[Federal Register Volume 65, Number 48 (Friday, March 10, 2000)]
[Notices]
[Pages 13170-13189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-5589]



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Part III





Department of the Interior





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Bureau of Indian Affairs



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Higher Education Workforce Project; Notice

  Federal Register/Vol. 65, No. 48/Friday, March 10, 2000/Notices  

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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs


Higher Education Workforce Project

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Notice of Intent to Implement Demonstration Project.

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SUMMARY: The Bureau of Indian Affairs is announcing the intent to 
implement a demonstration project. Public Law 105-337, Haskell Indian 
Nations University (HINU) and Southwestern Indian Polytechnic Institute 
(SIPI) Administrative Systems Act of 1998, Oct. 31, 1998, allows HINU 
to conduct a demonstration project to test the feasibility and 
desirability of new personnel management policies and procedures.

DATES: Implementation of this demonstration project will begin on 
October 1, 2000. To be considered, written comments must be submitted 
on or before April 10, 2000: an informal public hearing will be 
scheduled as follows: April 24, 2000 10 a.m. to 12 Noon in Lawrence, 
Kansas. At the hearing, parties may present their comments on the 
project. However, anyone wishing to testify should contact the person 
listed under the FOR FURTHER INFORMATION CONTACT section, so that HINU 
can plan the hearing and provide sufficient time for all parties to be 
heard. Priority will be given to those on the schedule, with others 
speaking during any remaining time. Each speaker will be limited to 10 
minutes. Written comments may be submitted to supplement oral testimony 
during the public comment period.

ADDRESSES: You may send comments to Eddie Lehman, Haskell Indian 
Nations University, Office of the President, Lawrence, Kansas, 66046; 
e-mail address: [email protected].
    A public hearing will be held at the following location: Lawrence, 
Kansas--Haskell Indian Nations University, Haskell Auditorium, 155 
Indian Ave., Lawrence Kansas 66046.

FOR FURTHER INFORMATION CONTACT: On proposed demonstration project and 
public hearings: Eddie Lehman, Haskell Indian Nations University, 
Lawrence, Kansas 66046, 785-749-8407; e-mail address: 
[email protected].

SUPPLEMENTARY INFORMATION: Public Law 105-337 finds that the provision 
of culturally sensitive curricula for higher education programs at 
Haskell Indian Nations University is consistent with the commitment of 
the Federal Government to the fulfillment of treaty obligations to 
Indian tribes through the principle of self-determination and the use 
of Federal resources. It further finds that giving a greater degree of 
autonomy to the institution while maintaining it as an integral part of 
the Bureau of Indian Affairs will facilitate the transition of Haskell 
Indian Nations University to a 4-year university.
    This notice is published in accordance with authority delegated by 
the Secretary of the Interior to the Assistant Secretary--Indian 
Affairs by 209 DM 8.

    Dated: March 2, 2000.
Kevin Gover,
Assistant Secretary--Indian Affairs.

Table of Contents

I. Executive Summary
II. Introduction
    A. Purpose
    B. Problems with the Present System
    C. Changes Required/Expected Benefits
    D. Participating Institutions
    E. Participating Employees
    F. Bargaining Requirements
    G. Project Design
III. Personnel System Changes
    A. Hiring and Appointment Authorities
    B. Broad banding
    C. Classification
    D. Contribution-Based Compensation and Assessment System
    E. Special Situations Related to Pay
    F. Revised Reduction-In-Force (RIF) Procedures
    G. Academic Degree and Certificate Training
    H. Sabbaticals
IV. Training
    A. Supervisors
    B. Administrative Staff
    C. Employees
V. Conversion
    A. Conversion to the Demonstration project
    B. Conversion Back to the Former System
VI. Project Duration
VII. Evaluation Plan
VIII. Demonstration Project Costs
    A. Step and Promotion Buy-Ins
    B. Out-Year Project Costs
    C. Personnel Policy Boards
    D. Developmental Costs
IX. Required Waivers to Law and Regulations
    A. Waivers to title 5, United States Code
    B. Waivers to title 5, Code of Federal Regulations

I. Executive Summary

    The project was designed by an Alternative Personnel System (APS) 
Team, under the authority of the Interim President of HINU and the 
Office of Indian Education Programs, Bureau of Indian Affairs. There 
are three major areas of change: (a) Institution-controlled rapid 
hiring; (b) a contribution-based compensation system; (c) and a 
simplified assignment process. The project will cover all employees at 
HINU. The Department of Interior will perform extensive evaluation of 
the project.

II. Introduction

A. Purpose

    The purpose of the project is to demonstrate that greater 
managerial control over personnel processes and functions at the 
worksite can enhance the effectiveness of a higher education workforce 
and, at the same time, expand the opportunities available to employees 
through a more responsive personnel system. This demonstration project 
will provide managers at the lowest practical level the authority, 
control, and the flexibility they need to provide quality educational 
opportunities for American Indian students. This project not only 
provides a system that recognizes, rewards, and retains employees for 
their contribution, but it also supports their personal and 
professional growth.

B. Problems With the Present System

    Haskell Indian Nations University, a Federal higher education 
institution, provides post-secondary education to Native American 
students from across the United States. To do this effectively and 
efficiently, the institution must employ top-quality faculty, 
administrators, support staff, and technical/specialist workforce. The 
current personnel system must be re-engineered to provide incentives 
and rewards to employees who exhibit characteristics of educational 
mastery, enthusiasm, and innovation, and who increase their 
contribution to the higher education mission accordingly. Hiring 
restrictions and overly complex job classifications unduly exhaust 
valuable resources (staff, time, and budget), and unnecessarily detract 
attention from the institution's educational mission. Managers must be 
able to compete with the private sector for the best talent and be able 
to make timely and competitive job offers to potential employees. Those 
same managers need the tools to reward employees for continuing 
excellence so that the higher education system reflects a quality 
workforce. The current personnel system does not provide an environment 
that motivates employees to continue to increase their contribution to 
the institution and its mission. A contribution-based compensation 
system will help managers acquire motivational tools and provide a 
forum in which to apply them. The higher education process is 
continually changing and depends on shared expertise of a highly 
educated faculty and staff; therefore, managers can implement most 
effective strategies through local control of positions and

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their classification. Managers need the ability to move employees 
freely within their institution to meet the educational mission and to 
provide developmental opportunities for employees. Managers at present 
have only limited tools to shape the workforce to ensure continued 
growth of new ideas, strategies, and state-of-the-art skills for the 
21st century.
    The inflexibility of many of today's personnel processes and the 
diffused authority, accountability, and approval chains throughout the 
system result in a workforce that cannot posture itself for a rapidly 
changing technological and academic environment. This demonstration is 
designed (1) to provide an encouraging environment that promotes the 
growth of all employees; and (2) to improve the local higher education 
manager's ability and authority to manage the workforce effectively.

C. Changes Required/Expected Benefits

    This project will demonstrate that a human resources' system 
tailored to the mission and needs of a higher education institution 
will result in: (a) Increased quality in the higher education workforce 
and the educational outcomes produced; (b) increased timeliness of key 
personnel processes, especially hiring; (c) increased retention rates 
of ``excellent contributors'' and separation rates of ``poor 
contributors'; (d) increased satisfaction of institutional customers 
with the higher education process and its outcome; and (e) increased 
satisfaction with the personnel management system by customers/
students, employees and tribal communities.
    The Higher Education Workforce Project (HEWP) builds on the 
features of demonstration projects at the Department of Defense 
Acquisition, Air Force Research Laboratory, Department of the Navy 
(China Lake), and National Institute of Standards and Technology 
(NIST). The long-standing Department of the Navy (China Lake) and NIST 
demonstration projects have produced impressive statistics on job 
satisfaction for their employees versus that for the Federal workforce 
in general. Therefore, in addition to the expected benefits mentioned 
above, it is anticipated that the HEWP will result in more satisfied 
employees as a consequence of the proposed demonstration project's 
hiring procedures, classification accuracy, pay equity, and fairness of 
performance management. A full range of measures will be collected 
during project evaluation.

D. Participating Institutions

    The Higher Education Workforce Project (HEWP) will cover Haskell 
Indian Nations University, an institution of higher education of the 
Department of the Interior, Bureau of Indian Affairs. HINU is located 
in Lawrence, Kansas.

E. Participating Employees

    In determining the scope of the demonstration project, primary 
consideration was given to the number and diversity of occupations 
within the Higher Education Workforce Project, which includes 
professional employees and the supporting personnel. The project 
provides for adequate development and testing of the Contribution-based 
Compensation and Assessment System (CCAS). The intent of this project 
is to provide the institution with increased control and accountability 
for the covered workforce. Therefore, the decision was made to include 
all General Schedule (GS) and Wage Grade System (WG) positions. 
Employees covered under the Performance Management and Recognition 
System Termination Act (pay plan code GM) are General Schedule 
employees and are covered under the demonstration project.

F. Bargaining Units

    Of the 207 HINU employees, all except managerial employees are 
under union representation by the National Federation of Federal 
Employees union and are covered by a negotiated National Agreement. At 
the time of publishing the Indian Educators Federation union had been 
certified as the bargaining unit, but the certification had not become 
effective because of appeals by NFFE. The recent NFFE agreement will be 
recognized as the applicable agreement until such time as the appeal 
process is completed; a union is identified as the representative; and/
or a new agreement is reached in accordance with the specific 
requirements under Public Law 105-337. All applicants for employment 
with, all eligibles and employees of, and all positions in or under 
HINU shall be included in this demonstration project. Any collective-
bargaining agreement in effect on the day before this demonstration 
project commences shall continue to be recognized by HINU until such 
date of a new negotiated agreement, as may be determined by mutual 
agreement of the parties.

G. Project Design

    In 1996, after several years of planning and research, HINU 
submitted legislation to Congress for developing a different higher 
education personnel system. In 1997 SIPI submitted legislation to 
Congress proposing an alternative personnel system. In 1998, the two 
pieces of legislation were joined due to the similarity of the two 
higher education schools' missions and identification of similar 
problems with acquiring personnel. Public Law 105-337, Oct. 31, 1998, 
authorized each institution to carry out a demonstration project for 
developing a higher education alternative personnel system. A joint 
Steering Committee was established in September 1999 as the governing 
body for the project. Members on the Steering Committee represented 
both institutions and the Office of Indian Education Programs, BIA. An 
Alternative Personnel System Team was established in October 1999, made 
up of employees from SIPI and HINU to design and develop the 
demonstration project that would test a new personnel system for use at 
SIPI and HINU. The APS team presented recommendations for a new system 
to the Steering Committee in December 1999 for approval. BIA, OIEP 
subsequently determined that the two institutions could develop 
individual alternative personnel systems and the Steering Committee was 
disbanded. HINU continued to use its APS team to design this project. 
The APS team developed an alternative personnel system that represents 
sweeping changes in the entire spectrum of human resources management 
for HINU. Several of the initiatives are designed to assist the 
institution in hiring the best people to fulfill mission requirements. 
Others focus on developing, motivating, and equitably compensating 
employees based on their contribution to the mission. Initiatives to 
effectively manage workforce turnover and maintain institutional 
excellence were also developed.
    Public Law 105-337 authorizes HINU to test alternative benefits 
systems. Though no changes have been made to the existing benefits 
systems in this publication, HINU reserves the right to test 
alternative benefits systems in the future in accordance with the 
provisions of Public Law 105-337.

A. Hiring and Appointment Authorities

1. Simplified, Accelerated Hiring
    The complexity of the current system and various hiring 
restrictions create delays; hamper management's ability to hire, 
develop, realign, and retain a quality workforce that is reflective of 
the institution's mission statement; and inhibit a quick response to 
the technological, economic and

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educational needs of tribal communities. Line managers, departmental 
and divisional managers find the complexity limiting as they attempt to 
accomplish timely recruitment of needed personnel with appropriate 
knowledge and skills. To compete with the private sector and 
institutions of higher learning for the best talent available and be 
able to make expeditious job offers, managers need a process that is 
streamlined and easy to administer. In order to create a human 
resources management system that facilitates meeting HINU's mission and 
institutional excellence, this demonstration project will respond to 
today's dynamic environment by obtaining, developing, motivating, and 
retaining high-performing employees. The project will provide a 
flexible system that can restructure or renew the workforce quickly to 
meet diverse mission needs, respond to workload needs, and contribute 
to quality educational infrastructure.
    Specifically, this part of the demonstration project will provide 
simplified, accelerated hiring of quality personnel by providing HINU 
full authority to appoint individuals to positions. Appropriate 
recruitment methods and resources will include those that are likely to 
yield quality candidates with the knowledge, skills, and abilities 
necessary to perform the duties of the position.
(a) Delegated Examining Authority
    This demonstration project establishes a streamlined applicant 
examining process. This process will be used to fill all positions at 
HINU. Basic eligibility factors will be determined, using any and all 
available resources, linking applicants' knowledge, skills, and 
abilities to those required in each position. Minimum eligibility 
requirements will be those at the lowest equivalent GS or WG grade of 
the appropriate broadband level. Selective placement factors may be 
established when judged to be critical to successful job performance. 
These factors will be determined by the HINU selecting officials and 
communicated to applicants for basic eligibility. Qualified candidates 
who meet the basic ``minimum'' qualifications will be further evaluated 
based on Knowledge, Skills, and Abilities that are directly linked to 
the position(s) to be filled. Applicants who meet Indian Preference 
qualifications will receive preference in hiring. Based on assessment, 
other candidates will receive numerical scores of 70, 80 or 90. No 
intermediate scores will be granted except for those eligibles that are 
entitled to veterans' preference. Veteran's preference eligibles 
meeting basic (minimum) qualifications will receive an additional five 
or ten points (depending on their preference eligibility) added to the 
minimum scores identified above. Applicants will be placed in one of 
the following quality groups based on their numerical score including 
any preference points: Basically Qualified (score of 70 to 79); Highly 
Qualified (score of 80 to 89); or Superior (score of 90 and above). The 
names of veterans' preference eligibles will be entered ahead of others 
having the same numerical score. The names of Indian preference 
eligibles will be placed at the top of the Superior quality group.
    For professional positions at the basic rate of pay equivalent to 
GS-9 and above, applicants will be referred by quality groups in the 
order of the numerical ratings, including any veterans' preference 
points. For all other positions, (i.e., other than professional 
positions at the equivalent of GS-9 and above), veterans' preference 
eligibles with a compensable service-connected disability of ten 
percent or more who meet basic (minimum) eligibility will be listed at 
the top of the highest group certified.
    For GS-9 academic and administrative positions, hiring committees 
will convene to review the applications on the certification list. In 
accordance with academic procedures, hiring committees will recommend a 
ranked preference list to the hiring officials.
    All applicants in the highest group will be certified. If there is 
an insufficient number of applicants in the highest group, applicants 
in the next lower group may then be certified; should this process not 
yield a sufficient number, groups will be certified sequentially until 
a selection is made or the qualified pool is exhausted. When two or 
more groups are certified, applicants will be identified by quality 
group (i.e., Superior, Highly Qualified, Basically Qualified) in the 
order of their numerical scores. Indian preference eligibles will be 
placed at the top of the Superior group. Passing over any veteran's 
preference eligible(s) to select a non-preference eligible requires 
approval under current pass-over or objection procedures.
    The on-site Personnel Director will serve as a consultant during 
the hiring process, overseeing Indian and veterans' preference, timely 
processing of paperwork, and other procedures that ensure lawful and 
equitable procedures for all applicants. The hiring process will 
reflect the merit principles.
(b) Scholastic Achievement Appointment
    This demonstration project establishes a Scholastic Achievement 
Appointment that provides the authority to appoint candidates with 
degrees to positions with positive education requirements. Candidates 
may be appointed under this procedure if: (1) They meet the minimum 
standards for the positions as published in OPM's Operating Manual 
``Qualification Standards for General Schedule Positions,'' plus any 
selective factors stated in the vacancy announcement; (2) the 
occupation has a positive education requirement; (3) the candidate has 
a cumulative grade point average (GPA) of 3.5 or better (on a 4.0 
scale) in those courses in those fields of study that are specified in 
the Qualification Standards for the occupational series and an overall 
undergraduate GPA of at least 3.0 on a 4.0 scale; and (4) the 
appointment is into a position at a pay level lower than the top step 
of GS-7. Appointments may also be made at the equivalent of GS-9 
through GS-11 on the basis of graduate education and experience, but 
with the requirement of a GPA of at least 3.7 on a scale of 4.0 for 
graduate courses in the field of study required for the occupation. 
Indian preference and veterans' preference procedures will apply when 
selecting candidates under this authority. Preference eligibles who 
meet the above criteria will be considered ahead of non-preference 
eligibles. Passing over any preference eligibles(s) to select a non-
preference eligible requires OPM approval under current objection 
procedures. This authority allows for competitive appointment to 
positions at the broadband level II.
2. Permanent and Contingent Appointment Authorities
    The educational work environment is seriously affected by variable 
workload and mission changes that require flexibility not only in 
workforce numbers but required skills and knowledge. The current 
personnel system is unable to adapt the workforce rapidly to these 
changes. This demonstration project provides a method to adjust the 
workforce as needed. Under this demonstration project there are two 
appointment options: permanent and contingent appointments. The 
permanent appointment replaces the existing career and career-
conditional appointments. The contingent appointment is a new 
appointment authority that is based roughly on the existing term

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appointment to provide flexible hiring practices for HINU. All 
contingent appointments will be temporary. All employees under these 
two appointments will be eligible for benefits under the guidelines of 
the demonstration project, provided the appointment is the duration of 
at least one year. Benefits are the same as those currently afforded 
permanent employees. An academic year is considered equivalent to a 
calendar year for academic appointments.
    Institutions may make a contingent appointment for a period that is 
expected to last up to a year, but not to exceed four years. Reasons 
for making a contingent appointment include, but are not limited to, 
carrying out special project work; staffing new or existing programs of 
limited duration; filling a position in activities undergoing review 
for reduction or closure; and replacing permanent employees who have 
been temporarily assigned to another position, are on extended leave, 
or have entered military service. Selections for contingent 
appointments for less than one year will be non-competitive. Selections 
for contingent appointments of one year or more will be made under 
competitive examining processes. Employees hired under a one-year or 
more, contingent appointment authority are temporary, but may be 
eligible for conversion to permanent appointment. To be converted, the 
employee must (1) have been selected for the 1 year or more contingent 
position under competitive procedures, with the announcement 
specifically stating that the individual(s) selected for the contingent 
position(s) may be eligible for conversion to permanent appointment at 
a later date; (2) must have participated in at least one cycle of the 
contribution-based assessment process; and (3) be selected under merit 
promotion procedures for the permanent position. Service under a 
contingent appointment immediately prior to a permanent appointment may 
be applied toward the probationary period at the discretion of the 
manager, provided contribution is adequate and the permanent position 
is in the same career path as the contingent appointment. The 
institution may place a contingent employee in any other contingent 
position, provided the employee meets the qualifying requirements of 
that position. However, such reassignment will not serve to extend the 
appointment beyond the original contingent appointment time period. 
Professional conversions will require review by appropriate peers. 
Contingent and permanent appointments may be used for part-time and 
full-time purposes. The contingent appointment may not be used to 
replace or substitute for work performed by employees occupying regular 
positions required to perform the mission of the institution, but may 
be used to supplement regular positions work activities.
3. Modified Probationary Period
    For employees in the Professional and Technical/Specialist career 
paths, the current one-year probationary period does not always provide 
managers the time needed to properly assess the contribution and 
conduct of new hires in the higher education environment. New hires may 
be involved in extended training, degree completion and/or educational 
assignments away from their normal institution. A means of extending 
the opportunity for management to review and evaluate the contribution 
and potential of new hires is needed. Expansion of the current one-year 
probationary period affords management better control over the quality 
of employees required to meet mission needs and provide sufficient 
opportunity to evaluate contribution during the beginning of a career. 
Permanent employees will fulfill a maximum of three years probation 
that may be decreased to not less than one year. All newly hired 
employees may be subject to an extension of their probationary period 
equal to the length of any educational/training assignment that places 
the employee outside normal supervisory review. The modified 
probationary period applies to new hires or those who do not have 
reemployment or reinstatement eligibility. Aside from extending the 
probationary period, all other features of the current probationary 
period are retained. Probationary employees will be terminated when 
they fail to demonstrate proper conduct, technical competency, and/or 
adequate contribution for continued employment. When a supervisor 
decides to terminate an employee serving a probationary period because 
his/her work contribution or conduct during that period fails to 
demonstrate fitness or qualifications for continue employment, the 
supervisor shall terminate the employee's services by written 
notification thirty days prior to the effective date of the action. 
Probationary employees will receive all the benefits of the non-
probationary permanent employees, with the exception that they may be 
separated without due cause. After fulfilling the probationary 
requirements, an employee will not be separated without full 
substantive and procedural rights.
4. Voluntary Emeritus Program
    Under the demonstration project, the President of HINU has the 
authority to offer retired or separated individuals voluntary 
assignments in the institution and to accept the gratuitous services of 
those individuals. Voluntary Emeritus Program assignments are not 
considered employment by the Federal Government (except as indicated 
below). Thus, such assignments do not affect an employee's entitlement 
to buy-outs or severance payments based on earlier separation from 
Federal Service. This program may not be used to replace or substitute 
for work performed by employees occupying regular positions required to 
perform the mission of the institution.
    The Voluntary Emeritus Program will ensure continued quality higher 
education by allowing retired employees to retain a presence in the 
HINU education community. Experienced workers will be available to 
enrich the institution's educational mission through mentorships and 
other service.
    To be accepted into the Voluntary Emeritus Program, a volunteer 
must be recommended to the President by one or more HINU education 
managers. No one who applies is entitled to an emeritus position. The 
President must 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 the volunteer is serving in emeritus status. Retired or 
separated Federal employees may accept an emeritus position without a 
``break in service'' or mandatory waiting period.
    Voluntary Emeritus Program volunteers will not be permitted to 
monitor contracts on behalf of the Government but may participate on 
any contract if no conflict of interest exists. The volunteer may be 
required to submit a financial disclosure form annually and will not be 
permitted to participate on any contracts where a conflict of interest 
exists.
    An agreement will be established by the volunteer, the President, 
and the Personnel/Human Resources Office. The agreement must be 
finalized before the assumption of duties and shall include:
    (a) a statement that the service provided is gratuitous, does not 
constitute an appointment in the Civil

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Service, is without compensation or other benefits except as provided 
for in the agreement itself, and that, except as provided in the 
agreement regarding work-related injury compensation, any and all 
claims against the Government because of the service are waived by the 
volunteer;
    (b) a statement that the volunteer will be considered a Federal 
employee for the purposes of:
    (I) Subchapter I of Chapter 81 of Title 5, U.S.C. (using the 
formula established in 10 U.S.C. 1588 for determination of 
compensation) (work-related injury compensation);
    (ii) Chapter 171 of title 28, U.S.C. (tort claims procedure);
    (iii) Section 552a of Title 5, U.S.C. (records maintained on 
individuals); and
    (iv) Chapter 11 of title 18, U.S.C. (conflicts of interest).
    (c) the 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 activity (travel, administrative, 
office space, supplies, etc.);
    (f) a one-page statement of duties and experience; a statement 
specifying that no additional time will be added to a volunteer's 
service credit for such purposes as retirement, severance pay, and 
leave as a result of being a member of the Voluntary Emeritus Program a 
provision allowing either party to void the agreement with ten days' 
written notice and;
    (I) the level of security access required.

B. Broad banding

1. Broadband Levels
    Broad banding system will replace the current General Schedule (GS) 
and Wage Grade structure. Currently, the 15 grades of the General 
Schedule are used to classify positions and, therefore, to set pay. The 
General Schedule covers all white-collar work--administrative, 
technical, clerical, and professional. The Wage Grade System covers all 
blue-collar work -- mechanical, technical, and manual labor.
    Occupations with similar characteristics will be grouped together 
into three career paths with broadband levels designed to facilitate 
pay progression and to allow for more competitive recruitment of 
quality candidates at differing rates. Professional, Technical/
Specialist and Support designate career paths as depicted in TABLE I. 
Competitive promotions will be less frequent, and movement through the 
broadband levels will be a more seamless process than under current 
procedures. Like the broadband systems used at the Department of the 
Navy (China Lake) and the National Institute of Standards and 
Technology (NIST) permanent demonstration projects, advancement within 
the system is contingent on merit.
    There will be five broadband levels in the demonstration project, 
labeled I, II, III, IV, and V. Levels I through IV will include the 
current grades of GS-01 through GS-15. These are the grades in which 
the workforce employees are currently found. Wage grade compensation 
levels were converted to GS grade, then the GS grades was used in 
setting the upper and lower dollar limits of the broadband levels; 
however, once the employees are moved into the demonstration project, 
GS and WG grades will no longer apply. Broadband level V is reserved 
for the position of President of HINU and is limited by compensation 
equivalent to Executive Level III. The three career paths and their 
associated broadband levels are shown in TABLE I.

BILLING CODE 4310-02-P
[GRAPHIC][TIFF OMITTED]TN10MR00.019

BILLING CODE 4310-02-C
    Generally, employees will be converted into the broadband level 
that includes their permanent GS and WG grade of record. Each employee 
is assured an initial place in the system without loss of pay. As the 
rates of the General Schedule and/or Executive Schedule are increased 
due to general pay increases, the minimum and maximum rates of the 
broadband levels will also move up. Individual employees receive pay 
increases based on their assessments under the Contribution-based 
Compensation and Assessment System (CCAS). Since pay progression 
through the levels depends on contribution, there will be no scheduled 
within-grade increases (WGIs) or scheduled general pay increases for 
employees once the Broad banding system is in place. Currently no 
special salary rates are in effect at HINU. However, if a position is 
created that falls under a special salary rate, that rate will be 
converted to a broadband level comparable to the special salary rate 
and that special salary rate will no longer be applicable to the 
demonstration project employee.

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Employees will receive the locality pay of their geographical area.
    Newly hired personnel entering the system will be employed at a 
level consistent with the expected basic qualifications for the level, 
as determined by rating against qualification standards. Salaries of 
individual candidates will be based on academic qualifications and/or 
work experience. The hiring official will determine the starting salary 
based upon available labor market considerations relative to special 
qualifications requirements, scarcity of qualified applicants, 
programmatic urgency, and education/experience of the new candidates. 
In addition to the flexibility available under the Broad banding 
system, the authorities for retention, recruitment, and relocation 
payments granted under the Federal Employees' Pay Comparability Act of 
1990 (FEPCA) can also be used.
    The use of Broad banding provides a stronger link between pay and 
contribution to the mission of the institutions. It is simpler, less 
time consuming, and less costly to maintain. In addition, such a system 
is more easily understood by managers and employees, is easily 
delegated to managers, coincides with recognized career paths, and 
complements the other personnel management aspects of the demonstration 
project.
2. Simplified Assignment Process
    Today's environment of downsizing and workforce transition mandates 
that the institution has maximum flexibility to assign individuals. 
Broad banding enables the institution to have the maximum flexibility 
to assign an employee within broad descriptions, consistent with the 
needs of the institutions and the individual's qualifications. 
Assignments may be accomplished as realignments and do not constitute a 
position change. 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 
institution consistent with that individual's qualifications. This 
flexibility allows broader latitude in assignments and further 
streamlines the administrative process and system.

C. Classification

1. Occupational Series
    The present General Schedule classification system has 434 
occupational series that are divided into 22 occupational groups. The 
present Federal Wage classification system has 39 key ranking jobs. The 
HEWP currently covers numerous series and key ranking jobs in the 22 
occupational groups and Federal Wage System. These occupational series 
and key ranking jobs will be maintained throughout the demonstration 
project.
2. Classification Standards
    The present system of OPM classification standards will be used for 
identification of proper series and occupational titles of positions 
within the demonstration project. References in the position 
classification standards to grade criteria will not be used as part of 
the demonstration project. Rather, the CCAS broadband level factors, as 
aligned in the three career paths, will be used for the purpose of 
broadband level determination. Under the demonstration project, each 
broadband level will be represented by a set of descriptors.
3. Classification Authority
    Under the HEWP, the President (or equivalent) will have delegated 
classification authority and may re-delegate this authority to 
subordinate management levels. Re-delegated classification approval 
must be exercised at least one management level above the first-line 
supervisor of the position under review, except in the case of those 
employees reporting directly to the president or equivalent. First-line 
supervisors will provide classification recommendations. The Personnel 
Director will provide on-going consultation and guidance to managers 
and supervisors throughout he classification process.
4. Statement of Duties and Requirements
    Under the demonstration project's classification system, a new 
statement of duties and requirements (SDR) will replace the current 
position description. The SDR will combine the position information, 
staffing requirements, and contribution expectations into a single 
document. The new SDR will include a description of job-specific 
information, reference the CCAS broadband level descriptors for the 
assigned broadband level, and provide other information pertinent to 
the job. Supervisors may use a computer-assisted process to produce the 
SDR. The objectives in developing the new SDR are to: (a) Simplify the 
descriptions and the preparation process through automation; (b) 
provide more flexibility in work assignments; and `` provide a more 
useful tool for other functions of personnel management, e.g., 
recruitment, assessment of contribution, employee development, and 
reduction in force.
5. Fair Labor Standards Act
    Fair Labor Standards Act (FLSA) exemption or non-exemption 
determinations will be made consistent with criteria found in 5 CFR 
(Code of Federal Regulations) part 551.
    All employees are covered by the FLSA unless they meet criteria for 
exemption. Positions will be evaluated as needed by comparing the 
duties and responsibilities assigned the broadband level descriptors 
for each broadband level, and the 5 CFR part 551 FLSA criteria.
6. Classification Appeals
    An employee may appeal the occupational series, title, or broadband 
level of his/her own position at any time. An employee must formally 
raise the areas of concern to supervisors in the immediate chain of 
command, either verbally or in writing. If an employee is not satisfied 
with the supervisory response, he or she may then appeal to the Haskell 
Classification Appeals Panel. Time periods for case processing under 5 
CFR 511.605 apply.
    An employee may not appeal the accuracy of the SDR document, the 
demonstration project classification criteria, or the pay-setting 
criteria; the propriety of a salary schedule; or matters grievable 
under an administrative or negotiated grievance procedure or an 
alternative dispute resolution procedure.
    The evaluation of classification appeals under this demonstration 
project is based upon the demonstration project classification 
criteria. Case files will be forwarded for adjudication through the 
personnel/human resources office and will include copies of appropriate 
demonstration project criteria.

D. Contribution-Based Compensation and Assessment System

1. Overview
    The purpose of the Contribution-based Compensation and Assessment 
System (CCAS) is to provide an equitable and flexible method for 
assessing and compensating the higher education workforce. CCAS allows 
for more employee involvement in the performance assessment process, 
increases communication between supervisors and employees, promotes a 
clear accountability of contribution by each employee, facilitates 
employee progression tied to institutional contribution, and provides 
an understandable basis for salary changes.

[[Page 13176]]

    CCAS goes beyond a performance-based rating system. It measures the 
employee's contribution to the mission and goals of the institution, 
rather than how well the employee performed a job as defined by a 
performance plan. Past experience with the existing performance 
appraisal system indicates that performance plans are often tailored to 
the individual's level of previous performance. Hence, an employee may 
have been rewarded by salary step increases for accomplishing a 
satisfactory level of performance against a diminishing set of 
responsibilities. CCAS promotes salary adjustment decisions made on the 
basis of an individual's overall annual contribution when compared to 
all other employees and level of compensation. Therefore, larger-than-
average salary increases are possible for employees who are determined 
to be ``under compensated--below the rails'' and smaller-than-average 
increases are permitted for employees who are deemed to be ``over 
compensated--above the rails'' in relationship to their institutional 
contributions.
    An employee's performance is a synthesis of contributions that 
determines the overall contribution score (OCS). Contribution is 
measured by using a set of six factors, each of which is relevant to 
the success of the educational institution. The description for each 
factor will have five levels. Criteria for achieving these levels will 
be determined by each organizational unit, such as an academic 
department, within the school. Taken together, these factors capture 
the critical content of jobs in each career path. The factors may not 
be modified or supplemented. These factors are the same as those used 
to classify a position at the appropriate broadband level. Variable 
weights may be applied to the six factors for different job categories.
    The total compensation or pay system is an important indicator of 
what an organization believes is important to its success. A well-
designed compensation system provides a battery of tools to support 
organizational goals and outcomes. The design should be strategic, 
flexible, and customer-focused. The current compensation system, 
because it was implemented in a piecemeal fashion for a hierarchical 
organization, does not relate to educational needs and is cumbersome. 
The demonstration project will test a compensation system that is able 
to change based on the needs of the entire organization, of the 
taxpayer, and of the student being served.
    Employees in all five broadband levels will have the same factors, 
with applications relevant to the SDR. The six factors are: (1) Primary 
Duty and Requirements (defined in the SDR); (2) Customer/Student 
Service; (3) Department and Institutional Service; (4) Teamwork/
Supervision; (5) Professional Development Activity; (6) Communications/
Research and Publications. These factors were chosen for assessing the 
yearly contribution of HINU employees in the three career paths (1) 
Professional, (2) Technical/Specialist, and (3) Support. Each factor 
has multiple levels of increasing contribution corresponding to the 
broadband levels within the relevant career paths. These levels will be 
delineated in the Operations Manual.
    Factor 1: Primary Duty and Requirements refers to the activities 
that relate to the position description title, such as ``Carpenter'' 
relating to levels of achievement of carpenter duties; or 
``Instructor'' relating to achievement of levels related to classroom 
instruction. The individual factor will relate to the activity 
described by the title.
    Factor 2: Customer/Student Service pertains to activities that 
relate to direct and indirect contact with customers/students, and will 
cover areas related to advising, tutoring, mentoring, club sponsorship, 
and other activities that serve the students outside the classroom.
    Factor 3: Departmental and Institutional Service refers to 
committee work, curriculum development, institutional programs 
(graduation, powwows), public presentations, academic lectures, and 
other activities that contribute to the worker's organizational unit 
and the institution as a whole.
    Factor 4: Teamwork/Supervision refers to non-managerial employees 
(Teamwork) or managers (Supervision and Teamwork). Teamwork is a factor 
that describes any worker's contribution to the mission and goals of 
the organizational unit, through interactions with other employees. 
Additional managerial criteria includes supervision of workers. 
Management of resources is also part of this factor for supervisors.
    Factor 5: Professional Development Activity refers to any training, 
academic course work, instructional conferences, or activity that 
contributes to the employee's ability to perform duties for the benefit 
of the institution of higher learning.
    Factor 6: Communications/Research and Publications refers to 
ability to communicate, both receiving and transmitting information, in 
the workplace, through meetings, written documentation, electronic 
tools, and other appropriate means. Research and Publication refers to 
researching relevant sources for curriculum and instructional topic 
area purposes, and in some cases publishing the results of research.
2. Normal Pay Range (NPR)
    The Contribution-based Compensation and Assessment System (CCAS) 
pay schedule provides a direct link between increasing levels of 
contribution and increasing salary. This is shown by the graph in 
Figure 1. The horizontal axis spans from 0 to the maximum overall 
contribution score (OCS) of 100, with a notional ``very high'' score of 
115 for those employees who are capped at the top of their broadband 
level. The vertical axis spans from zero dollars to the dollar 
equivalent of Executive Schedule Level III. With the exception of the 
president's pay rate, this range encompasses the full salary (excluding 
locality pay) paid under this demonstration, from GS-1, step 1, through 
GS-15, step 10, for Calendar Year 2000 (CY00). The president's position 
is currently a GS-14/15. The salary range for the president's position 
has been extended to Executive Service Level III. The president's 
salary is the only salary that may increase beyond GS-15 step 10. Each 
year the rails for the NPR are adjusted upward on the general pay 
increase under 5 U.S.C. 5303.) The area between the upper and lower 
rail is considered the normal pay range (NPR). Employees whose annual 
overall contribution score (OCS) plotted against their base salary 
falls on or within the rails are considered ``appropriately 
compensated.'' Employees whose salaries fall below the NPR for their 
overall contribution score (OCS) are considered ``under compensated--
below the rails (B),'' and those falling above the NPR are considered 
``overcompensated--above the rails (A).'' The goal of CCAS is to make 
pay consistent with employees' contributions to the HINU mission.

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    The NPR was established using the following parameters:
    1. The lowest possible score is an OCS score of 0, which equates to 
the lowest base salary paid under this demonstration, GS-1, step 1.
    2. The OCS of 100 equates to the highest base salary paid employees 
under the president, GS-15, step 10. A ``very high'' score of 115 may 
be awarded for employees in the Professional Career Path. There is not 
a point range in the ``very high'' category; 115 points are awarded or 
the individual is not rated ``very high''. The same is true for the 
other two career paths: Technical/Specialist with a ``very high'' score 
of 95; Support with a ``very high'' score of 70.
    3. Changes in OCS correspond to a constant percentage change in 
salary along the rails.
    4. The upper and lower rails encompass an area of 4.0 
OCS points or 8.0 percent in terms of salary, relative to 
the points established in parameters 1 and 2, above.
    Given these constraints, the formulae for the rails found in Figure 
1 are:
    Salary upper rail = (GS-1 Step 1)*(1.0800)*(1.020043)) OCS;
    Salary lower rail = (GS-1 Step 1)*(0.9200)*(1.020043)) OCS.
    Formula results were normalized using a 100 point scale. The pay 
schedule and the NPR are the same for all the career paths. What varies 
among the career paths are the beginnings and endings of the broadband 
levels. The minimum and maximum numerical OCS values and associated 
base salaries for each broadband level by career path are provided in 
TABLE II. These minimum and maximum breakpoints represent the lowest 
and highest General Schedule (GS) salary rate for the grades banded 
together and, therefore, the minimum and maximum salaries possible for 
each level. Each year, the rails for the NPR are adjusted based on the 
General Schedule pay increase granted to the Federal workforce.
    Employees will enter the demonstration project without a loss of 
pay and without a CCAS score. The first CCAS score will result from the 
first annual CCAS assessment process. Until then, no employee is 
inappropriately compensated. Employees, however, may determine their 
expect contribution range by locating the intersection of their salary 
with the rails of the NPR. Future CCAS assessments may alter an 
employee's position relative to these rails.

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BILLING CODE 4310-02-C
    The pay schedule and the NPR are the same for all the career paths. 
What varies among the career paths are the beginnings and endings of 
the broadband levels. The minimum and maximum numerical OCS values and 
associated base salaries for each broadband level by career path are 
provided in TABLE II. These minimum and maximum breakpoints represent 
the lowest and highest General Schedule (GS), Wage Grade (WG), and 
Executive Level III salary rates for the grades banded together and, 
therefore, the minimum and maximum salaries possible for each level. 
Locality salary adjustments are not included in the NPR but are 
incorporated in the demonstration participants' pay.
    Employees will enter the demonstration project without a loss of 
pay (see section V, Conversion) and without a CCAS score, or OCS. The 
first CCAS score will result from the first annual CCAS assessment 
process. Until the first CCAS assessment process is completed no 
employee is over or under compensated. However, employees may determine 
their expected contribution range by locating the intersection of their 
salary with the rails of the NPR. Future CCAS assessments may alter an 
employee's position relative to these rails.
3. CCAS Assessment Process
    The annual CCAS assessment cycle begins on August 1 and ends on 
July 30 of the following year, with the exception of the first year of 
the demonstration project, which will begin at the project's inception 
on October 1, 2000, and end July 30, 2001. At the beginning of the 
annual assessment cycle, the broadband level descriptors will be 
provided to employees so that they know the basis on which their 
contribution will be assessed for their pay pool. (A pay pool is a 
group of employees among whom the CCAS dollars are calculated and 
distributed. The President of the institution determines the pay pool 
structure (see Section III D 04). At that time, employees will be 
advised that all factors are critical and weights will be established, 
if appropriate. Key terms will be defined or clarified. Supervisor and 
employee discussion of specific work assignments, standards, 
objectives, and the employee's contributions within the CCAS framework 
should be conducted on an ongoing basis.
    Near the end of the annual (August 1 to July 30) assessment cycle, 
the immediate supervisor (rating official) meets with employees, 
requesting them to summarize their contributions for each factor. They 
will complete the rating of individual employees by September 30.
    From employees' inputs and his/her own knowledge from all available 
sources, the rating official identifies for each employee the 
appropriate contribution level (1, 2, 3, 4, or 5) for each factor.
    HINU will establish a performance feedback system using a 360-
degree feedback process. The system will use 360-degree feedback from: 
(a) An employee's manager, (b) peers, and (c) customers. Performance 
feedback will provide all employees with information on their 
contribution to the

[[Page 13179]]

organization's performance. It will also help them identify their 
training and developmental needs for the yearly cycle by pinpointing 
areas of strength and items needing improvement. This information 
contributes to Learning Contracts. Every employee will have a Learning 
Contract that will consider needs identified by employee development 
measures, the performance feedback system, and a certification/ 
recertification system.
    The results of the 360-degree performance feedback will go only to 
the employee, with group or area results being summarized for the 
manager. In areas with a single employee, the results will be provided 
to the manager. If an employee appeals his/her rating, the employee may 
use 360-degree supporting information in the appeal of the original 
assessment. Training in the use of the performance feedback system will 
be provided to all employees.
    The rating officials within each pay pool (including second-level 
supervisors) meet together to ensure consistency and equity of the 
contribution assessments. Then the rating officials calculate the final 
overall contribution score (OCS) and inform employees of OCSs by 
October 30. Payout occurs the first full pay period of January. The 
project's first payout will be the first full pay period of January 
2002.
    To determine the OCS, numerical values are assigned based on the 
contribution levels of individuals, using the ranges shown in TABLE II. 
Generally, the OCS is calculated by averaging the numerical values 
assigned for each of the six factors. (All OCS values will be rounded 
to the nearest whole number.) However, at the discretion of the rating 
official, different weights may be applied to the factors to produce a 
weighted average, provided that the weights are applied uniformly 
across the pay pool and employees are advised in advance, i.e., at the 
beginning of the rating period. Weighting may not result in any factor 
becoming zero.
    The rating officials (including second-level supervisors) meet 
again to review the OCS for all employees, correcting any 
inconsistencies identified and making the appropriate adjustments in 
the factor assessments, and placing the employees in rank order.
    The pay pool panel (pay pool manager and the rating officials in 
the pay pool who report directly to him/her) conducts a final review of 
the OCS and the recommended compensation adjustments for pay pool 
members. The pay pool panel has the authority to make OCS adjustments, 
after discussion with the initial rating officials, to ensure equity 
and consistency in the ranking of all employees. Final approval of OCS 
rests with the pay pool manager. The OCS approved by the pay pool 
manager becomes the final OCS. Rating officials will communicate the 
factor scores and OCS to each employee and discuss the results by 
November 30.
    If on August 1, the employee has served under CCAS for less than 
six months, the rating official will wait for the subsequent annual 
cycle to assess the employee. The first CCAS assessment must be 
rendered within 18 months after entering the demonstration project.
    When an employee cannot be evaluated readily by the normal CCAS 
assessment process due to special circumstances that take the 
individual away from normal duties or duty station (e.g., long-term 
full-time training, active military duty, extended sick leave, leave 
without pay, union activities, etc.), the rating official will document 
the special circumstances on the assessment form. The rating official 
will then determine which of the following options to use:
    (a) Re-certify the employee's last OCS; or
    (b) Presume the employee is contributing consistently with his/her 
pay level and will be given minimally the full general increase.
    Pay adjustments will be made on the basis of the CCAS assessment 
(OCS) or substitute determination and the employee's rate of basic pay. 
Pay adjustments are subject to payout rules discussed in section III D 
4. Final pay determinations will be made by the pay pool manager. CCAS 
scores can only be adjusted after discussion with the rating official.
    Pay adjustments will be documented by SF-50, Notification of 
Personnel Action. For historical evaluation and analytical purposes, 
dates on the effective date of CCAS assessments, actual assessment 
scores, the actual salary increases, amounts contributed to the pay 
pool, and applicable ``bonus'' amounts will be maintained for each 
demonstration project employee.
4. Pay Pools
    The pay pool structure and allocated funds are under the authority 
of the President of HINU. The following minimal guidelines will apply 
to pay pool determinations: (a) A pay pool(s) is based on the 
institution's organizational structure and should include a range of 
salaries and contribution levels; (b) a pay pool must be large enough 
to include a second level of supervision, since the CCAS process uses a 
group of supervisors in the pay pool to determine OCS and recommended 
salary adjustments; and--neither the pay pool manager nor the 
supervisors within a pay pool will recommend or set their own 
individual pay levels.
    The amount of money available in the pay pool fund is determined by 
(1) the amount of the annual general pay increase (G): And an Incentive 
amount (I), made up of money that would have been available for quality 
step increases, within grade in creases, promotions between grades 
encompassed in the same broadband level, and other appropriate factors. 
The amount of I will be determined each year by the President, and will 
be 2.4 percent for the first year. The amount of I may be adjusted as 
necessary each year to maintain cost discipline. The dollar amount of I 
will be computed each year based on a percentage of the base pay. 
Salaries of employees in the pay pool as of September 30. Though not 
all funds within a pay pool must be distributed each year as pay or 
bonuses a pool of funds are to be set aside for pay purposes and may 
not be used for other purposes before annual pay calculations are made.
5. Salary Adjustment Guidelines
    After the initial conversion into the CCAS, employees' yearly 
contributions will be determined by the CCAS process described above, 
and their overall contribution scores versus their current rate of 
basic pay will be plotted on a graph along with the NPR. Refer back to 
Figure 1. The position of those points relative to the upper and lower 
rails of the NPR gives a measure of the employee's compensation 
(salary) versus contribution (OCS). Employees fall into one of three 
categories: Overcompensated--above the upper rail; appropriately 
compensated--between the rails; or inappropriately compensated--below 
the lower rail. Depending on the category into which an employee falls, 
he/she may be eligible for up to three forms of additional 
compensation. The pay pool panel has the option of awarding the 
employee up to the full general pay increase (as authorized by Congress 
and the President), a contribution rating increase (an increase in base 
salary), and/or a contribution award (a lump-sum payment that does not 
affect base salary). Employees on retained rate in the demonstration 
plan will receive pay adjustments in accordance with 5 U.S.C. 5363 and 
5 CFR part 536. An employee receiving a retained rate is not eligible 
for a contribution rating increase, since such increases are limited by 
the maximum salary rate for the employee's broadband level.

[[Page 13180]]

    An employee designated as overcompensated, above-the-upper-rail, 
could have his/her general pay increase reduced or denied and would not 
be eligible for a contribution rating increase. An employee designated 
as appropriately compensated, between-the-rails, will receive the 
general increase and a contribution rating increase provided the 
increase does not exceed the upper rail of the NPR for the employee's 
OCS or maximum salary for current broadband level. An employee 
designated as inappropriately compensated, below-the-lower-rail, would 
be eligible for the general pay increase and a contribution rating 
increase. The contribution rating increase may not exceed 6% above the 
lower rail of the maximum salary for the current broadband level.
    A contribution rating increase greater than 20% requires the 
president's approval. Employees in the categories (1) appropriately 
compensated and (2) inappropriately compensated, below-the-lower-rail, 
are eligible for contribution awards up to $10,000 with the approval of 
the pay pool manager. Amounts exceeding $10,000 require the president's 
approval.
    Basic pay plus locality pay may not exceed Executive Level III 
basic pay; upper rail of NPR for employee's OCS; or maximum salary for 
current broadband level. A pay adjustment may not exceed 6% above the 
lower rail, or the maximum salary for current broadband level. A pay 
adjustment over 20% requires the President's approval. The pay pool 
manager approves any increase up to $10,000. Amounts exceeding $10,000 
require the president's approval.
    In general, those employees who fall in the inappropriately 
compensated (B, below-the-rails) category of the NPR should expect to 
receive greater percentage salary increases than those who fall in the 
inappropriately compensated (A, above-the-rails) category. Over time, 
all employees outside the rails will migrate closer to the normal pay 
range and receive a salary appropriate for their level of contribution.
    Employees whose OCS would result in a base pay increase such that 
the salary exceeds the maximum salary for their current broadband level 
may receive a contribution bonus equaling the difference. This bonus 
will be paid as a lump sum payment, and will not add to base pay.
    HINU will establish Total Awards Budget (TAB) for the institution. 
The TAB will be set at not less than one percent of the institution's 
total salary budget calculated on September 30 of each year. The awards 
budget is separate from Pay Pool funds. Awards budget includes funds 
formerly spent for performance awards and incentive awards. The awards 
budget will be available for use as contribution awards and all other 
incentive awards. Not more than 90 percent of the TAB may be spent for 
contribution awards each year. This will allow funds for incentive 
awards not related to CCAS contributions. TAB funds will be paid as 
lump sum amounts and will not add to base pay. For the first year of 
the project, the total awards budget will be set at 1.3 percent of 
total salaries.
    Each pay pool manager will set the necessary guidelines for pay 
adjustments in the pay pool. Decisions will be consistent within the 
pay pool, reflect cost discipline over the life of the demonstration 
project, and be subject to Administrative review. The maximum available 
pay rate under this demonstration project will be the rate for a 
Executive Level III. Notwithstanding any other provision of this 
demonstration project, if General Schedule employees receive an 
increase under 5 U.S.C. 5303 that exceeds the amount otherwise required 
by that section on the date of this notice, the excess portion of such 
increase shall be paid to demonstration project employees in the same 
manner as to General Schedule employees. The excess portion of such 
increase shall not be distributed through the pay pool process.
6. Movement Between Broadband Levels
    It is the intent of the demonstration project to have career growth 
accomplished through the broadband levels. Movement within a broadband 
level will be determined by contribution and salary increases following 
the CCAS process. Movement to a higher broadband level is a competitive 
action. Movement to a lower broadband level may be voluntary or 
involuntary.
    Broadband levels derive from salaries of the banded GS grades and 
equivalent Wage Grades. The lowest salary of any given broadband level 
is that for step 1 of the lowest GS grade in that broadband level. 
Likewise, the highest salary of any given broadband level is that for 
step 10 of the highest GS grade in that broadband level. There is a 
natural overlap in salaries in the GS grades that also occurs in the 
broadband system. Since the OCS is directly related to salaries, there 
is also an overlap between OCS across broadband levels.
    Under the demonstration project, managers are provided greater 
flexibility in assigning duties by moving employees among positions 
within their broadband level. If there are vacancies at higher levels, 
employees may be considered for promotion to those positions in 
accordance with competitive selection procedures.
    Under competitive selection procedures, the selecting official(s) 
may consider candidates from any source based on job-related, merit-
based methodology. Similarly, if there is sufficient cause, an employee 
may be demoted to a lower broadband level position according to the 
contribution reduction-in-pay or removal procedures discussed in 
section III E 2.
7. Implementation Schedule
    The 2000 employee annual appraisal will be done according to the 
performance plan rules in effect at the time of the 2000 close-out. 
Employees will be moved by personnel action into the demonstration 
project and into the appropriate broadband level on October 1, 2000, or 
as specified in the institution's implementation plan. The first CCAS 
assessment cycle will run from October 1 2000 to July 30, 2001. Overall 
assessment scores and pay adjustments resulting from the 2001 
assessment cycle will be paid out the first full pay period of January 
2002.
8. CCAS Grievance Procedures
    Bargaining unit employees who are covered under a collective 
bargaining agreement may grieve CCAS pay determinations under the 
grievance-arbitration provisions of the agreement. Other employees not 
included in a bargaining unit may utilize the appropriate 
administrative grievance procedures to raise a grievance against CCAS 
pay decisions (5 CFR Part 771), with supplemental instructions as 
described below.
    An employee may grieve the OCS (rating of record) If an employee is 
covered by a negotiated grievance procedure that includes grievances 
over appraisal scores, then the employee must use that procedure. If an 
employee is not in a bargaining unit, or is in a bargaining unit but 
grievances over assessment scores are not covered under a negotiated 
grievance procedure, then the employee may use the administrative 
grievance procedure (5 CFR Part 771) with supplemental actions 
described in the following below.
    The employee will submit the grievance initially to the first line 
supervisor, the rating official, who will submit a recommendation to 
the pay pool panel. The pay pool panel may accept the rating official's 
recommendation or reach an

[[Page 13181]]

independent decision. In the event that the pay pool panel's decision 
is different from the rating official's recommendation, appropriate 
justification will be provided. The pay pool panel's decision is final 
unless the employee requests reconsideration by the next higher 
official to the pay pool manager. The pay-pool manager will render the 
final decision on the grievance.
    Table IV will be used for the CCAS rating, which will determine 
additional years of retention service credit during Reduction in Force, 
according to BIA procedures.

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9. Contribution-Based Reduction-in-Pay or Removal Actions
    CCAS is an assessment system that goes beyond a performance-based 
rating system. Contribution is measured against the CCAS factors for 
the three career paths, each having multiple levels of increasing 
contribution. (For the purposes of this section, these factors are 
considered critical and are synonymous with critical elements as 
referenced in 5 U.S.C. Chapter 43.) This section applies to reduction-
in-pay or removal of demonstration project employees based solely on 
inadequate contribution. Inadequate contribution in any one factor at 
any time during the assessment period is considered grounds for 
initiation of reduction-in-pay or removal action. The following 
procedures replace those established in 5 U.S.C. 4303 pertaining to 
reductions in grade or removal for unacceptable performance except with 
respect to appeals of such actions. 5 U.S.C. 4303(e) provides the 
statutory authority for appeals of contribution-based actions. As is 
currently the situation for performance-based actions taken under 5 
U.S.C. 4303, contribution-based actions shall be sustained if the 
decision is supported by substantial evidence and the Merit Systems 
Protection Board shall not have mitigation authority with respect to 
such actions. The separate statutory authority to take contribution-
based actions under 5 U.S.C. 75, as modified in the waiver section of 
this notice (section IX), remains unchanged by these procedures.
    When an employee's contribution in any factor is at or less than 
the mid-point of the next lower broadband level (or a factor score of 
zero for broadband level I employees), the employee is considered to be 
contributing inadequately. In this case, the supervisor must inform the 
employee, in writing, that unless the contribution increases to a score 
above the midpoint of this next lower broadband level (thereby meeting 
the standards for adequate contribution) and is sustained at this 
level, the employee may be reduced in pay or removed. For broadband 
level I employees, a factor score that increases to the midpoint and is 
sustained at that level is determined to be adequate.
    The written notice informing the employee that he/she may be 
reduced in pay or removed, affords the employee a reasonable 
opportunity (a minimum of 60 days) to demonstrate acceptable 
contribution with regard to identifiable factors. As part of the 
employee's opportunity to demonstrate adequate contribution, he or she 
will be placed on a Contribution Improvement Plan (CIP). The CIP will 
state how the employee's contribution is inadequate, what improvements 
are required, recommendations on how to achieve adequate contribution, 
assistance that the agency shall offer to the employee in improving 
inadequate contribution, and consequences of failure to improve.
    Additionally, when an employee's contribution plots in the area 
above the upper rail of the normal pay range, the employee is 
considered to be contributing inadequately. In this case, the 
supervisor has two options. The first is to take no action but to 
document this decision in a memorandum for the record. A copy of this 
memorandum will be provided to the employee and to higher levels of 
management. The second option is to inform the employee, in writing, 
that unless the contribution increases to, and is sustained at, a 
higher level, the employee may be reduced in pay or removed.
    These provisions also apply to an employee whose contribution 
deteriorates during the year. In such instances, the group of 
supervisors who meet during the CCAS assessment process may reconvene 
any time during the year to review the circumstances warranting the 
recommendation to take further action on the employee.
    Once an employee has been afforded a reasonable opportunity to 
demonstrate adequate contribution but fails to do so, a reduction-in-
pay (which may include a change to a lower broadband level and/or 
reassignment) or removal action may be proposed. If the employee's 
contribution increases to an acceptable level and is again determined 
to deteriorate in any factor within two years from the beginning of the 
opportunity period, actions may be initiated to effect reduction in pay 
or removal with no additional opportunity to improve. If an employee 
has contributed acceptably for two years from the beginning of an 
opportunity period, and the employee's overall contribution once again 
declines to an inadequate level, the employee will be afforded an 
additional opportunity to demonstrate adequate contribution before it 
is determined whether or not

[[Page 13183]]

to propose a reduction in pay or removal.
    An employee whose reduction in pay or removal is proposed is 
entitled to a 30-day advance notice of the proposed action that 
identifies specific instances of inadequate contribution by the 
employee on which the action is based. The employee will be afforded a 
reasonable time to answer the notice of proposed action orally and/or 
in writing.
    A decision to reduce in pay or remove an employee for inadequate 
contribution may be based only on those instances of inadequate 
contribution that occurred during the two-year period ending on the 
date of issuance of the proposed action. The employee will be issued 
written notice at or before the time the action will be effective. Such 
notice will specify the instances of inadequate contribution on which 
the action is based and will inform the employee of any applicable 
appeal or grievance rights.
    All relevant documentation concerning a reduction in pay or removal 
that is based on inadequate contribution will be preserved and made 
available for review by the affected employee or a designated 
representative. At a minimum, the records will consist of a copy of the 
notice of proposed action; the written answer of the employee or a 
summary when the employee makes an oral reply; and the written notice 
of decision and the reasons thereof, along with any supporting material 
including documentation regarding the opportunity afforded the employee 
to demonstrate adequate contribution.

E. Special Situations Related to Pay

1. Change in Assignment
    The CCAS concept, using the Broad banding structure, provides 
flexibility in making changes in assignments. In many cases an employee 
can be reassigned, without change in their rate of basic pay, within 
broad descriptions, consistent with the needs of the institution, and 
commensurate with the individual's qualifications. Subsequent 
institutional assignments to projects, tasks, or functions requiring 
the same level and area of expertise and the same qualifications would 
not constitute an assignment outside the scope or coverage of the 
current level descriptors. In most cases, such assignments would be 
within the factor descriptors and could be accomplished without the 
need to process a personnel action. Assignment resulting in series 
change, broadband level change, or change to KSAs shall be accomplished 
by official personnel action. Thus, this approach allows for broader 
latitude in institutional assignments and streamlines the 
administrative process. Rules for specific types of assignments under 
CCAS follow:
    (a) Promotions. When an employee is promoted to a higher broadband 
level, the salary upon promotion will be at least six percent, but not 
more than 20 percent, greater than the employee's current salary. 
However, if the minimum rate of the new broadband level is more than 20 
percent greater than the employee's current salary, then the minimum 
rate of the new broadband level is the new salary. The employee's 
salary may not exceed the salary range of the new broadband level. When 
an employee receiving a retained rate is promoted to a higher broadband 
level, at a minimum, the employee's salary upon promotion will be set 
in the higher broadband level at six percent higher than the maximum 
rate of the employee's existing broadband level; or at the employee's 
existing retained rate, whichever is greater.
    (b) Competitive Selection for a Position with Higher Potential 
Salary. When an employee is competitively selected for a position with 
a higher target broadband level than previously held (e.g., Upward 
Mobility), upon movement to the new position the employee will receive 
the salary corresponding to the minimum of the new broadband level or 
the existing salary, whichever is greater.
    (c) Voluntary Change to Lower Broadband Level/Change in Career Path 
(except RIF). A provision exists today for an employee to request a 
change to lower grade. If that request is totally the employee's 
choice, then the employee's salary is lowered accordingly. To handle 
these special circumstances, employees must submit a request for 
voluntary pay reduction or pay raise declination during the 30-day 
period immediately following the annual payout, and show reasons for 
the request. All actions will be appropriately documented. Although the 
rationale behind such a voluntary request varies under CCAS, a 
voluntary request for a pay reduction or a voluntary declination of a 
pay raise would effectively put an overcompensated employee's pay 
closer to or within the normal pay range. Since an objective of CCAS is 
to properly compensate employees for their contribution, the granting 
of such requests is consistent with this goal. Under normal 
circumstances, all employees should be encouraged to advance their 
careers through increasing contribution rather than trying to be under 
compensated at a fixed level of contribution. When an employee accepts 
a voluntary change to lower broadband level or different career path, 
salary may be set at any point within the broadband level to which 
appointed, except that the new salary will not exceed the employee's 
current salary or the maximum salary of the broadband level to which 
assigned, whichever is lower.
    (d) Involuntary Change to Lower Broadband Level Without Reduction 
in Pay Due to Contribution-based Action. Due to inadequate 
contribution, an employee's salary may fall below the minimum rate of 
basic pay for the broadband level to which he/she is assigned. When an 
employee is changed to a lower broadband level due to such a situation, 
this movement is not considered an adverse action.
    (e) Involuntary Reduction in Pay, to Include Change to Lower 
Broadband Level and/or Change in Career Path Due to Adverse Action. An 
employee may receive a reduction in pay within his/her existing 
broadband level and career path; be changed to a lower broadband level; 
and/or be moved to a new position in a different career path due to an 
adverse action. In these situations, the employee's salary will be 
reduced by at least 6 percent, but will be set no lower than the 
minimum salary of the broadband level to which assigned. Employees 
placed into a lower broadband due to adverse action are not entitled to 
pay retention.
    (f) Reduction-in-Force (RIF) Action (including employees who are 
offered and accept a vacancy at a lower broadband level or in a 
different career path). The employee is entitled to pay retention if 
all Title 5 conditions are met.
    (g) Return to Limited or Light Duty from a Disability as a Result 
of Occupational Injury to a Position in a Lower Broadband Level or to a 
Career Path with Lower Salary Potential than Held Prior to the Injury. 
The employee is entitled indefinitely to the salary held prior to the 
injury and will receive full general and locality pay increases.
2. Academic Ethics
    According to the Ethics Reform Act of 1989, Federal employees may 
not accept outside salaries, stipends, and/or honoraria directly 
related to work duties. This prevents conflict of interest for 
employees who would use information acquired through federal employment 
to seek outside gain. However, normal academic activities fall outside 
the restrictions of usual government employment. The 1991 Ethics Manual 
for federal employees (http://www.house.gov/Ethics/ethicschap3.html) 

[[Page 13184]]

clarifies acceptable guidelines for outside 
employment: ``The Committee has determined that the following types of 
compensation are not honoraria: Compensation for activities where 
speaking, appearing, or writing is only an incidental part of the work 
for which payment is made (e.g., conducting research) * * * '' Haskell 
employees, like other Federal employees, may engage in outside 
activities that follow the guidelines of the 1991 Ethics Manual.

F. Revised Reduction-In-Force (RIF) Procedures

    RIF shall be conducted according to the provisions of 5 CFR part 
351 and BIA procedures except as otherwise specified below.
    Displacement means the movement via RIF procedures of an employee 
into a position held by an employee of lower retention standing.
    Employees are entitled to additional years of retention service 
credit in RIF, based on assessment results. This credit will be based 
on the employee's three most recent annual overall contribution scores 
(OCSs) of record received during the four-year period prior to the 
issuance of RIF notices. However, if at the time RIF notices are 
issued, three CCAS cycles have not yet been completed, the annual 
performance rating of record under the previous performance management 
system will be substituted for one or more OCSs, as appropriate. An 
employee who has received at least one but fewer than three previous 
ratings of record shall receive credit for performance on the basis of 
the value of the actual rating(s) of record divided by the number of 
actual ratings received. Employees with three OCS or performance 
ratings shall receive credit for performance on the basis of the value 
of the actual ratings of record divided by three. In cases where an 
individual employee has no annual OCS or performance rating of record, 
an average OCS or performance rating will be assigned and used to 
determine the additional service credit for that individual. (This 
average rating is derived from the current ratings of record for the 
employees in that individual's career path and broadband level within 
the competitive area affected by a given RIF.) See TABLE IV, Retention 
Service Credit Associated with Assessment Results.
    When a competing employee is to be released from his/her position, 
the activity shall establish separate master retention lists for the 
competitive and excepted services, by type of work schedule and (for 
excepted service master retention lists) appointing authority. Within 
the above groups, competing employees shall be listed on the master 
retention list in compliance with 5 CFR part 3551 and BIA procedures.
    Employees will be ranked in order of their retention standing, 
beginning with the most senior employee. This employee may displace an 
employee of lower retention standing occupying a position that is at 
the same or lower broadband level and that is in a series for which the 
senior employee is fully qualified, to include a series in a different 
career path. The undue interruption standard of 5 CFR 351.403(a)(1) 
shall serve as the criterion to determine if an employee is fully 
qualified. In addition, to be fully qualified. (However, statutory 
waivers shall continue to apply) The displaced employee must be 
appointed under the same authority, if excepted service, and in the 
same work schedule. Offer of assignment shall be to the position that 
requires no reduction or the least possible reduction in broadband. 
Where more than one such position exists, the employee must be offered 
the position encumbered by the employee with the lowest retention 
standing.
    Displacement rights are normally limited to one broadband level 
below the employee's present position. However, a preference-eligible 
employee with a compensable service-connected disability of 30 percent 
or more may displace up to the two broadband levels below the 
employee's present position (or the equivalent of five General Schedule 
grades) below the employee's present level.
    Employees covered by the demonstration are not eligible for grade 
retention. Pay retention will be granted to employees downgraded by 
reduction in force whose rate of basic pay exceeds the maximum salary 
range of the broadband level to which assigned. Such employees will be 
entitled to retain the rate of basic pay received immediately before 
the reduction, not to exceed 150% of the maximum salary of the lower 
broadband level.
    Under the demonstration project, all employees affected by a 
reduction-in-force action, other than a reassignment, maintain the 
right to appeal to the Merit Systems Protection Board (MSPB) if they 
believe the process/procedures were not properly applied.
    Prior to RIF, employees may be offered a vacant position in the 
same broadband as the highest broadband available by displacement. 
Employees may also be offered placement into vacant positions for which 
management has waived the qualifications requirements. If the employee 
is not placed into a vacant position and cannot be made an offer of 
assignment via displacement, the employee shall be separated.

G. Academic and Certificate Training

    Trained and educated personnel are a critical resource in a higher 
education institution. This demonstration recognizes that training and 
development programs are essential to improving the performance of 
individuals in the higher education workforce, and thereby raising the 
overall level of performance of the higher education workforce, and 
that a well-developed training program is a valuable tool for 
recruiting and retaining motivated employees. The HEWP authorizes 
degree and certificate training for HINU employees, and authorizes 
payment for these degree and certificate training programs. This 
authorization will facilitate continuous acquisition of advanced, 
specialized knowledge essential to the higher education workforce, and 
provide a capability to assist in the recruiting and retaining of 
personnel critical to the present and future requirements of the higher 
education workforce. Funding for training is the responsibility of the 
institution.

H. Sabbaticals

    The president of HINU will have the authority to grant sabbaticals 
without application to higher levels of authority. These sabbaticals 
will permit employees to engage in study, research, or work experience 
that contributes to their development and effectiveness. The sabbatical 
provides opportunities for employees to acquire knowledge and expertise 
that cannot be acquired in the normal working environment. These 
opportunities should result in enhanced employee contribution. The 
spectrum of available activities under this program is limited only by 
the constraint that the activity contribute to the institution's 
mission and to the employee's development. The program can be used for 
advanced education; employee development; or training with industry or 
on-the-job work experience with public, private, or nonprofit 
organizations. It enables an employee to spend time in an academic or 
work environment or to take advantage of the opportunity to devote 
full-time effort to technical, academic, or managerial research.
    The HEWP sabbatical program will be available to all demonstration 
project employees who have seven or more years of service in the 
institution. Each sabbatical will be of three to twelve months' 
duration and must result in a

[[Page 13185]]

product, service, report, or study that will benefit the higher 
education community as well as increase the employee's individual 
effectiveness. A process for application for a sabbatical will be 
established by the mechanism to recommend sabbaticals to the president 
or equivalent, who has final approval authority, and who must ensure 
that the program benefits both the higher education workforce and the 
individual employee. Funding for the employee's salary and other 
expenses of the sabbatical is the responsibility of the institution.

IV. Training

    The key to the success or failure of the proposed demonstration 
project will be the training provided for all involved. This training 
will provide not only the necessary knowledge and skills to carry out 
the proposed changes, but will also lead to participant commitment to 
the program.
    Training prior to 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) the new position requirements 
document; (5) the new classification system; and (6) the contribution-
based compensation and assessment system.

A. 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, as well as skills training in using the classification system, 
position requirements document, and contribution assessment software 
developed for use in the project.

B. Administrative Services Staff

    The Vice President for Administration, the Director of Personnel 
and the HEWP administrative staff will play a key role in advising, 
training, and coaching supervisors and employees in implementing the 
demonstration project. This staff will receive training in the 
procedural and technical aspects of the project.

C. Employees

    Prior to implementation, all employees covered under the 
demonstration project will be trained through various media. This 
training is intended to fully inform all affected employees of all 
significant project policies procedures, and processes.

V. Conversion

A. Conversion to the Demonstration Project

    Initial entry into the demonstration project for covered employees 
will be accomplished through a full employee-protection approach that 
ensures each employee's initial placement into a broadband level 
without loss of pay. Automatic conversion from the permanent GS grade 
and step of record at time of conversion into the new broadband system 
will be accomplished.
    Adjustments to the employee's base pay for step increase and non-
competitive career ladder promotion will be computed based on the 
current value of the step or promotion increase and a prorated share 
based upon the number of weeks an employee has completed towards the 
next higher step or grade, per paragraph VIII A. This conversion 
process ``buy-in is applicable to employees only at the initial entry 
no the demonstration project in accordance with the approved 
implementation plan. All HEWP employees will be eligible for the future 
locality pay increases of their geographic area.
    Adverse action and pay retention provisions will not apply to the 
conversion process, as there will be no change in total salary. If the 
employee's rate of basic pay exceeds the maximum rate of basic pay for 
the broadband level corresponding to the employee's GS grade, the 
employee will remain at that broadband level and will receive a 
retained rate. Employees who enter the demonstration project later by 
lateral reassignment or transfer will enter at their current basic pay 
with no loss or gain due to transfer, and will not receive the ``buy-
in'' applied during the initial conversion process of their institution 
into the demonstration project.

B. Conversion Back to the Former System

    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 procedure will be used to convert the employee's project 
pay band to a GS grade and the employee's demonstration rate of pay to 
a GS 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 assignments, 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.
1. Grade-Setting Provisions
    An employee is converted to one of the grades in their current 
broadband level according to the following rules:
    (i) The employee's adjusted rate of pay under the demonstration 
project (including any locality payment) is compared with the step 4 
rate in the highest applicable GS rate range. (For this purpose, a GS 
rate range includes a rate range 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.
    (ii) If the employee's adjusted demonstration 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.
    (iii) If the employee's adjusted demonstration 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 pay band. If the employee's adjusted rate 
equals or exceeds the step 4 rate of the second-highest grade, the 
employee is converted to that grade.
    (iv) This process is repeated for each successively lower grade in 
the band until a grade is found in which the employee's adjusted 
demonstration

[[Page 13186]]

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.
    (v) Exception: If the employee's adjusted demonstration 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.
    (vi) Exception: An employee will not be converted to a lower grade 
than the grade held by the employee immediately preceding a conversion, 
lateral assignment, or lateral transfer into the demonstration project, 
unless since that time the employee has undergone a reduction in 
broadband level, reduction in pay based upon an adverse action, a 
contribution-based action, a reduction-in-force action, or a voluntary 
change to lower broadband level.
2. 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 a GS 
rate of pay in accordance with the following rules:
    (i) The pay conversion is done before any geographic movement or 
other pay-related action that coincides with the employee's movement or 
conversion out of the demonstration project.
    (ii) An employee's adjusted rate of pay under the project 
(including any locality payment) is converted to a GS 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.)
    (iii) 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.
    (iv) If the highest applicable GS rate range is a special rate 
range, the employee's adjusted demonstration 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).
3. Employees Receiving a Retained Rate Under the Project
    If an employee is receiving a retained rate under the demonstration 
project, the employee's GS-equivalent grade is the highest grade 
encompassed in his or her broadband level. The institution will confer 
with the Office of Personnel Management (OPM) to prescribe a procedure 
for determining GS-equivalent pay rates for employees receiving 
retained rates.
4. Years of Retention Service Credit and Contribution Provisions
    Employees leaving the demonstration project will be assigned 
ratings of record that conform with pattern E of 5 CFR 430.208(d) based 
on the years of credit accumulated for the 3 most recent years during 
the last 4 years while under the demonstration project. Since the 
demonstration project does not make use of summary level designators 
(e.g., Outstanding, Level 5. Highly Successful, Level 4; Fully 
Successful, Level 3; or Unacceptable, Level 1) used in the appraisal 
system and programs constructed under 5 U.S.C. Chapter 43 and 5 CFR 
part 430, the retention service credit that is based on the employee's 
OCS. Employees receiving a Medium or Higher OCS score will convert to a 
satisfactory rating in the current Federal appraisal system.
5. 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. CCAS 
base salary 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).

VI. Project Duration

    The project evaluation plan addresses how each intervention will be 
comprehensively evaluated for at least the first five years of the 
demonstration project. Major changes and modifications to the 
interventions can be made through announcement in the Federal Register. 
At the five-year point, the entire demonstration project will be 
reexamined for: (a) Permanent implementation; (b) modification and 
additional testing; (c) extension of the evaluation period; or (d) 
termination.

VII. Evaluation Plan

    Demonstration-authorizing legislation (Public Law 105-337) mandates 
evaluation of the demonstration project to assess the effects of 
project features and outcomes. The overall evaluation will consist of 
three phases--baseline, formative, and summary evaluations. The 
evaluation for the HEWP will be overseen by the Secretary, Department 
of the Interior, and Office of Indian Education Programs (OIEP). The 
main purpose of the evaluation is to determine the effectiveness of the 
personnel system changes to be undertaken. To the extent possible, 
strong direct or indirect relationships will be established between the 
demonstration project features, outcomes, and mission-related changes 
and personnel system effectiveness criteria. The evaluation approach 
uses an intervention impact model that specifies each personnel system 
change as an intervention, the expected effects of each intervention, 
the corresponding measures, and the data sources for obtaining the 
measures.
    The specific measures to be collected using the different methods 
are determined from the goals and objectives stated for each 
intervention. Both qualitative and quantitative measures will be 
obtained. Most of the potential measures can be grouped around three 
major effectiveness criteria: speed, cost, and quality. Collectively, 
the outcomes of the interventions are hypothesized to lead to 
institution personnel management improvements, as reflected by 
timeliness, cost effectiveness, and quality.
    Baseline measures will be taken prior to project implementation. 
Then, repeated post-implementation measurements will be taken to allow 
longitudinal comparisons by intervention within HINU A comparison group 
will be selected and compared to the demonstration project group to 
determine the effects and outcomes of the project.
    The effectiveness of each intervention and of the demonstration 
project as a whole in meeting stated objectives will be addressed using 
a multi-approach method. Some methods will be unobtrusive in that they 
do not require reactions to inputs from employees or managers. These 
methods include analysis of archival workforce data and

[[Page 13187]]

personnel office data, review of logs maintained by site historians 
documenting contextual events, and assessments of external economic and 
legislative changes. Other methods, such as periodic attitude surveys, 
structured interviews, and focus groups, will be used to assess the 
perceptions of employees, managers, supervisors, and personnel 
regarding the personnel system changes and the performance of their 
institutions in general. Evaluation activities will also take into 
account the unique nature of this project in terms of institutional 
diversity.
    In addition to the intervention impact model, a general context 
model will be used to determine the effects of potential intervening 
variables (e.g., downsizing, regionalization of the personnel function, 
and the state of the economy in general). Potential unintended outcomes 
will also be monitored, and an attempt will be made by the evaluation 
team to link the outcomes of demonstration project interventions to 
institutional effectiveness. In addition to assessing the impact of the 
individual demonstration project features, the evaluation will also 
assess the impact of the project as a whole, along with possible 
context effects and effects of intervening variables.
    The evaluation will also monitor impact on veterans and EEO groups, 
adherence to the merit systems principles and avoidance of prohibited 
personnel practices. In addition, the evaluation will attempt to link 
the demonstration project effects and outcomes to institutional 
outcomes such as mission accomplishment and productivity.
    The initial evaluation effort will consist of three main phases--
baseline, formative, and summary evaluation covering five (5) years. 
Baseline will collect workforce data to determine the ``as-is'' state. 
The formative evaluation phase will include baseline data collection 
and analyses, implementation evaluation, and interim assessments. 
Periodic reports and annual summaries will be prepared to document the 
findings. The summary evaluation phase will focus on an overall 
assessment of the demonstration project outcomes, looking initially at 
the first four (4) years, with a follow-on report covering the first 
five (5) years. The rationale for summary evaluation after the first 
four years is to assess whether the demonstration will continue after 
the fifth year. If the analysis indicates that the interventions show a 
positive effect towards meeting the goals of the demonstration, then 
documentation will be generated to support a request that the 
demonstration progress further. If the analysis indicates that the 
interventions do not meet the stated objectives, or if HINU does not 
wish to continue in the demonstration, then documentation and planning 
for conversion back to the existing personnel system must be prepared. 
The fifth-year summary evaluation, used in reporting to Congress, will 
provide overall assessment of all initiatives individually and as a 
whole. It will also provide recommendations on broader Federal 
Government application.

VIII. Demonstration Projects Costs

A. Step and Promotion Buy-Ins

    Under this demonstration project, implementation of the broad 
banding pay structure eliminates the step increments of the current GS 
pay structure. To facilitate conversion to this system without loss of 
pay, employees will receive a basic pay increase for that portion of 
the next step corresponding to the time in-step they have completed up 
to the effective date of the employee conversion. As under the current 
system, supervisors will be able to withhold these partial increases 
(step) if the employee's performance has fallen below fully successful.
    Rules governing within-grade increases (WGI) within DOI will remain 
in effect until the employee conversion date. Adjustments to employees' 
base pay for WGI equity will be computed effective the first pay period 
in which the employee is reassigned into the demonstration project. WGI 
equity shall be acknowledged by increasing base salaries by a prorated 
share based upon the actual number of weeks an employee has completed 
towards the next higher step. Employees at step 10, or receiving 
retained pay at the time of conversion, will not be eligible for this 
equity adjustment. For those employees in career-ladder promotion 
programs who are scheduled to be promoted to a higher grade and whose 
performance is at least fully successful, base pay will be increased by 
a prorated share of the current value of the next scheduled promotion 
increase based upon the actual number of weeks the employee has 
completed towards the next scheduled promotion. No WGI equity 
adjustment will be made if the employee's pay is adjusted for a 
promotion that would be effective before the next scheduled WGI.

B. Out-Year Project Costs

    The overall demonstration cost strategy will be to balance 
projected costs with benefits of the demonstration to bring about the 
projected improvements to the institution. The project evaluation 
results will be used to ensure that out-year project costs will not 
outweigh the derived benefits to the demonstration. A baseline will be 
established at the start of the project, and salary expenditures will 
be tracked yearly. Implementation costs, including the step and grade 
buy-in costs detailed above, will not be included in the cost 
evaluations, but will be accounted for separately.
    The amount of money available for contribution increases in the 
out-years will be determined as part of the annual project evaluation 
process, starting with a review of the prior year's data for HINU by 
the Personnel Policy Board, and then will be reported to the president 
of the institution The funds determination will be based on a balancing 
of appropriate factors, including the following: (1) Historical 
spending for WGI, quality step increases, and in-level career 
promotions; (2) labor market conditions and the need to recruit and 
retain a skilled workforce to meet the business needs of the 
institution; and (3) the fiscal condition of the institution. Given the 
implications of base pay increases for long-term pay and benefit costs, 
the compensation levels will be determined after cost analysis with 
documentation of the mission-driven rationale for the amount. As part 
of the evaluation of the project, HINU will track the base pay costs 
(including average salaries) under the demonstration project and 
compared to the base pay costs under similar demonstration projects and 
under a simulation model that replicates General Schedule spending. 
These evaluations will balance costs incurred against benefits gained, 
so that both fiscal responsibility and project success are given 
appropriate weight.

C. Personnel Policy Boards

    It is envisioned that HINU shall establish a Personnel Policy Board 
for the demonstration project that will be representative of the 
employee population and chaired by the president of the institution or 
delegated representative. The board is tasked with the following:
    (a) Overseeing the pay budget;
    (b) Determining the composition of the CCAS pay pool in accordance 
with the established guidelines and statutory constraints;
    (c) Reviewing operation of the Institution's CCAS pay pools;
    (d) Providing guidance to pay pool managers;
    (e) Administering funds to CCAS pay pool managers;

[[Page 13188]]

    (f) Reviewing hiring and promotion salaries;
    (g) Monitoring award pool distribution by pay pool; Assessing the 
need for changes to the demonstration project, procedures or policies.

D. Developmental Costs

    Costs associated with the development of the demonstration system 
include software automation, training, and project evaluation. Site-
specific costs for follow-on training, employee salary conversion, and 
any in-house software automation will be borne by the institution from 
such additional sums as may be necessary for the operation of HINU 
pursuant to Public Law 105-337. The projected annual expenses for each 
area are summarized in TABLE V. Project evaluation costs will continue 
for at least the first five (5) years and may continue beyond that 
point. TABLE V is an example of the format used. Costs will be 
determined once an actual plan is selected.

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IX. Required Waivers to Law and Regulations

A. Waivers to Title 5, United States Code

    Chapter 5, Section 552a: Records maintained on individuals. This 
section is waived only to the extent required to clarify that 
volunteers under the Voluntary Emeritus Program are considered 
employees of the Federal Government for purposes of this section.
    Chapter 31, Section 3111: Acceptance of volunteer service. This 
section is waived only to the extent required to allow volunteer 
service under provisions of the voluntary emeritus program.
    Chapter 33, Section 3308: Competitive service; examinations; 
education requirements prohibited; exceptions (to the extent necessary 
to accommodate the Scholastic Achievement Appointment's requirement for 
a college degree).
    Chapter 33, Section 3317 (a): Competitive service; certification 
from registers (insofar as ``rule of three'' is eliminated under the 
demonstration project).
    Chapter 33, Section 3318 (a): Insofar as ``rule of three'' is 
eliminated under the demonstration project. Veterans' preference 
provisions remain unchanged.
    Chapter 41, Section 4107 (a): Prohibition of training for academic 
degrees.
    Chapter 43, Sections 4301-4305 except for 4303 (e) and (f): Related 
to performance appraisal. In turn, 4303 (3) and (f) are waived only to 
the extent necessary to (a) substitute ``broadband'' for ``grade'' and 
(2) provide that moving to a lower broadband as a result of not 
receiving the full amount of a general pay increase because of 
inadequate contribution is not an action covered by the provisions of 
section 4303.
    Chapter 51, Sections 5101-5102 and Sections 5104-5107: Related to 
classification standards and grading.
    Chapter 53, Sections 5301; 5302 (8) and (9); and 5303-5305 and 
5331-5336: Related to special pay and pay rates and systems (Sections 
5301, 5302 (8) and (9), 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 basic pay).
    Chapter 53, Section 5362: Grade retention.
    Chapter 53, Section 5363: Pay retention. This waiver applies only 
to the extent necessary to: (1) allow demonstration project employees 
to be treated as General Schedule employees; (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 (3) replace the term ``grade'' with ``broadband level.''
    Chapter 71, to the extent its provisions (e.g. 5 U.S.C. 7103(a)(12) 
and 7116) would prohibit management or the union from unilaterally 
terminating negotiations over whether the project will apply to 
employees represented by the union.
    Chapter 75, Sections 7512(3): Related to adverse action (but only 
to the extent necessary to exclude reductions in broadband level not 
accompanied by a reduction in pay and replace ``grade'' with 
``broadband level'') and 7512(4): Related to adverse action (but only 
to the extent necessary to exclude conversions from a General Schedule 
special rate to demonstration project pay that do not result in a 
reduction in the employee's total rate of pay).

B. Waivers to Title 5, Code of Federal Regulations

    Part 300, Sections 300.601 through 300.605: Time-in-grade 
restrictions.
    Part 308, Volunteer service: Waived to allow volunteer service 
under the provisions of the voluntary emeritus program.
    Part 315, Sections 315.801 and 315.802: Probationary period.
    Part 316, Section 316.301: Term appointment (the extent that 
modified term appointments may cover a maximum period of 6 years).
    Part 316, Section 316.303: Tenure of term employees (to the extent 
that term employees may compete for permanent status through local 
merit promotion plans).

[[Page 13189]]

    Part 316, Section 316.305: Eligibility for within-grade increases.
    Part 332, Section 332.402: ``Rule of three'' will not be used in 
the demonstration project.
    Part 332, Section 332.404: Order of selection is not limited to 
highest three eligible.
    Part 351, Sections 351.402 through 351.403: Competitive Area and 
Competitive Levels; Section 351.504 (a) and (c): Credit for 
Performance; and Section 351.601 through .608: References to 
competitive levels are eliminated.
    Part 351, Sections 351.701 (b) and (c): Assignment rights (bump and 
retreat): To the extent that the distinction between bump and retreat 
is eliminated and the placement of demonstration project employees is 
limited to one broadband level below the employee's present level, 
except that a preference-eligible employee with a compensable service-
connected disability of 30 percent or more may displace up to the two b 
broadband levels below the employee's present position (or the 
equivalent of five General Schedule grades) below the employee's 
present level.
    Part 410, Section 410.308(a): Prohibition of training for academic 
degrees.
    Part 430, Subpart A and Subpart B: Performance management; 
performance appraisal.
    Part 432, Sections 432.101, 432.102, 432.106 and 432.107: (Only to 
the extent necessary to (a) substitute ``broadband'' for ``grade'' and 
(2) provide that moving to a lower broadband as a result of not 
receiving the full amount of a general pay increase because of 
inadequate contribution is not an action covered by the provisions of 
section 4303).
    Part 432, Section 432.103 through 432.105: Performance-based 
reduction-in-grade and removal actions.
    Part 451, Sections 451.106(b) and 451.107(b): Awards.
    Part 511, Section 511.201: Coverage of and exclusions from the 
General Schedule (To the extent that professional positions are covered 
by broad banding.)
    Part 511, Subpart A; Subpart B; subpart F, Sections 511.601 through 
511.612: Classification within the General Schedule; and Subpart G: 
Effective Dates of Position Classification Actions or Decisions.
    Part 530, Subpart C: Special salary rates.
    Part 531, Subpart B, Subpart D, Subpart E: Determining rate of pay; 
within-grade increases and quality step increases.
    Part 536, Grade and Pay Retention (only to the extent necessary to 
eliminate grade retention and to provide that, for the purposes of 
applying pay retention provisions: (1) Demonstration project employees 
are to be treated as General Schedule employees; (2) grade is replaced 
by ``Broadband level'; and (3) 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).
    Part 550, Sections 550.703: Severance Pay, definition of 
``reasonable offer'' (by replacing ``two grade or pay levels'' with 
``one broadband level'' and ``grade or pay level'' with broadband 
level'').
    Part 575, Sections 575.102(a)(1), 575.202(a)(1), 575.302(a)(1), and 
Subpart D: Recruitment and relocation bonuses, and retention 
allowances, and supervisory differentials (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 
positions).
    Part 752, Sections 752.401(a)(3): Reduction in grade and pay (but 
only to the extent necessary to exclude reductions in broadband level 
not accompanied by a reduction in pay and to replace ``grade'' with 
``broadband level'') and 752.401(a)(4) (but only to the extent 
necessary to exclude conversions from a General Schedule special rate 
to demonstration project pay that do not result in a reduction in the 
employee's total rate of pay).

[FR Doc. 00-5589 Filed 3-9-00; 8:45 am]
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