030 Pay Pool Process: PREPARE Phase

1030-1115 Pay Pool Process:PAY Phase

BREAK

1130-1200 Financial Considerations

1200-1230 Automated Tools/Demo

If PM Session1300-1315 Introduction

1315-1330 Overview of Performance Mgt &

Pay Pool Process

1330-1415 Pay Pool Process:PLAN Phase

BREAK

1430-1500 Pay Pool Process: PREPARE Phase

1500-1545 Pay Pool Process:PAY Phase

BREAK

1600-1630 Financial Considerations

1630-1700 Automated Tools/Demo


Course Objectives

After completing this course you will be able to:

• Understand the pay pool process including–The sequence and steps involved in the pay pool

process–How the PAA and CWB support the pay pool

process

• Understand the impact of the Rating Official’s actions on the pay pool process including

–Rating official’s roles and responsibilities–The importance of good job objectives and

assessments, and ongoing communication


Ground Rules

• Share your question or comments with the group

• Hold side conversations

• Ask questions

• Focus on understanding the pay pool concepts

Please…

• Lay low…or read your Blackberry

• Focus on changing the pay pool concepts

Please do not…


Parking Lot


What are Pay Pools?


What are Pay Pools?

Pay Pool$

$$

$

$

$

$


What are Pay Pools?

Pay Pool Fund


Pay Pool Process Goalsfor Supervisors

NSPS focuses on flexibility, accountability, and results

– The pay pool process holds managers/supervisors accountable for ensuring employees are rated fairly

– An intricate system of checks and balances ensures results are met and all decisions conform to Merit System Principles


Pay Pool Overview


Pay Pool Overview

• Under the GS system, employees progress through each grade in pay-steps based on elapsed time

• Under pay for performance, employees progress through each band based on pay increases linked to ratings

• Pay pools are needed to support NSPS

– Provide a mechanism for ensuring multi-level accountability and responsibility

– Preserve the integrity of the performance management system


Pay Pool Overview

Exec. Director

Division Chief

Branch Chief Branch Chief

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Pay Pool Overview


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Pay Pools ensure that the pool fund is distributed consistently and fairly across the group


Factors for Pay Pool Success

Informed Judgment

Ethical Behavior

Shared Understanding

ContinuousCommunication

Fairness andConsistency

Appropriate Standards of

Conduct


NSPS Performance Management

&

Pay Pool Process


Performance Management and Pay Pool Processes

Plan Phase (Starts Oct 1st of Yr 1)

• Setup the pay pool

• Publish relevant information

• Establish timelines

• Work with your employees to develop their performance plans

Prepare Phase (Around March of Yr2)

• Complete an interim assessment for each employee

• Participate in the mock pay pool – recommend ratings, shares, and payout split

Pay Phase (Starts Oct 1st of Yr 2 until first Pay Period in January of Yr 3)

• Reconcile ratings and payout decisions from your recommendations

• Communicate decisions to employees


• Core Characteristics– Results-oriented, mission-focused– Clear and understandable (fair, credible, and transparent)– Direct link between pay and performance and mission

accomplishment– Reflect meaningful distinctions in employee performance– Robust (capable of supporting pay decisions)

• Design Features– Job Objectives – the “What” – are the primary focus– Manner of performance – the “How” – influence the objective rating

(contributing factors)– Supervisors are rated on at least one supervisory objective– Higher level review of objectives and recommended ratings

Performance Management System


Pay Pool ProcessPlan Phase

Setup the pay pool

Establish timelines

Publish relevant information

Performance Mgt. ProcessMonitor & Develop Phases

Pay Pool ProcessPrepare Phase

Performance Mgt. Process Rate & Reward Phases


Performance Mgt. Process Plan Phase

Pay Pool ProcessPay Phase


Pay Pool ProcessPlan Phase for Supervisors

•Review your pay pool structure information

•Learn the composition of the pay pool panel

•Be aware of pay pool panel deliberation schedules

•Plan your employees reviews around these timelines

•Read published information

•Talk it over with other Rating Officials














Pay Pool Size

• Size of the pay pool– Too small (<35) - pay pool workload on the organization may be greater than

it needs to be

– Too large (>350) - pay pool workload may become unmanageable

• Senior managers in the pay pool should understand the work being done by the employees so they can fairly review recommended ratings, shares, and payout splits

• Matrixed organizations should seek input on performance from the organizations their employees support

Perf Mgmt System Population # Pay Pools Avg Size Largest SmallestAir Force Lab Demo 2,486 11 226 410 38DoD Acquisition Demo 11,392 95 120 519 3NSPS Spiral 1.1 10,929 78 140 483 22


Pay Pool Structure Following Organizational Lines

Pay Pool

Pay Pool Roles







Exec. Director

Pay Pool Manager

Division Chief

Rating Official

Branch Chief

Rating OfficialBranch Chief

Rating Official

Employee

Employee

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Employee

Division Chief

Rating Official

Branch Chief


Rating Official

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Branch Chief

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Group Head

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Commander

PRA


Pay Pool Structure Following Organizational Lines

Pay Pool Panel

Pay Pool Roles







Exec. Director

Pay Pool Manager

Division Chief

Rating Official

Branch Chief


Rating Official

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Employee

Division Chief

Rating Official

Branch Chief


Rating Official

Employee

Employee

Employee

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Branch Chief

Rating Official

Employee

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Group Head

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Employee

Commander

PRA


Sub-Pay Pool Structure

Sub-Pool A Sub-Pool B







Exec. Director

Pay Pool Manager

Division Chief

Rating Official

Branch Chief


Rating Official

Employee

Employee

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Employee

Division Chief

Rating Official

Branch Chief


Rating Official

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Branch Chief

Rating Official

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Group Head

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Commander

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Sub-Pay Pool Structure

Sub-Pool Panel A Sub-Pool Panel B







Exec. Director

Pay Pool Manager

Division Chief

Rating Official

Branch Chief


Rating Official

Employee

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Division Chief

Rating Official

Branch Chief


Rating Official

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Group Head

Employee

Employee

Commander

PRA


Roles and Responsibilities

• Rating Official

• Pay Pool Panel Members

• Pay Pool Manager

• Performance Review Authority (PRA)

• Pay Pool Administrator/Advisor








Rating Official

• Ensure employees understand the NSPS performance management process as first line supervisor

• Communicate performance expectations and jointly develop job objectives with employees

• Provide meaningful feedback throughout the year

Manage the performance of assigned employees








Rating Official (Cont’d)

• Complete a written assessment of the employee’s performance in the PAA

• Recommend a rating of record, share assignment, and payout distribution to the pay pool panel

• Communicate the final rating of record, share assignment, and payout distribution

Well-written objectives and assessments are critical to a successful pay pool process








References for Roles and Responsibilities

To learn more about your Roles and Responsibilities as a Supervisor, visit the websites listed below:

DoD NSPS PEO website - http://www.cpms.osd.mil/nsps/

– NSPS 101

– Brochures: Focus on Performance, Communicating, Pay Pool Processes at Glance

– HR Elements for Managers, Supervisors and Employees– Implementing Issuances (Subchapter 1940 and Subchapter 1930.9) – PAA Tutorial

• USMC NSPS website – https://www.manpower.usmc.mil/portal/page?_pageid=278,2008306&_dad=

portal&_schema=PORTAL LOI on Performance Management LOI on Pay Pool Management







https://www.manpower.usmc.mil/portal/page?_pageid=278,2008306&_dad=portal&_schema=PORTAL






Pay Pool Panel Members(and sub-pools)

• Review and validate recommendations on ratings, shares, and payout distribution

• Represent their employees fairly and consistently

• Make adjustments that will result in equity and consistency across the pay pool

• Communicate with the rating officials and/or sub-panels when ratings change








Pay Pool Manager

• Oversee the pay pool process and enforce pay pool procedures and policies

• Ensure pay pool funds are distributed in compliance with financial management policies and are based on employee performance

• Ensure rating officials comply with timely issuance of interim reviews and appraisals

• Determine funding decisions in conjunction with the Performance Review Authority before finalizing pay pool panel decisions

• Approve all ratings, shares, and payouts








Performance Review Authority (PRA)

• Manage the civilian pay-for-performance budget and discretionary performance payout fund

• Address issues associated with multiple pay systems during the conversion to NSPS

• Oversee the composition of the pay pool

• Provide guidance to pay pool managers

• Monitor and adjust pay pool fund distribution

• Oversee publication of any Notices to Employees

• Respond to grievances– Manage any pay for performance reserve fund

– Decide and approve outcome of grievance








Pay Pool Administrator/Advisor

• Assist in the setup and maintenance of the pay pool identifiers and rating hierarchy

• Serve as a local helpdesk for the IT tools and as an expert in the pay pool process

• Populate the Compensation Workbench tool prior to pay pool panel meetings

• Assist the pay pool panel work with the Compensation Workbench during panel meetings








Establish Timelines

• Develop a schedule of pay pool events for the entire cycle including:– Mock pay pools– Sub-panel meetings– Pay pool panel meetings– Communication of overall results to workforce

• Help everyone see the big picture of what happens when

• Help organize logistics (staff schedules, rooms, a/v, etc.)








Communicate Relevant Information

• Pay pool panel manager and members (including sub-pay pool structure)

• Pay pool funding (if you know it)

• Schedule of events for the year

• Who to contact if they are having problems with writing objectives or the automated tools

• Pay schedules and pay bands

• Other local information since individual commands may have different policies








Lessons Learned

• Leadership support is critical

• Use a meeting to introduce the pay pool structure, members, and layout schedule of events

• Pay attention to objectives from the beginning – take higher level reviewer role seriously– Fewer job objectives is better than many

• Attend training








Plan Phase Success!Performance Mgt. ProcessMonitor & Develop Phases






• The plan phase is successful if:– Everyone knows the rating relationships for which they are responsible– The schedule of events is distributed and processes are defined and

implemented

• What are indicators of success for the Rating Official?– Objectives are well-written following the SMART framework– Employees understand the Pay Pool Process, including scheduled

events and business rules– Employees know their objectives and know what they need to do to

meet these objectives

QUESTION: Where can you find resources to improve your NSPS skills?


Questions


Performance Management CycleMonitor and Develop Phases

• Ongoing Dialogue– Takes place throughout the year– Acknowledge accomplishments– Reinforce positive behaviors– Anticipate and address difficulties– Remedy shortfalls

• Interim Feedback– Check progress– Provide feedback– Make course corrections

Question: What impact will your communication efforts have on the mission of the organization?

Communication is critical for success!








Pay Pool Management ProcessPrepare Phase

• Conduct a mock pay pool

• Build a shared understanding of the performance levels

• Practice and revise the process

• Establish a communication protocol








Pay Pool Management ProcessPrepare Phase for Supervisors

–Use the Mock as an opportunity to practice writing assessments and recommending ratings

–Get up to speed with the current version of the Performance Appraisal Application (PAA)

–Become familiar with business rules

–Review and refer to the performance indicators and contributing factors benchmarks

–Follow pay pool protocol for communicating results with employees









Continuous communication is critical to NSPS success

At every level, there must be clear communications on:

•Performance expectations

•Employee job objectives

•Management leadership roles









Day 1:

Session: 0800-1600

Lunch: 1200-1300

• 0800: Introduction

• 0815: 2-Day Session Process Briefing

• 0915: Identify employees to be reviewed

• Employees with ratings of 1, 2, or 5

• Employees flagged for changed rating of record

• Sample of employees with ratings or 3 or 4

• 0945: Discuss ratings and objectives

• 1200: Lunch

• 1300: Continue ratings and objectives discussion – modify list of employees to be reviewed as needed (add or delete)

• 1545: Questions and Answers

• 1600: End of Day 1

Day 2:

Session: 0800-1600

Lunch: 1200-1300

• 0800: Recap of Day 1

• 0815: Discuss Shares

• 1000: Discuss Payout Splits

• 1200: Lunch

• 1300: Review CWB graphs and discuss/analyze

• 1400: Refine shares and payout splits

• 1430: Discuss OAR and EPI

• 1445: Discuss Control Points

• 1500: Discuss Pro-ration

• 1530: Questions and Answers

• 1545: Conclusion

• 1600: End of Day 2

Example of a Facilitation Session’s Agenda


What is a Mock Pay Pool

• Opportunity to practice the end of cycle appraisal process and pay pool panel meetings

• Can be aligned with interim feedback activities

Every demo and Spiral 1.1 organization has said that a mock pay pool is critical to success








Conducting a Mock Pay Pool

• Preparation

– Establish automation, schedules, and pay pool structure

– Estimate a share value (optional) and discuss funding issues

• Conduct the mock

– Pay pool panel meets to review and reconcile ratings, shares, payouts

– Communicate information about the mock to the workforce

Treat the mock as if it were the real thing








Conducting a Mock Pay Pool

Writing Assessments

• Clearly state upfront whether the employee did not meet, met, or exceeded the objective in your assessment. It should be the first sentence/bullet

• Your objective rating should focus on results and impact. Provide examples where appropriate, especially for ratings other than 3

• If the contributing factors affected the objective rating (+1 or -1), clearly specify your reasoning

• Address the objective, not the employee self-assessment

Practice writing good assessments for your Mock Pay Pool








Benefits of a Mock Pay Pool

• Provides experience and greater understanding of the process, and helps identify process gaps and improvements

• Provides the opportunity to define and refine your business rules

• Helps identify issues with the pay pool structure or pay pool roles

• Provides a feel for time requirements

Conducting a mock exercise will make your real process more effective and efficient








Mock Pay Pool Lessons Learnedfrom Spiral 1.1

• Job objectives and assessments

– Most job objectives needed significant improvement

– Employee and supervisory written assessments should be linked to objectives and focused on results

– Supervisors should take active role in helping employees write quality assessments (i.e. Refer them to iSuccess)

– Document deviations from business rules








Mock Pay Pool Lessons Learnedfrom Spiral 1.1 (cont)

• Develop pay pool business rules

– Methodology for determining share assignment

– Methodology for payout distribution

– Pay pool panel meeting procedures

– Documentation required for certain ratings (2 or 5?)

– Process for communicating rating changes back to rating official

Business rules can help ensure fairness and consistency as well as save time








Building a Shared Understanding of Performance Levels

• Re-read and understand the performance indicators and contributing factor benchmarks

• Differentiate performance within the context of YOUR jobs and YOUR organizational activities

Question: What happens to the payout if all employees are rated 5?

Develop a shared understanding of what level 3, 4 and 5 performance means in your organization








Prepare Phase Success!

• How do you know if the prepare phase was successful? – The pay pool process has been rehearsed and improved – A communication protocol has been established between the panel

and rating officials

• How do you know if the rating official has been successful?– The panel’s ability to assess performance has improved as a direct

result of rating official’s input – Both the objectives and assessments are well-written and serve to

substantiate the panel’s decision making process








• What can I do as a rating official to prepare myself for my role?– Monitor and improve your skills at writing objectives

and assessments, and giving constructive feedback– Understand the division of labor and responsibilities

deriving from the pay pool process– Establish a communication protocol that makes sense

and use it to communicate with your employees – Expect and acknowledge panel feedback– Develop good working relationships with panel

members and with your employees







Prepare Phase Success! (cont)


Questions


Performance Management CycleRate and Reward Phases

• Rate Performance– Employee self-assessment– Supervisory assessment– Objective ratings and contributing factors– Rating of record

• Reward Performance– Share assignment– Performance payout

Question: What do Rating Officials recommend to the Pay Pool Panel?

NSPS rewards employee performance








Objective Ratings

• Rating official will assign rating (1-5) to each job objective based on accomplishments and impact to organizational goals

• Performance Indicators– Descriptions of levels or thresholds of employee performance– Benchmarks defined at level 3 and level 5 performance– Standardized across the DoD, but vary by pay schedule and pay

band








Contributing Factors

• Assessment of the contributing factors, taken as a whole, can adjust the objective rating by one point in either direction

• Benchmarks are described at the “Expected” performance and “Enhanced” performance levels for each contributing factor

• In Spiral 1.1, most of the time, the contributing factors had no effect on ratings

Question: When they did, which direction do you think they affected the ratings more frequently? Up or down?








Contributing Factors (cont)

…matching or exceeding the description provided in the Enhanced benchmark descriptor(s)

…matching or exceeding the description provided in the Expected benchmark descriptor(s), but below that described by the Enhanced benchmark descriptor(s)

…below the description provided in the Expected benchmark descriptor(s)

+1

-1

0

In the execution or accomplishment of the assigned job objective the employee demonstrated a manner of performance…








Rewarding Performance

Rating of Record

Rating of Record Descriptor

Eligible For

5 Role Model - Performance-Based Pay

- Rate Range Adjustments

- Local Market Supplement Increases

4Exceeds

Expectations

3 Valued Performer

2 Fair

- Rate Range Adjustments

- Local Market Supplement Increases

1 Unacceptable - No Increases








Shares

• Create the link between performance and reward

• Allow further distinction between levels of contribution

• Expressed as a percentage of salary

Rating of Record Share Range

5 5 or 6

4 3 or 4

3 1 or 2

2 0

1 0








Performance Payout

• Share Value

• Performance Payout is the employee’s salary increase and/or bonus

• Changing either the pay pool funding or the number of shares assigned will change the share value

Performance Payout = Base Salary X Share Value X Shares

Share value =Pay pool fund

(salary x shares) for each employeeShare value =

Pay pool fund

(salary x shares) for each employee

Pay pool fund

Share valueShares








Performance Payout

• Payout splits are often decided per local guidance– Example: same as the funding split

• Business rules can be used to standardize payout splits

Share Allocation Default Example: 2.51 to 3.00 = 3: 1 Share 3.01 to 3.50 = 3: 2 Shares 3.51 to 4.00 = 4: 3 Shares 4.01 to 4.50 = 4: 4 Shares 4.51 to 5.00 = 5: 5 or 6 Shares








Performance Payout Example

Base Salary

Rating of Record

Shares

Share Value

Performance Payout

Salary Increase

Bonus

$89,000

3 2 1.22% $2,171 60% 40%

$1,302 $869

Performance Payout = Base Salary X Share Value X Shares

= $89,000 X 1.22% X 2 $2,171









• The Pay Pool manager is responsible for ensuring the panel is trained

• Prepare for appraisal process and panel meetings

• Reconcile ratings and payout decisions

• Communicate decisions to employees








Pay Pool ProcessPay Phase for Supervisors

•Per MC LOI, Pay Pool Panel Members review recommended employee performance ratings, share allocations, distribution of payouts, and manage performance cycle events in accordance with PRA policy

•Per MC LOI, rating officials, at a minimum, must be certified on the NSPS performance management system prior to performing rating official duties








Prepare for the Appraisal Process and Panel Meetings

• Validate the pay pool identifiers and organizational hierarchy are built correctly

• Establish or verify pay pool funding

• Verify and communicate schedule of events to workforce

• Communicate business rules and other important information down to sub-panels and rating officials








Sample Schedule of Events

Event TimeframePerformance rating cycle ends September 30, 2007

Employees complete self-assessment and transfer to rating official

October 12, 2007

Rating Officials complete appraisals and recommend ratings, shares, payouts

October 26, 2007

Sub-Panel meet to reconcile ratings, shares, and payouts

November 5 – 16, 2007

Pay Pool Panel meet to reconcile ratings, shares, payouts, and reconcile budget

December 3 – 7, 2007

Results Finalized December 14, 2007

Rating officials communicate results to employees

December 17 – January 6, 2008

Payouts effective January 6, 2008

Aggregate results shared with workforce January 18, 2008








Rating Officials Submit Recommendations

Rating Official

Employee

Employee

Employee

Employee

Employee

Employee Salary Rating SharesShare Value

PayoutSalary

IncreaseBonus

Joe $89,000 3 2 ? ? 60% 40%

Objective Rating

Contributing Factor Assessment

Adjusted Rating

Objective #1 3 +1 4

Objective #2 3 0 3

Objective #3 3 0 3

Average Rating 3.33

Rating of Record 3

Sally $75,000 3 1 ? ? 100% 0%

Alex $100,000 5 5 ? ? 60% 40%

Derrick $110,000 4 3 ? ? 60% 40%

Susan $65,000 3 2 ? ? 60% 40%








Pay Pool Panel MeetingsReconciliation Process

• Review and validate the recommendations on ratings, shares, and payout distribution

• Represent employees in the pool fairly and consistently

• Make adjustments that result in equity and consistency across the pay pool

• Communicate with the rating officials when ratings change







Panel members review ratings, shares, and payouts using the Compensation Workbench (CWB)


Pay Pool Panel MeetingsReconciliation Process

• Rating Officials recommend ratings, shares, and payout splits– Per MC LOI, if the immediate supervisor is not the rating official, the

supervisor will provide meaningful input to the rating official regarding the employee’s performance and accomplishments.

– The rating official is responsible for considering such input in determining the recommended rating of record.

– Rating officials will comply with local pay pool policies and procedures, performance management directives, and any other applicable regulations.







Panel members review ratings, shares, and payouts using the Compensation Workbench (CWB)


Using the CWB – Ratings(Compensation Workbench)

• During the sub-pay pool panel meeting, the panel will review and may change ratings

• If the panel changes a rating, the change should be communicated to the rating official








Using the CWB – Ratings (cont)

• Panel will review ratings across the pay pool– Rating officials

– Sub-pools

– Divisions, branches, etc.








Using the CWB - Shares

• Once the ratings have been finalized, the panel will review and may revise assigned shares

• Business rules can be established to assign shares– For example, un-rounded average rating, position in pay band, a

default of the lower number with justification required for the higher








Using the CWB - Payout Split

• Once ratings and shares are completed, the panel will then review and may revise recommended pay out splits

• Establish business rules for payout split– Current salary, funding levels, recent promotion, etc.








Using the CWB - Control Points

• Control points are used to manage progression through the pay band

• Control points are optional. The pay pool needs to decide whether or not to use them








Using the CWB - EPI and OAR(Optional)

• Panel can also allocate EPI and OAR salary increases and bonuses– A rating of 5 is required for an EPI salary increase or bonus– A rating of at least 3 is required for an OAR salary increase or bonus

• EPI and OAR funding is separate from the pay pool funding

• Pay pool should develop business rules on awarding EPI and OAR

EPI = Extraordinary Pay Increase OAR = Organizational/Team Achievement Recognition








Using the CWB - Funding

• Enter value for your Pay Pool Fund Elements

• Enter Estimated Share Value

• Assign Salary Increase ($ or %)








Determine Final Share Value and Reconcile Budget

• Determine final share value

• Finalize payout distributions and reconcile budget








Pay Pool Ethics

• Rating officials make recommendations for ratings, shares, and payout splits

• Panels review results to make sure they are fair and consistent across the pay pool

• Results are not final until approved by the pay pool manager– Don’t say: “I gave you a rating (number of shares or payout split), but the

panel changed it.”

• The pay pool manager should typically not be part of the pay pool

To be viable, the system must be fair and transparent. Employees need to understand the

process, but not the details of the discussions








Communicate Results to Employees







Employee Name: Gerard Meltzer

Base Salary $81,960(on last day of rating cycle)

Pay Pool Manager: Simpson, Clark

Performance Cycle End Date: 9/30/2007

Rating Effective Date: 1/1/2008

Rating of Record: 3

Number of Shares Awarded: 1

Final Share Value (%): 2.8015%

Total Value of Awarded Shares: $2,296

Share DistributionBase Salary Increase ($): $1,148Bonus ($): $1,148

Employee Notice of Pay Pool Decisions

(Addendum to DD 2906)


Payout Example

EmployeeSalary

30 SeptRating Shares

Share Value

PayoutSalary

IncreaseBonus

Joe $89,000 3 2 1.675% $2,981 $1,789 $1,192

Salary

6 Jan+

Rate Range Adjustment

=New Base

+Salary

Increase= New Base + LMS

Joe was reassigned and received a 5% increase on November 15th. His base salary changed to $93,450

$93,450 + $1,588 (1.7%) = $95,038 + $1,789 = $96,827 + LMS

Bonus

$1,192LMS = local market supplement








Share Aggregate Results with Workforce

• Provides employee’s perspective on where they stand in the organization

• Promotes a sense of openness into the pay pool process

• Shares results that cannot be identified with an individual or small group of individuals*– General workforce demographics (#s in each pay band)

– Rating Distribution and average rating

– Rating Distribution and average shares

– Average payout, largest payout

– Average salary increase

– Average Bonus

– Share Value

* Note that the PEO provides a spreadsheet that computes many of these statistics








Pay Phase Success!

• How do you know if the Pay phase was successful?

– The pay pool process was completed within the specified time

– Ratings were fair and equitable across the pay pool

– Rating changes were clearly communicated to rating officials

– Rating officials had the opportunity to provide additional justification

before the panel finalized its changes

– Shares and pay pool funds were allocated in a way that rewards and

encourages high performance

– Employees gained trust in the process

– Lessons learned were captured for next year

– The number of requests for reconsiderations is low








Pay Phase Success! (cont)

• How do you know if the Rating Official has been successful? – Pay pool panel had all the information from the rating official before

the panel meetings

– Process was manageable and did not distract rating officials from

mission accomplishment

– Employees believe they were represented fairly to the pay pool panel

– Employees believe that the pay pool process is consistent and fair

– Employees realize that good performance is rewarded fairly in your

organization








Financial Considerations


Pay Pool vs. GS Funding

Statutory Compensation Requirement:SAME CIVILIAN PAY DOLLARS

NSPS Just Changes How You Distribute Those Dollars


Title 5 NSPSSame Civilian Pay Dollars!

• * Performance-Based Payouts (Pay Pool)- Salary Increases (No less than 2.26%)- Bonuses (Component Decision)

• Promotions To Higher Bands• Reassignments• Accelerated Compensation for Developmental Positions (ACDP)• Extraordinary Pay Increases (EPI)• Organizational Achievement Recognition (OAR)• Chapter 45 Incentive Awards• Rate Range Adjustments• Local Market Supplement Adjustments

• Within-Grade Increases• Quality Step Increases• Promotions To Higher Grades• Chapter 45 Incentive Awards• GS Rate Increases• GS Locality Pay Increases

Civilian Personnel Funding Allocations

* Money for payouts protected by policy


Pay Pool Funding

Pay Pool Fund

Element 3Annual BonusesComponent Discretion (%)

Element 2Remaining Portion of General Pay IncreaseSet by SecDef (%)

Element 1Fixed percentageDoD-wide / Component Minimum (%)


Pay Pool Funding

• Element 1 funding is the replacement funding for step increases, quality step increases, and within-band promotions

• Element 2 is a portion of the general increase in pay ranges due to annual increases in the cost of labor.

• Element 3 is performance award or bonus funding and is based on historical funding for similar awards under the GS system.


General Pay Increases

In September 2007, the Deputy Secretary of Defense announced:

• January 2008: Half of the General Schedule Rate Increase will be allocated to pay pool funding as Element 2 and the remainder to the Rate Range Adjustment

• January 2009: All of the General Schedule Rate Increase will be allocated to pay pool funding as Element 2

General Schedule Increase

2008

1/2 1/2

Element 2 Rate Range Adjustment


General Pay Increasesfor Supervisors

• Element 2 will change from 0% to 1.25% (best estimate) in 2008 payout

• The dollars allocated to pay for performance will increase, which in turn will intensify the impact of rating, share, and payout recommendations made by rating officials

• This trend in moving the GS Rate Increase to the performance pool underlines the importance of rating officials and managers becoming skilled at NSPS


Pay Pool Funding Example (cont)

Element 1

2.5% = $20,650

Element 2

1.25% = $10,325

Element 3

1.5% = $12,390

Pay Pool Fund

5.25% = $43,365

• Pay pool XYZ has 10 employees -- the total base salary for those 10 employees is $826,000

• Total Base Salary X Funding Percentages = Pay Pool Fund

• $826,000 X 5.25% = $43,365


• Under NSPS, the Element 1 performance-based payouts will replace Title 5 Within Grade Increases (WGI), Quality Step Increases (QSI), and promotions between grades that have been banded (e.g., GS 9-13)

• To maintain equivalence with Title 5, pay pools should spend approximately the same amount they would have spent on Title 5 Within Grade Increases (WGI), Quality Step Increases (QSI), and promotions between grades that have been banded

What Did DoD Count in Determining Element 1 Funding?


All GS/GM Employees

Average last two years =

2.26%

Average last three years =

2.16%

Population Begin Pay End Pay % IncreaseProf/Admin 177,201 58,370 59,882 2.59%Tech/Spt 97,695 34,899 35,507 1.74%Super/Mgr 35,410 70,619 71,873 1.78%Total 310,306 52,378 53,576 2.29%



2005

2004

2003

Element 1 Funding for 2008 Payout:


Pay Pool Funding vs Civilian Personnel Costs

• Pay pool funding is different from your civilian personnel budget

• Pay pool funding is one of many things that can affect your civilian personnel costs; others include:– Separations– Hiring lags– New hire salaries– Reassignment salary increases– Extraordinary Pay Increases (EPI)– Organizational Achievement Recognition (OAR)– Accelerated Compensation for Developmental Positions (ACDP)


Questions – Parking Lot

Automated Tools

96

Step 1Download the pay pool data from DCPDS

Pay Pool Download File

(pipe-delimited text file)

Step 3Completes the pay pool panel meetings using CWB

CWB Spreadsheet

Step 2Import extracted data into the Compensation Workbench (CWB) spreadsheet

Pay Pool Upload File

(pipe-delimited text file)

Step 4Export the pay pool data out of the CWB

Step 5Upload the pay pool data into DCPDS staging tables

Pay Pool Data Flow

DCPDSPAA

97

Pay Pool Download File(pipe-delimited text file)

CWBSpreadsheet #1

(sub-pool #1)

Employee Selection Form1. Select type of import2. Select employees to import

Importing Sub-Pool Data

To create sub-pool spreadsheets, only one sub-pool’s data is imported into each CWB spreadsheet. This pool has three sub-pools.

CWBSpreadsheet #2

(sub-pool #2)


CWBSpreadsheet #3

(sub-pool #3)


98


PAA

• The Performance Appraisal Application (PAA) helps employees and supervisors manage performance under the National Security Performance System (NSPS)

• It streamlines and automates performance management processes and documentation requirements and makes it easier and more efficient to track and monitor performance

• As a rating official, you use the PAA to : – Initiate and edit information related to your employees’ performance plans

– Enter job objectives, assessments, and other information related to your employees’ performance plans

– Approve performance plans, interim reviews, and annual appraisals

– Route performance plan and appraisal information to your employees

– Submit recommended ratings

– Edit ratings

– Change rating official assignments


PAA – Main Page for Rating Officials

The rating official or employee creates the performance plan and enters draft job objectives and contributing factors (the rating official can also enter optional weights for the job objectives)


PAA- Rating Performance

• For each objective, the Rating Official submits his/her rating, which includes the impact of any Contributing Factor and/or Weight

• The pay pool panel reviews and approves the appraisal using the Compensation Workbench (CWB)


PAA – Employee Self-Assessment

• Employees are encouraged to complete self-assessments during the interim review and annual appraisal

• The self-assessment conducted as part of the annual review is an opportunity for employees to provide input to you about what they have accomplished during the year


PAA – Rating Official Assessment

• An integral part of the performance management process is your written assessment of your employee’s performance

• You also produce a recommended rating that is sent to a higher-level reviewer for review and approval


PAA – Shares and Payout Splits

• You produce a recommended number of shares and payout split that is sent to a higher-level reviewer for review and approval


CWB

• The Compensation Workbench (CWB) is a tool used by NSPS organizations to facilitate their sub-pay pool and pay pool panel meetings

• It is a spreadsheet similar to the one used during the pay pool panel training and mock pay pool exercises

• It contains all the functionality needed to conduct an effective pay pool.


CWB Specific Functionality

– Set a pay pool budget– Assign and reconcile ratings, shares, and payout

distributions– Assign and enforce control points– Prorate salary increase and bonus amounts– Distribute OAR and EPI salary increases and bonuses– Determine a final share value– Reconcile your distribution of salary increases and

bonuses with your pay pool budget – Generate a summary of rating, share, and payout

distribution for each pay pool member (disabled for mocks)


CWB – Instructions

Importing Data into the Spreadsheet

• Data can be imported from the DCPDS data file and other pay pool spreadsheets. How you do your import depends on whether or not you have sub-pay pools, and whether or not you want to create separate spreadsheets for each of those sub-pools


CWB - Funding

The Funding Worksheet is used to enter pay pool funding levels, enter a share estimate, select a share value used in the pay pool calculations, and select the method to assign the salary increase portion of the performance payout


CWB – Control Points

The Control Point Worksheet allows you to set two control points per pay schedule and pay band and then apply those control points across a pay pool. Enter the desired control point(s) in the yellow cells corresponding to the pay schedules and pay bands (you don’t have to enter control points for every pay band). This will apply the appropriate control point for each employee in the pay pool based on their pay schedule and pay band. If the pay bands don’t have control points, the control point column for those employees will be blank.


CWB - Objectives

The Objectives tab shows objective information by employee by objective. During the deliberations, the pay pool panel advisor enters any change to the Rating Official’s recommended rating for each applicable objective. The tool calculates the impact on the rating of record and overwrites it into the Pay Pool Panel tab.


CWB – Ratings and Shares

Average Score and Rating fields get calculated from individual objectives ratings; shares are allocated during pay panel deliberations, often based on business rules.


CWB – Pay Pool Panel

The Pay Pool Panel Worksheet has yellow cells that can be edited but white cells are protected and cannot be changed. The spreadsheet information flows left to right. Unused columns can be hidden using the hide feature in the custom menu bar.


CWB - Summary

The Summary tab presets the pay pool’s information in a print-ready format.


CWB - Statistics

The Statistics worksheet displays the average rating, average shares, number of employees, number of employees already rated, and number of employees who have been assigned shares for each rating official and sub-pool.


CWB – Rating Charts

The rating charts provide a bar chart showing the rating distribution of the pay pool.


CWB – Share Charts

The rating charts provide a bar chart showing the shares distribution of the pay pool.


CWB – Combo Charts

The combo chart provides a bar chart showing the percentage of

employees in each pay band that received each rating or share.

APPENDIX


Success Guides

• Examples of Business rules

• Guidelines for Pay Pool Meetings – Employee Assessments

• Guidelines for Pay Pool Meetings – Pay Pool Administrators

• Guidelines for Pay Pool Meetings – Rating Official Assessments

• Additional Guidance for Rating Officials

• Pay Pool Meeting – Overview

• Sample Job Objectives

• Prep Checklist Example

• Non-Disclosure Statement Form

[new window]

Business

rate range

delimited

process rate

process monitor

organizational

bar chart

expected benchmark

pay pool structure