[Federal Register Volume 73, Number 136 (Tuesday, July 15, 2008)]
[Notices]
[Pages 40500-40502]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-16066]


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DEPARTMENT OF COMMERCE

National Institute of Standards and Technology


Alternative Personnel Management System (APMS) at the National 
Institute of Standards and Technology

AGENCY: National Institute of Standards and Technology, Department of 
Commerce.

ACTION: Notice of Modifications with Request for Comment.

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SUMMARY: This notice provides for changes to the existing provisions of 
the National Institute of Standards and Technology's (NIST) Alternative 
Personnel Management System (APMS) published October 21, 1997 (62 FR 
54606), and May 6, 2005 (70 FR 23996) primarily to improve flexibility 
in rewarding new and mid-level employees and to broaden the ability to 
make performance distinctions.

DATES: This notice is effective on October 1, 2008. Comments will be 
accepted until close of business on August 14, 2008.

ADDRESSES: Send or deliver comments to Robert Kirkner, Chief Human 
Capital Officer, National Institute of Standards and Technology, 
Building 101, Room A-531, 100 Bureau Drive Mail Stop 1700, 
Gaithersburg, MD 20899-1700, FAX: (301) 948-6107 or e-mail comments to 
[email protected].

FOR FURTHER INFORMATION CONTACT: For questions or comments, please 
contact Robert Kirkner at the National Institute of Standards and 
Technology, (301) 975-3002; or Pamela Boyland at the U.S. Department of 
Commerce, (202) 482-1068.

SUPPLEMENTARY INFORMATION:

Background

    In accordance with Public Law 99-574, the NIST Authorization Act 
for 1987, the Office of Personnel Management (OPM) approved a 
demonstration project plan, ``Alternative Personnel Management System 
(APMS) at the National Institute of Standards and Technology (NIST),'' 
and published the plan in the Federal Register on October 2, 1987 (52 
FR 37082). The project plan has been modified twice to clarify certain 
NIST authorities (54 FR 21331 of May 17, 1989, and 55 FR 39220 of 
September 25, 1990). The project plan and subsequent amendments were 
consolidated in the final APMS plan, which became permanent on October 
21, 1997, (62 FR 54604). NIST published an amendment on May 6, 2005 (70 
FR 23996) which became permanent on June 6, 2005.
    The plan provides for modifications to be made as experience is 
gained, results are analyzed, and conclusions are reached on how the 
system is working. This notice formally modifies the APMS plan to 
refine the links between pay and performance. Comments will be 
considered and any changes deemed necessary will be made.

    Dated: July 7, 2008.
James M. Turner,
Deputy Director.

Table of Contents

I. Executive Summary
II. Basis for APMS Plan Modification
III. Changes in the APMS Plan

I. Executive Summary

    The National Institute of Standards and Technology's (NIST) 
Alternative Personnel Management System (APMS) is designed to (1) 
Improve hiring and allow NIST to compete more effectively for high-
quality researchers through direct hiring, selective use of higher 
entry salaries, and selective use of recruiting allowances; (2) 
motivate and retain staff through higher pay potential, pay-for-
performance, more responsive personnel systems, and selective use of 
retention allowances; (3) strengthen the manager's role in personnel 
management through delegation of personnel authorities; and (4) 
increase the efficiency of personnel systems through installation of a 
simpler and more flexible classification system based on pay banding 
through reduction of guidelines, steps, and paperwork in 
classification, hiring, and other personnel systems, and through 
automation.
    Since implementing the APMS, according to findings in the Office of 
Personnel Management's ``Summative Evaluation Report National Institute 
of Standards and Technology Demonstration Project: 1988-1995,'' NIST is 
more competitive for talent; NIST retained more top performers than a 
comparison group; and NIST managers reported significantly more 
authority to make decisions concerning employee pay. This modification 
builds on this success by refining the link between pay and 
performance. In 2005, NIST made the first significant changes to the 
APMS since its inception. NIST replaced its 100-point rating scale with 
six performance ratings and provided for automatic bonuses for high 
performing pay-capped employees. NIST also adjusted its provisions on 
retention service credit for reduction in force and annual adjustments 
to basic pay to correspond with the 2005 changes.
    This amendment modifies the May 2005 amendment. Specifically, NIST 
will introduce a seventh level to its six level performance ratings 
system, broadening flexibility to make performance distinctions. Pay 
increases will continue to be based upon an annually determined 
percentage of the mid-point salary for each pay band in the career path 
and linked directly to

[[Page 40501]]

the top four performance ratings. This amendment will allow the 
percentage of the mid-point salary to vary not only by career path but 
also by pay bands within a career path, which will expand NIST's 
ability to reward new, early-career and mid-level employees. This 
amendment will also modify the provisions on retention service credit 
for reduction in force to correspond with these changes.
    NIST will continually monitor the effectiveness of this amendment.

II. Basis for APMS Plan Modification

    The need to modify the current Pay for Performance System (PPS), 
which was first implemented in fiscal year 2006, surfaced in the 
results of the 2007 NIST Employee Surveys, the NIST Research Advisory 
Committee 2007 Report to the NIST Director, the 2007 OPM Pay-for-
Performance Report to NIST, and in discussions of the NIST Leadership 
Board. Generally, feedback indicated a need to clarify the system and 
address consequences of the May 2005 changes. One concern raised was 
that the system disproportionately rewarded employees in higher pay 
bands to the detriment of new and early-career employees. Another 
concern was that there was not enough flexibility to make meaningful 
performance distinctions. A work group of internal NIST stakeholders 
was tasked with evaluating the feedback and developing responsive 
modifications. The resulting adjustments are incorporated into this 
amendment.
    The NIST APMS proposed modifications include adding a seventh level 
to the current six level system, to permit an additional performance 
distinction. From highest to lowest, the seven performance ratings are: 
Exceptional Contributor, Superior Contributor, Meritorious Contributor, 
Significant Contributor, Contributor, Marginal Contributor, and 
Unsatisfactory.
    Performance ratings are determined based on the cumulative ratings 
and relative weights of the critical elements. Critical elements are 
rated using benchmark standards and supplemental standards/success 
measures. The ratings for the critical elements are: exceeds 
expectations (E), fully successful (S), minimally meets expectations 
(M), or unsatisfactory (U).
    Performance pay increases will continue to be based on the annually 
determined percentage of the mid-point salary for each pay band in the 
career path. When the percentage is applied to the mid-point salary in 
each pay band, the resulting dollar amount is the unit of salary 
increase or ``I'' for that pay band and career path. ``I'' percentages 
may differ by pay band and career path. The ``I'' percentage used for 
any given career path and band will apply system-wide, except that the 
Director may authorize a particular operating unit to use a lower ``I'' 
percentage for reasons related to solvency.
    Actual salary increases based on multiples of ``I'' are granted to 
employees in the top four performance levels as follows: Exceptional 
Contributor: ``I'' x 5; Superior Contributor: ``I'' x 3; Meritorious 
Contributor: ``I'' x 2; and Significant Contributor: ``I.'' A salary-
capped employee with an Exceptional Contributor or Superior Contributor 
rating must receive a bonus at least equivalent to the salary increase 
that would have been received if the employee's salary were not capped.
    In addition to receiving a performance pay increase, employees with 
Exceptional Contributor, Superior Contributor, Meritorious Contributor, 
and Significant Contributor ratings receive the full annual basic pay 
adjustment (general and locality pay increases) and are eligible for a 
discretionary bonus. Employees with a Contributor rating do not receive 
a performance pay increase but do receive the full annual basic pay 
adjustment and are eligible for a discretionary bonus. Employees rated 
Marginal Contributor or Unsatisfactory do not receive a performance pay 
increase, discretionary bonus, or annual basic pay adjustment.
    The current provision on additional service credit for reduction-
in-force purposes is revised to correspond with these changes. For 
retention purposes, this modification grants ten additional years of 
service for a rating of Exceptional Contributor, eight additional years 
of service for a rating of Superior Contributor, four additional years 
of service for a rating of Meritorious Contributor, three additional 
years of service for a rating of Significant Contributor, and one 
additional year of service for a rating of Contributor.

III. Changes in the APMS Plan

    The APMS at the NIST, published in the Federal Register October 21, 
1997 (62 FR 54604) and May 6, 2005 (70 FR 23996), is amended as 
follows:
    1. Link Between Performance and Retention: The subsection titled 
``Link Between Performance and Retention'' (70 FR 23998) is replaced 
with the following:

Link Between Performance and Retention

    An employee with a performance rating of Exceptional Contributor is 
credited with ten additional years of service for retention purposes. 
An employee with a performance rating of Superior Contributor is 
credited with eight additional years of service for retention purposes. 
An employee with a performance rating of Meritorious Contributor is 
credited with four additional years of service for retention purposes. 
An employee with a performance rating of Significant Contributor is 
credited with three additional years of service for retention purposes. 
An employee with a performance rating of Contributor is credited with 
one additional year of service for retention purposes. The total credit 
is based on the employee's three most recent annual performance ratings 
of record received during the four-year period prior to an established 
cutoff date, for a potential total credit of thirty years. No 
reduction-in-force credit converts to this system from any other 
performance appraisal system.
    2. Performance Ratings: The subsection titled ``Performance 
Ratings'' (70 FR 23998) is replaced with the following:

Performance Ratings

    The NIST APMS performance ratings are Exceptional Contributor, 
Superior Contributor, Meritorious Contributor, Significant Contributor, 
Contributor, Marginal Contributor, and Unsatisfactory. Performance 
ratings are determined based on the cumulative ratings and weights of 
the critical elements in the performance plan. Performance in each 
critical element is evaluated using the benchmark standards and any 
supplemental standards or success measures, and the element is assigned 
a rating of exceeds expectations (E), fully successful (S), minimally 
meets expectations (M), or unsatisfactory (U).
    The rating of the element is then matched with the weighted value 
of that critical element to produce a value for the element. For 
example, if an element is weighted 4 and the element is assigned a 
rating of exceeds expectations (E), then that element has a value of 
4E.
    Once this matching is completed and the elements are totaled, 
performance ratings are assigned using the following table.

[[Page 40502]]



------------------------------------------------------------------------
            Performance rating                Critical element  ratings
------------------------------------------------------------------------
Exceptional Contributor...................  At least 8E; None below S.
Superior Contributor......................  At least 6E; None below S.
Meritorious Contributor...................  At least 4E; None below S.
Significant Contributor...................  At least 3E; Up to 2M.
Contributor...............................  Up to 3M.
Marginal Contributor......................  4 or more M.
Unsatisfactory............................  1 or more U.
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    An employee with unsatisfactory performance in one or more critical 
elements is considered unsatisfactory overall and is given a 
performance improvement plan and an opportunity to improve. If the 
employee's performance remains unsatisfactory at the end of an 
opportunity to improve, the supervisor initiates appropriate follow-up 
action, i.e., reassignment, proposed change to a lower pay band, or 
proposed removal.
    3. Performance Pay Decisions: The subsection titled ``Performance 
Pay Decisions'' (62 FR 54612) is replaced with the following:

Performance Pay Decisions

    Annually, the NIST Director determines the amount of a unit of 
increase, or ``I,'' based on a percentage of the mid-point salary for 
each pay band of each career path. The percentage may vary by career 
path and by pay bands within a career path. Performance pay increases 
are linked directly to performance ratings. An employee with an overall 
performance rating of Exceptional Contributor receives a performance 
pay increase equal to five units of increase, or 5 x ``I.'' A Superior 
Contributor receives a performance pay increase equal to 3 x ``I.'' A 
Meritorious Contributor receives a performance pay increase equal to 2 
x ``I.'' A Significant Contributor receives a performance pay increase 
equal to ``I.'' The actual dollar amount of a performance pay increase 
depends upon an employee's career path and pay band. Employees may not 
receive an increase that causes their salary to exceed the maximum rate 
for their pay band.
    Employees with Contributor, Marginal Contributor, and 
Unsatisfactory ratings do not receive performance pay increases.

[FR Doc. E8-16066 Filed 7-14-08; 8:45 am]
BILLING CODE 3510-13-P