[Federal Register Volume 75, Number 103 (Friday, May 28, 2010)]
[Notices]
[Pages 30198-30241]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-12690]



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Part IV





Department of Defense





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Science and Technology Reinvention Laboratory Personnel Management 
Demonstration Project, Department of Navy (DON), Office of Naval 
Research (ONR); Notice

  Federal Register / Vol. 75 , No. 103 / Friday, May 28, 2010 / 
Notices  

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DEPARTMENT OF DEFENSE

Office of the Secretary


Science and Technology Reinvention Laboratory Personnel 
Management Demonstration Project, Department of Navy (DON), Office of 
Naval Research (ONR)

AGENCY: Office of the Deputy Under Secretary of Defense (Civilian 
Personnel Policy) (DUSD (CPP)), (DoD)

ACTION: Notice of proposal to adopt a demonstration project plan and 
additional flexibilities.

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SUMMARY: The Office of Naval Research (ONR) proposes to adopt the Naval 
Research Laboratory (NRL) Personnel Management Demonstration Project 
with modifications and one flexibility from the U.S. Army Aviation and 
Missile Research, Development and Engineering Center (AMRDEC). The 
majority of flexibilities and administrative procedures are expected to 
be adopted without changes. However, modifications are made when 
necessary to address ONR's specific organizational, workforce, and 
approval needs; technical modifications to conform to changes in the 
law and governing Office of Personnel Management (OPM) regulations, 
which are not being waived, that were effected after the publication of 
the NRL personnel demonstration project plan; and changes in response 
to comments received during the 30-day comment period.

DATES: ONR's adoption proposal may not be implemented until a 30-day 
comment period is provided, comments addressed, and a final Federal 
Register notice published. To be considered, written comments must be 
submitted on or before June 28, 2010.

ADDRESSES: Send comments on or before the comment due date by mail to 
Ms. Betty A. Duffield, CPMS-PSSC, Suite B-200, 1400 Key Boulevard, 
Arlington, VA 22209-5144; by fax to (703) 696-5462; or by e-mail to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Office of Naval Research: Ms. Margaret 
J. Mitchell, Director, Human Resources Office, Office of Naval 
Research, 875 North Randolph Street, Code 01HR, Arlington, VA 22203; 
[email protected].
    DoD: Ms. Betty A. Duffield, CPMS-PSSC, Suite B-200, 1400 Key 
Boulevard, Arlington, VA 22209-5144.

SUPPLEMENTARY INFORMATION: Section 342(b) of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 1995, Public Law 103-337, 
as amended (10 U.S.C. 2358 note) by section 1109 of NDAA FY 2000, 
Public Law 106-65, and section 1114 of NDAA FY 2001, Public Law 106-
398, authorizes the Secretary of Defense (SECDEF) to conduct personnel 
management demonstration projects at DoD laboratories designated as 
Science and Technology Reinvention Laboratories (STRLs). Section 1107 
of NDAA FY 2008, Public Law 110-181, as amended by section 1109 of NDAA 
FY 2009, Public Law 110-417, requires the SECDEF to execute a process 
and plan to employ the personnel management demonstration project 
authorities granted to the Office of Personnel Management under title 5 
United States Code (U.S.C.) section 4703 at the STRLs previously 
enumerated in 5 U.S.C. 9902(c)(2), and now redesignated in section 1105 
of NDAA FY 2010, Public Law 111-84, 123 Stat. 2486, and 73 FR 73248, to 
enhance the performance of the missions of the laboratories. Section 
1107 of Public Law 110-181 further authorizes in subsection 1107(c) 
that any flexibility available to any demonstration laboratory shall be 
available for use at any other laboratory as previously enumerated in 
title 5 U.S.C. 9902(c)(2). The Office of Naval Research (ONR) is listed 
as one of the previously designated 5 U.S.C. 9902(c)(2) STRLs.

1. Background

    Since 1966, many studies of Department of Defense (DoD) 
laboratories have been conducted on laboratory quality and personnel. 
Almost all of these studies have recommended improvements in the 
civilian personnel policy, organization, and management. Pursuant to 
the authority provided in section 342(b) of Public Law 103-337, as 
amended, a number of DoD STRL personnel demonstration projects were 
approved. These projects are ``generally similar in nature'' to the 
Department of Navy's ``China Lake'' Personnel Demonstration Project. 
The terminology, ``generally similar in nature,'' does not imply an 
emulation of various features, but rather implies a similar opportunity 
and authority to develop personnel flexibilities that significantly 
increase the decision authority of laboratory department heads and/or 
directors.
    This demonstration project involves: (1) Streamlined delegated 
examining; (2) noncitizen hiring; (3) expanded detail authority; (4) 
extended probationary period for newly hired employees; (5) expanded 
temporary promotion; (6) voluntary emeritus program; (7) paybanding; 
(8) contribution-based compensation system; (9) performance-based 
reduction-in-pay or removal actions; and (10) reduction-in-force (RIF) 
procedures.

2. Overview

    DoD published notice in 73 FR 73248, December 2, 2008, that 
pursuant to subsection 1107(c) of Public Law 110-181, the three STRLs 
listed in 73 FR 73248 not having personnel demonstration projects at 
that time may adopt the flexibilities of the other laboratories 
previously listed in subsection 9902(c)(2) and now redesignated in 
section 1105 of Public Law 111-84. ONR is one of the three STRLs 
specified in this provision.
    Accordingly, ONR intends to build its demonstration project using 
flexibilities adopted from existing STRL demonstration projects 
(specifically NRL and AMRDEC). Final plans for the NRL and AMRDEC 
personnel management demonstration projects were published in the 
Federal Register as follows:
     Department of the Navy: NRL--64 FR 33970, June 24, 1999. 
No amendments have been published; and
     Department of the Army: AMRDEC--62 FR 34876 and 62 FR 
34906, June 27, 1997; and amendments and/or corrections to final plans 
published--64 FR 11074, March 8, 1999; 64 FR 12216, March 11, 1999; 65 
FR 53142, August 31, 2000; and 67 FR 5716, February 6, 2002.

3. Access to Flexibilities of Other STRLs

    Flexibilities published in this Federal Register notice shall be 
available for use by the STRLs previously enumerated in 5 U.S.C. 
9902(c)(2), now redesignated in section 1105 of Public Law 111-84, if 
they wish to adopt them in accordance with DoD Instruction 1400.37; 73 
FR 73248 to 73252; and after the fulfilling of any collective 
bargaining obligations.

    Dated: May 21, 2010.
Mitchell S. Bryman,
Alternate OSD Federal Register Liaison Officer, Department of Defense.

Table of Contents

I. Executive Summary
II. Introduction
    A. Purpose
    B. Problems with the Current System
    C. Waivers Required
    D. Expected Benefits
    E. Participating Organizations and Employees
    F. Project Design
III. Accessions and Internal Placements
    A. Hiring Authority
    1. Background
    2. Delegated Examining
    B. Legal Authority

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    C. Determining Employee and Applicant Qualifications
    D. Noncitizen Hiring
    E. Expanded Detail Authority
    F. Extended Probationary Period
    G. Definitions
    1. Basic Pay
    2. Maintained Pay
    3. Promotion
    4. Reassignment
    5. Change to Lower Pay Band
    6. Pay Adjustment
    7. Detail
    8. Highest Previous Rate
    9. Approving Manager
    H. Pay Setting Determinations Outside the CCS
    1. External New Hires
    2. Internal Actions
    a. Promotion.
    b. Pay Adjustment (Voluntary Change to Lower Pay) or Change to 
Lower Pay Band (except RIF).
    c. Pay Adjustment (Involuntary Change to Lower Pay) or Change to 
Lower Pay Band Due to Adverse or Performance-based Action.
    d. Involuntary Change to Lower Pay Band or Reassignment to a 
Career Track with a Lower Salary Range, Other than Adverse or 
Performance-based.
    e. RIF Action (including employees who are offered and accept a 
vacancy at a lower pay band or in a different career track).
    f. Upward Mobility or Other Formal Training Program Selection.
    g. Return to Limited or Light Duty from a Disability as a Result 
of Occupational Injury to a Position in a Lower Pay Band or to a 
Career Track with Lower Basic Pay Potential than Held Prior to the 
Injury.
    h. Restoration to Duty.
    i. Reassignment.
    j. Student Educational Employment Program.
    k. Hazard Pay or Pay for Duty Involving Physical Hardship.
    I. Priority Placement Program (PPP)
    J. Expanded Temporary Promotion
    K. Voluntary Emeritus Program
IV. Sustainment
    A. Position Classification
    1. Career Tracks and Pay Bands
    a. Target Pay Band.
    b. Occupational Series and Position Titling.
    c. Classification Standards.
    d. Fair Labor Standards Act (FLSA).
    (1) Guidelines for FLSA Determinations.
    (2) Nonsupervisory and Leader Positions.
    (3) Supervisory Positions.
    2. Requirements Document (RD)
    3. Delegation of Classification Authority
    a. Delegated Authority.
    b. Position Classification Accountability.
    B. Integrated Pay Schedule
    1. Annual Pay Action
    2. Overtime Pay
    3. Classification Appeals
    4. Above GS-15 Positions
    5. Distinguished Contributions Allowance (DCA)
    a. Eligibility.
    b. Nomination.
    c. Reduction or Termination of a DCA.
    d. Lump-Sum DCA Payments.
    e. DCA Budget Allocation.
    f. Concurrent Monetary Payments.
    C. Contribution-Based Compensation System (CCS)
    1. General
    2. CCS Process
    3. Pay Pool Annual Planning
    a. Element Weights and Applicability.
    b. Supplemental Criteria.
    4. Annual CCS Appraisal Process (See Figure 7.)
    5. Exceptions
    6. Normal Pay Range (NPR)--Basic Pay Versus Contribution
    7. Compensation
    a. General Increases.
    b. Merit Increases.
    c. Locality Increases.
    d. Contribution Awards.
    8. Career Movement Based on CCS
    a. Advancements in Level Which May be Approved by the Pay Pool 
Manager.
    b. Advancements in Level Which Must be Approved by the Chief of 
Naval Research (CNR).
    c. Advancement to Level V of the Science and Engineering (S&E) 
Professional Career Track.
    9. CCS Grievance Procedures
V. Separations
    A. Performance-based Reduction-in-Pay or Removal Actions
    B. Reduction-in-Force (RIF) Procedures
    1. RIF Authority
    2. RIF Definitions
    a. Competition in RIF.
    b. Competitive Area.
    c. Competitive Level.
    d. Service Computation Date (SCD).
    (1). Federal SCD.
    (2) CCS Process Results.
    (3). Credit from Other Rating Systems.
    (4) RIF Cutoff Date.
    3. Displacement Rights
    a. Displacement Process
    b. Retention Standing
    c. Vacant Positions
    d. Ineligible for Displacement Rights
    e. Change to Lower Level due to an Adverse or Performance-based 
Action
    4. Notice Period
    5. RIF Appeals
    6. Separation Incentives
    7. Severance Pay
    8. Outplacement Assistance
VI. Demonstration Project Transition
    A.Initial Conversion or Movement to the Demonstration Project
    1. Placement into Career Tracks and Pay Bands
    2.Conversion of retained grade and pay employees
    3. WGI Buy-In
    4. Career Promotion Eligibility
    5. Conversion of Special Salary Rate Employees
    6. Conversion of Employees on Temporary Promotions
    7. Non-competitive Movement into the Demonstration Project
    B. CCS Start-Up
    C. Training
    1. Types of Training
    a. Employees.
    b. Supervisors and Managers.
    c. Support Personnel.
    D. New Hires into the Demonstration Project
    E. Conversion or Movement from Demonstration Project
    1. Grade Determination.
    2. Pay Setting
    3. Employees in Positions Classified Above GS-15
    4. Determining Date of Last Equivalent Increase
    C. Personnel Administration
    D. Automation
    E. Experimentation and Revision
VII. Demonstration Project Duration
VIII. Demonstration Project Evaluation Plan
    A. Overview
    B. Evaluation Model
IX. Demonstration Project Costs
    A. Cost Discipline
    B. Implementation Costs
X. Automation Support
    A. General
    B. Defense Civilian Personnel Data System (DCPDS)
    C. Core Document (COREDOC)
    D. RIF Support System (RIFSS)
    E. Contribution-based Compensation System Data System
Appendix A. Summary of Demonstration Project Features Adopted by ONR
Appendix B: Required Waivers to Laws and Regulations
Appendix C: Definitions of Career Tracks and Pay Bands
Appendix D: Table of Occupational Series Within Career Tracks
Appendix E: Classification and CCS Elements
Appendix F: Computation of the IPS and the NPR
Appendix G: Intervention Model

I. Executive Summary

    This project adopts with some modifications the STRL personnel 
management demonstration project designed by NRL and an additional 
flexibility from the AMRDEC personnel management demonstration project. 
The modified design of the demonstration project described herein was 
developed by ONR with the participation of and review by the DON, the 
DoD, and incorporation of the knowledge and design of other STRL 
demonstration projects.
    The ONR coordinates, executes, and promotes the science and 
technology programs of the United States Navy and Marine Corps. ONR's 
directorates balance a robust science and technology portfolio, 
allocating funds to meet the warfighter's requirements, focusing 
efforts on all three major phases of development funding: basic 
research, applied research, and advanced technology development. ONR's 
six science and technology departments coordinate and execute research 
in the areas of:
    1. Expeditionary Maneuver Warfare and Combating Terrorism

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    2. Command, Control, Communications, Intelligence, Surveillance, 
and Reconnaissance
    3. Ocean Battlespace Sensing
    4. Sea Warfare and Weapons
    5. Warfighter Performance
    6. Naval Air Warfare and Weapons
    In order to sustain these unique capabilities, ONR must be able to 
hire, retain, and continually motivate enthusiastic, innovative, and 
highly-educated scientists and engineers, supported by accomplished 
business management and administrative professionals as well as a 
skilled administrative and technical support staff.
    The goal of the project is to enhance the quality and 
professionalism of the ONR workforce through improvements in the 
efficiency and effectiveness of the human resource system. The project 
flexibilities will strive to achieve the best workforce for the ONR 
mission, adjust the workforce for change, and improve organizational 
efficiency. The results of the project will be evaluated within five 
years of implementation

II. Introduction

A. Purpose

    The purpose of the project is to demonstrate that the effectiveness 
of DoD STRLs can be enhanced by expanding opportunities available to 
employees and by allowing greater managerial control over personnel 
functions through a more responsive and flexible personnel system. 
Federal laboratories need more efficient, cost effective, and timely 
processes and methods to acquire and retain a highly creative, 
productive, educated, and trained workforce. This project, in its 
entirety, attempts to improve employees' opportunities and provide 
managers, at the lowest practical level, the authority, control, and 
flexibility needed to achieve the highest quality organization and hold 
them accountable for the proper exercise of this authority within the 
framework of an improved personnel management system.
    Many aspects of a demonstration project are experimental. 
Modifications may be made from time to time as experience is gained, 
results are analyzed, and conclusions are reached on how the system is 
working. The provisions of this project plan will not be modified, or 
extended to individuals or groups of employees not included in the 
project plan without the approval of the ODUSD(CPP). The provisions of 
DoDI 1400.37, are to be followed for any modifications, adoptions, or 
changes to this demonstration project plan.

B. Problems With the Current System

    The current Civil Service GS system has existed in essentially the 
same form since the 1920's. Work is classified into one of fifteen 
overlapping pay ranges that correspond with the fifteen grades. Base 
pay is set at one of those fifteen grades and the ten interim steps 
within each grade. The Classification Act of 1949 rigidly defines types 
of work by occupational series and grade, with very precise 
qualifications for each job. This system does not quickly or easily 
respond to new ways of designing work or to changes in the work itself.
    The performance management model that has existed since the passage 
of the Civil Service Reform Act has come under extreme criticism. 
Employees frequently report there is inadequate communication of 
performance expectations and feedback on performance. There are 
perceived inaccuracies in performance ratings with general agreement 
that the ratings are inflated and often unevenly distributed by grade, 
occupation, and geographic location.
    The need to change the current hiring system is essential as ONR 
must be able to recruit and retain scientific, engineering, acquisition 
support and other professionals, and skilled technicians. ONR must be 
able to compete with the private sector for the best talent and be able 
to make job offers in a timely manner with the attendant bonuses and 
incentives to attract high quality employees.
    Finally, current limitations on training, retraining, and otherwise 
developing employees make it difficult to correct skill imbalances and 
to prepare current employees for new lines of work to meet changing 
missions and emerging technologies.

C. Waivers Required

    ONR proposes changes in the following broad areas to address its 
problems in human resources management: Accessions and internal 
placements, sustainment, and separations. Appendix B lists the laws, 
rules, and regulations requiring waivers to enable ONR to implement the 
proposed systems. All personnel laws, rules, and regulations not waived 
by this plan will remain in effect. Basic employee rights will be 
safeguarded and Merit System Principles will be maintained.

D. Expected Benefits

    The primary benefit expected from this demonstration project is 
greater organizational effectiveness through increased employee 
satisfaction. The long-standing Department of the Navy ``China Lake'' 
and the National Institute of Standards and Technology (NIST) 
demonstration projects have produced impressive statistics on increased 
job satisfaction and quality of employees versus that for the Federal 
workforce in general. This project will demonstrate that a human 
resource system tailored to the mission and needs of the ONR workforce 
will facilitate:
    (1) Sustainment of ONR's quality scientific and business management 
workforces in today's competitive environment;
    (2) Improved employee satisfaction with pay setting and adjustment, 
recognition, and career advancement opportunities;
    (3) Human Resources (HR) flexibilities needed to staff and shape a 
quality workforce of the next 10-20 years;
    (4) Increased retention of high-level contributors; and
    (5) Simpler and more cost effective HR management processes.
    An evaluation model was developed for the Director, Defense, 
Research and Engineering (DDR&E) in conjunction with STRL service 
representatives and the OPM. The model will measure the effectiveness 
of this demonstration project, as modified in this plan, and will be 
used to measure the results of specific personnel system changes.

E. Participating Organizations and Employees

    ONR is comprised of the ONR Headquarters in Arlington, Virginia, 
and ONR employees geographically dispersed at the locations shown in 
Figure 1. It should be noted that some sites currently have fewer than 
ten people and that the sites may change should ONR reorganize or 
realign. Successor organizations will continue coverage in the 
demonstration project.
    The demonstration project will cover approximately 450 ONR civilian 
employees under title 5, U.S.C. in the occupations listed in Appendix 
D. The project plan does not cover members of the Senior Executive 
Service (SES), Senior Level (SL), Scientific and Professional (ST), 
expert and consultant employees (EH), or Administratively Determined 
(AD) pay plans. However, SES, SL, and ST employees, after leaving 
Federal government service, may participate in the Voluntary Emeritus 
Program. There are no labor unions representing ONR employees.

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[GRAPHIC] [TIFF OMITTED] TN28MY10.003

F. Project Design

    In response to the initial authority granted by Congress to develop 
a demonstration project, ONR chartered a design team to develop the 
project plan. The team was led by a senior ONR manager from outside the 
Human Resources Office (HRO) and was responsible for developing project 
proposals. The team was composed of 20 employees of different grade 
levels and in different occupations. There was a mix of managers, 
supervisors, and non-supervisors from offices throughout ONR. The team 
had the assistance of HR personnel from ONR and from NRL. It also 
received information and advice from OPM, the Office of the DUSD (CPP), 
and a number of organizations with on-going demonstration projects. 
Information and suggestions were solicited from ONR employees and 
managers through interviews, briefings, small-group meetings, and a 
suggestion program established specifically for the design effort. This 
plan was submitted to DUSD (CPP) in 2001. Work on this plan was 
postponed pending the outcome of several Departmental HR initiatives 
addressing new personnel systems.
    Following enactment of Public Law 110-181, ONR undertook an effort 
to review and resubmit the demonstration project plan. Upon extensive 
review and discussion with internal and external stakeholders, ONR 
leadership decided to adopt existing flexibilities according to 
subsection 1107(c) of Public Law 110-181, 73 FR 73248, and DoDI 
1400.37. Specifically, ONR proposes to adopt the NRL demonstration 
project plus an additional flexibility from the AMRDEC demonstration 
project. Appendix A summarizes the modifications proposed for each of 
the adopted project flexibilities and administrative procedures. 
Modifications to existing flexibilities are made when necessary to 
address ONR's specific organizational, workforce, and approval needs 
and technical modifications to conform to changes in the law and 
governing OPM regulations, which are not being waived, that were 
effected after the publication of the NRL personnel demonstration 
project plan. Further changes to the project plan may be made in 
response to comments received during the 30-day comment period 
following publication of this notice.

III. Accessions and Internal Placements

A. Hiring Authority

1. Background
    Private industry and academia are the principal recruiting sources 
for scientists and engineers at ONR. It is extremely difficult to make 
timely offers of employment to hard-to-find scientists and engineers. 
Even when a candidate is identified, he or she often finds another job 
opportunity before the lengthy recruitment process can be completed.
2. Delegated Examining
    a. Competitive service positions within the ONR Demonstration 
Project will be filled through Merit Staffing or under Delegated 
Examining.
    b. The ``Rule of Three'' will be eliminated. When there are no more 
than 15 qualified applicants and no preference eligibles, all eligible 
applicants are immediately referred to the selecting official without 
rating and ranking. Rating and ranking will be required only when the 
number of qualified candidates exceeds 15 or there is a mix of 
preference and nonpreference applicants. Statutes and regulations 
covering veterans' preference will be observed in the selection process 
and when rating and ranking are required. If the candidates are rated 
and ranked, a random number selection method using the application 
control number will be used to determine which applicants will be 
referred when scores are tied after the rating process. Veterans will 
be referred ahead of non-veterans with the same score.

B. Legal Authority

    For actions taken under the auspices of the ONR Demonstration 
Project, the legal authority, Public Law 103-337, will be used. For all 
other actions, ONR will continue to use the nature of action codes and 
legal authority codes prescribed by OPM, DoD, or DON.

C. Determining Employee and Applicant Qualifications

    Figure 2 displays the minimum General Schedule (GS) qualifications 
requirements for each career path and pay band level. Special DON or 
DoD requirements not covered by the OPM Qualification Standards 
Operating Manual for GS Positions, such as

[[Page 30202]]

Defense Acquisition Workforce Improvement Act (DAWIA) qualification 
requirements for acquisition positions, physical performance 
requirements for sea duty, work on board aircraft, etc., must be met.
[GRAPHIC] [TIFF OMITTED] TN28MY10.004

D. Noncitizen Hiring

    Where Executive Orders or other regulations limit hiring 
noncitizens, ONR will have the authority to approve the hiring of 
noncitizens into competitive service positions when qualified U.S. 
citizens are not available. Under the demonstration project, as with 
the current system, a noncitizen may be appointed only if it has been 
determined there are no qualified U.S. citizens. In order to make this 
determination, the position will be advertised extensively throughout 
the nation using paid advertisements in major newspapers or scientific 
journals, etc., as well as the ``normal'' recruiting methods. If a 
noncitizen is the only qualified candidate for the position, the 
candidate may be appointed. The selection is subject to approval by the 
Department Head or Director of the hiring organization. The 
demonstration project constitutes a delegated examining agreement from 
OPM for the purposes of 5 CFR 213.3102(bb).

E. Expanded Detail Authority

    Under the demonstration project, ONR's approving manager would have 
the authority:
    (1) To effect details up to one year to demonstration project 
positions without the current 120-day renewal requirement; and
    (2) To effect details to a higher level position in the 
demonstration project up to one year within a 24-month period without 
competition.
    Details beyond the one-year require the approval of the Chief of 
Naval Research or designee and are not subject to the 120-day renewal 
requirement.

F. Extended Probationary Period

    All current laws and regulations for the current probationary 
period are retained except that nonstatus candidates hired under the 
demonstration project in occupations where the nature of the work 
requires the manager to have more than one year to assess the 
employee's job performance will serve a three-year probationary period. 
Employees with veterans' preference will maintain their rights under 
current law and regulation.

G. Definitions

1. Basic Pay
    The total amount of pay received at the rate fixed through CCS 
adjustment for the position held by an employee including any merit 
increase but before any deductions and exclusive of additional pay of 
any other kind.
2. Maintained Pay
    An employee may be entitled to maintain his or her rate of basic 
pay if that rate exceeds the maximum rate of basic pay for his or her 
pay band as a result of certain personnel actions (as described in this 
plan). An employee's initial maintained pay rate is equal to the lesser 
of (1) the basic pay held by the employee at the time an action is 
taken which entitles the employee to maintain his or her pay or (2) 150 
percent of the maximum rate of basic pay of the pay band to which 
assigned. The employee is entitled to maintained pay for 2 years or 
until the employee's basic pay is equal to or more than the employee's 
maintained pay, whichever occurs first. Exceptions to the 2-year limit 
include employees on grade and pay retention ``grandfathered'' in upon 
initial conversion into the demonstration project, former special rate 
employees receiving maintained pay as a result of conversion into the 
project, and employees placed through

[[Page 30203]]

the priority placement programs. Employees will receive half of the 
across-the-board GS percentage increase in basic pay and the full 
locality pay increase while on maintained pay. Upon termination of 
maintained pay, the employee's basic pay will be adjusted according to 
the CCS appraisal process. If the employee's basic pay exceeds the 
maximum basic pay of his or her pay band upon expiration of the 2-year 
period, the employee's pay will not be reduced; the employee will be in 
the overcompensated range of basic pay category for CCS pay increase 
purposes, see Figure 9.
    Maintained pay shall cease to apply to an employee who: (1) Has a 
break in service of 1 workday or more; or (2) is demoted for personal 
cause or at the employee's request. The employee's maintained rate of 
pay is basic pay for purposes of locality pay (locality pay is basic 
pay for purposes of retirement, life insurance, premium pay, severance 
pay, advances in pay, workers' compensation, and lump-sum payments for 
annual leave but not for computing promotion increases). Employees 
promoted while on maintained pay may have their basic pay (excluding 
locality pay) set up to 20 percent greater than the maximum basic pay 
for their current pay band or retain their ``maintained pay,'' 
whichever is greater.
3. Promotion
    The movement of an employee to a higher pay band within the same 
career track or to a different career track and pay band in which the 
new pay band has a higher maximum basic salary rate than the pay band 
from which the employee is leaving.
4. Reassignment
    The movement of an employee from one position to another position 
within the same pay band in the same career track or to a position in 
another career track and pay band in which the new pay band has the 
same maximum basic salary rate as the pay band from which the employee 
is leaving.
5. Change to Lower Pay Band
    The movement of an employee to a lower pay band within the same 
career track or to a different career track and pay band in which the 
new pay band has a lower maximum basic salary range than the pay band 
from which the employee is leaving.
6. Pay Adjustment
    Any increase or decrease in an employee's rate of basic pay where 
there is no change in the employee's position. Termination of 
maintained pay is also a pay adjustment.
7. Detail
    The temporary assignment of an employee to a different 
demonstration project position for a specified period when the employee 
is expected to return to his or her regular duties at the end of the 
assignment. (An employee who is on detail is considered for pay and 
strength purposes to be permanently occupying his or her regular 
position.)
8. Highest Previous Rate
    ONR will establish maximum payable rate rules that parallel the 
rules in 5 CFR 531.202 and 531.203(c) and (d).
9. Approving Manager
    Managers at the directorate, division head, division 
superintendent, or directorate-level staff offices who have budget 
allocation/execution; position management; position classification; 
recruitment; and staffing authorities for their organization.

H. Pay Setting Determinations Outside the CCS

1. External New Hires
    a. This includes reinstatements. Initial basic pay for new 
appointees into the demonstration project may be set at any point 
within the basic pay range for the career track, occupation, and pay 
band to which appointed that is consistent with the special 
qualifications of the individual and the unique requirements of the 
position. These special qualifications may be consideration of 
education, training, experience, scarcity of qualified applicants, 
labor market considerations, programmatic urgency, or any combination 
thereof which is pertinent to the position to which appointed. Highest 
previous rate may be used to set the pay of new appointees into the 
demonstration project. (The approving manager authorizes the basic 
pay.)
    b. Transfers from within DoD and other Federal agencies will have 
their pay set using pay setting policy for internal actions based on 
the type of pay action.
    c. A recruitment or relocation bonus may be paid using the same 
provisions available for GS employees under 5 U.S.C. 5753. Employees 
placed through the DoD Priority Placement Program (PPP), the DON 
Reemployment Priority List (RPL), or the Federal Interagency Career 
Transition Assistance Plan are entitled to the last earned rate if they 
have been separated.
2. Internal Actions
    These actions cover employees within the demonstration project, 
including demonstration project employees who apply and are selected 
for a position within the project.
    a. Promotion.
    When an employee is promoted, the basic pay after promotion may be 
up to 20 percent greater than the employee's current basic pay. 
However, if the minimum rate of the new pay band is more than 20 
percent greater than the employee's current basic pay, then the minimum 
rate of the new pay band is the new basic pay. The employee's basic pay 
may not exceed the basic pay range of the new pay band. Highest 
previous rate may be applied, if appropriate. (The approving manager 
authorizes the basic pay.) Note: Most target pay band promotions will 
be accomplished through the CCS appraisal and pay adjustment process 
(see section IV.C.8).
    b. Pay Adjustment (Voluntary Change to Lower Pay) or Change to 
Lower Pay Band (except RIF).
    When an employee accepts a voluntary change to lower pay or lower 
pay band, basic pay may be set at any point within the pay band to 
which appointed, except that the new basic pay will not exceed the 
employee's current basic pay or the maximum basic pay of the pay band 
to which assigned, whichever is lower. Highest previous rate may be 
applied, if appropriate. (The approving manager authorizes the basic 
pay.)
    (1) Examples of Voluntary Change to a Lower Pay Band. An employee 
in an Administrative Specialist and Professional Career Track, Pay Band 
III, position may decide he or she would prefer a Pay Band II position 
in the Administrative Support Career Track because it offers a 
different work schedule or duty station. An employee in Level IV of the 
Administrative Specialist and Professional Career Track who has a 
family member with a serious medical problem and wants to be relieved 
of supervisory responsibilities may request a change to Pay Band III.
    (2) Example of Pay Adjustment (Voluntary Change to Lower Pay) or 
change to a Lower Pay Band. An employee may accept a change to lower 
pay or to a lower pay band through a settlement agreement. A Research 
Physicist, who is in Level III and is being paid near the top of Level 
III, is rated unacceptable in the critical element Research and 
Development (R&D) Business Management. In settlement of a proposal to 
remove this employee for unacceptable performance, an agreement is 
reached which reduces

[[Page 30204]]

the employee's pay to a rate near the beginning of Level III.
    c. Pay Adjustment (Involuntary Change to Lower Pay) or Change to 
Lower Pay Band Due to Adverse or Performance-based Action.
    When an employee is changed to a lower pay band, or receives a 
change to lower pay due to an adverse or performance-based action, the 
employee's basic pay will be reduced by at least 6 percent, but will be 
set at a rate within the rate range for the pay band to which assigned. 
(The approving manager authorizes the basic pay.) Such employees will 
be afforded appeal rights as provided by 5 U.S.C. 4303 or 7512, as 
appropriate.
    d. Involuntary Change to Lower Pay Band or Reassignment to a Career 
Track with a Lower Salary Range, Other than Adverse or Performance-
based.
    If the change is not a result of an adverse or performance-based 
action, the basic pay will be preserved to the extent possible within 
the basic pay range of the new pay band. If the pay cannot be set 
within the rate range of the new pay band, it will be set at the 
maximum rate of the new pay band and the employee's pay will be 
reduced. If the change is a result of a position reclassification 
resulting in the employee being assigned to a lower pay band or 
reassigned to a different career track with a lower maximum basic 
salary range, the employee is entitled to maintained pay if the 
employee's current salary exceeds the maximum rate for the new band.
    e. RIF Action (including employees who are offered and accept a 
vacancy at a lower pay band or in a different career track).
    The employee is entitled to maintained pay, if the employee's 
current salary exceeds the maximum rate for the new band.
    f. Upward Mobility or Other Formal Training Program Selection.
    The employee is entitled to maintained pay, if the employee's 
current salary exceeds the maximum rate for the new band.
    g. Return to Limited or Light Duty from a Disability as a Result of 
Occupational Injury to a Position in a Lower Pay Band or to a Career 
Track with Lower Basic Pay Potential than Held Prior to the Injury.
    The employee is entitled indefinitely to the basic pay held prior 
to the injury and will receive full general and locality pay increases. 
If upon reemployment, an employee was not given the higher basic pay 
(basic pay received at the time of the injury), any retirement annuity 
or severance pay computation would be based on his or her lower basic 
pay (salary based on placement in a lower pay band). Even though the 
Department of Labor (DOL) would make up the difference between the 
lower basic pay and the higher basic pay earned at the time of injury, 
the DOL portion is not considered in the retirement or severance pay 
computation.
    h. Restoration to Duty.
    Employees returning from the uniformed services following an 
absence of more than 30 days must be restored as soon as possible after 
making application, but not later than 30 days after receipt of 
application. If the employee's uniformed service was for less than 91 
days the employee will be placed in the position that he or she would 
have attained if continuously employed. If not qualified for this 
position, employee will be placed in the position he or she left. For 
service of 91 days or more, the employee may also be placed in a 
position of like seniority, status, and pay. In the case of an employee 
with a disability incurred in or aggravated during uniformed service, 
and after reasonable efforts to accommodate the disability is entitled 
to be placed in another position for which qualified that will provide 
the employee with the same seniority, status, and pay, or the nearest 
approximation.
    i. Reassignment.
    The basic pay normally remains the same. Highest previous rate may 
be applied, if appropriate. (The approving manager authorizes the basic 
pay).
    j. Student Educational Employment Program.
    The Student Educational Employment Program consists of two 
components: The Student Temporary Employment Program and the Student 
Career Experience Program. Initial basic pay for students in either of 
these programs may be set at any point within the basic pay range for 
the career track, occupation, and pay band to which appointed. Basic 
pay may be increased upon return to duty (RTD) or conversion to 
temporary appointment, in consideration of the student's additional 
education and experience at the time of the action. Students who work 
under a parallel work study program may have their basic pay increased 
in consideration of additional education and/or experience. Basic pay 
for students may be increased based on their CCS appraisal. (The 
approving manager authorizes the basic pay).
    k. Hazard Pay or Pay for Duty Involving Physical Hardship.
    Employees under the demonstration project will be paid hazardous 
duty pay under the provisions of 5 CFR part 550, subpart I.

I. Priority Placement Program (PPP)

    Current PPP procedures apply to new hires and internal actions.

J. Expanded Temporary Promotion

    Current regulations require that temporary promotions for more than 
120 days to a higher level position than previously held must be made 
competitively. Under the demonstration project, ONR would be able to 
effect temporary promotions of not more than one year within a 24-month 
period without competition to positions within the demonstration 
project.

K. Voluntary Emeritus Program

    The ONR Voluntary Emeritus Program is similar to the Voluntary 
Emeritus Program presented in the AMRDEC demonstration project FRN, 
section III.D.5., page 34890. Under the ONR program, the CNR will have 
the authority to offer retired or separated individuals voluntary 
assignments at ONR. This authority will include individuals who have 
retired or separated from Federal service. Voluntary Emeritus Program 
assignments are not considered ``employment'' by the Federal government 
(except for purposes of injury compensation). Thus, such assignments do 
not affect an employee's entitlement to buyouts or severance payments 
based on an earlier separation from Federal service. The Voluntary 
Emeritus Program will ensure continued quality research while reducing 
the overall salary line by allowing higher paid individuals to accept 
retirement incentives with the opportunity to retain a presence in the 
scientific community. The program will be of most benefit during 
manpower reductions as senior employees could accept retirement and 
return to provide valuable on-the-job training or mentoring to less 
experienced employees. Voluntary service will not be used to replace 
any employee or interfere with career opportunities of employees.
    To be accepted into the emeritus program, a volunteer must be 
recommended by ONR managers to the CNR or designee. Everyone who 
applies is not entitled to a voluntary assignment. The approving 
official must clearly document the decision process for each applicant 
(whether accepted or rejected) and retain the documentation throughout 
the assignment. Documentation of rejections will be maintained for two 
years.
    To ensure success and encourage participation, the volunteer's 
Federal retirement pay (whether military or

[[Page 30205]]

civilian) will not be affected while serving in a voluntary capacity. 
Retired or separated Federal employees may accept an emeritus position 
without a break or mandatory waiting period.
    Volunteers will not be permitted to monitor contracts on behalf of 
the government or to participate on any contracts or solicitations 
where a conflict of interest exists. The same rules that currently 
apply to source selection members will apply to volunteers.
    An agreement will be established between the volunteer, the CNR or 
designee, and the HRO Director. The agreement will be reviewed by the 
local Legal Office for ethics determinations under the Joint Ethics 
Regulation. The agreement must be finalized before the assumption of 
duties and shall include:
    (1) A statement that the voluntary assignment does not constitute 
an appointment in the civil service, is without compensation, and any 
and all claims against the Government (because of the voluntary 
assignment) are waived by the volunteer;
    (2) a statement that the volunteer will be considered a Federal 
employee for the purpose of injury compensation;
    (3) volunteer's work schedule;
    (4) length of agreement (defined by length of project or time 
defined by weeks, months, or years);
    (5) support provided by the ONR (travel, administrative, office 
space, supplies);
    (6) a one-page Statement of Duties and Experience;
    (7) a provision that states 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;
    (8) a provision allowing either party to void the agreement with 10 
working days written notice; and
    (9) the level of security access required (any security clearance 
required by the assignment will be managed by the ONR while the 
volunteer is a member of the Voluntary Emeritus Program).

IV. Sustainment

A. Position Classification

    The position classification changes are intended to streamline and 
simplify the process of identifying and categorizing the work done at 
ONR. ONR will establish an Integrated Pay Schedule (IPS) for all 
demonstration project positions in covered occupations. The IPS will 
replace the current GS and extend the pay schedule equivalent to the 
basic pay range of the Government's Senior Level Pay System to 
accommodate positions classified above the GS-15 level under a proposed 
new STRL demonstration project initiative being developed by DoD.
1. Career Tracks and Pay Bands
    Within the IPS, occupations with similar characteristics will be 
grouped together into four career tracks. Each career track consists of 
a number of pay bands, representing the phases of career progression 
that are typical for the respective career track. The pay bands within 
each career track are shown in Figure 3, along with their GS 
equivalents. The equivalents are based on the levels of responsibility 
as defined in 5 U.S.C. 5104 and not on current basic pay schedules. 
Appendix C provides definitions for each of the career tracks and the 
pay bands within them. The career tracks and pay bands were developed 
based upon administrative, organizational, and position management 
considerations at ONR. They are designed to enhance pay equity and 
enable a more seamless career progression to the target pay band for an 
individual position or category of positions. This combination of 
career tracks and pay bands allows for competitive recruitment of 
quality candidates at differing rates of compensation within the 
appropriate career track, occupation, and pay band. It will also 
facilitate movement and placement based upon contribution, in 
conjunction with the CCS described in paragraph IV.C. Other benefits of 
this arrangement include a dual career track for S&E employees and 
greater competitiveness with academia and private industry for 
recruitment. Appendix D identifies the occupational series currently 
within each of the three career tracks.
[GRAPHIC] [TIFF OMITTED] TN28MY10.005

    a. Target Pay Band.
    Each position will have a designated target pay band under the 
demonstration project. This target pay band will be identified as the 
pay band to which an incumbent may be advanced without further 
competition within a career track. These target pay bands will be based 
upon present full performance levels. Target pay bands may vary based 
upon occupation or career track. Employees' basic pay will be capped at 
the target pay band until other appropriate conditions (e.g., 
competition, position management approval, increase in or acquisition 
of higher level duties, and approval of an accretion of duties 
promotion) have been met, and the employee has been promoted into the 
next higher level.
    b. Occupational Series and Position Titling.
    Presently, ONR positions are identified by occupational groups and 
series of classes in accordance with OPM position classification 
standards. Under the demonstration project, ONR will continue to use 
occupational series designators consistent with those currently 
authorized by OPM to identify positions. This will facilitate related 
personnel management requirements, such as movement into and out of the

[[Page 30206]]

demonstration project. Other occupational series may be added or 
deleted as needed to support the demonstration project. 
Interdisciplinary positions will be accommodated within the system 
based upon the qualifications of the individual hired.
    Titling practices consistent with those established by OPM 
classification standards will be used to determine the official title. 
Such practice will facilitate other personnel management requirements, 
such as the following: Movement into and out of the demonstration 
project, reduction in force, external reporting requirements, and 
recruitment. CCS pay band descriptors and Requirements Document (RD) 
(see paragraph IV.A.2) information will be used for specific career 
track, pay band, and titling determinations.
    c. Classification Standards.
    Under the proposed demonstration project, the number of 
classification standards would be reduced to three (see Figure 3). Each 
standard would align with one of the three career tracks and would 
cover all positions within that career track. Each career track has two 
or three elements that are considered in both classifying a position 
and in judging an individual's contributions for pay setting purposes. 
Each element has generic descriptors for every pay band. These 
descriptors explain the type of work, degree of responsibility, and 
scope of contributions that need to be ultimately accomplished to reach 
the highest basic pay potential within each pay band. (See Appendix E.) 
To classify a position, a manager would select the pay band which is 
most indicative overall of the type of duties to be performed and the 
contributions needed. For example: A supervisor needs a secretarial 
position for a branch. In reading the elements and descriptors for the 
Administrative Support Career Track, the supervisor determines that the 
Level II descriptors illustrate the type of work and contributions 
needed. Therefore, the position would be classified as a Secretary, 
Level II.
    d. Fair Labor Standards Act (FLSA).
    Demonstration project positions will be covered under the FLSA and 
5 CFR part 551. Determination of their status (exempt or nonexempt) 
will be made based on the criteria contained in 5 CFR part 551. The 
status of each new position under the demonstration project will be 
determined using computer assisted analysis as part of an automated 
process for preparing the RD. Those positions for which the computer is 
unable to make the final FLSA determination will be ``flagged'' for 
referral to a human resources specialist for determination.
    (1) Guidelines for FLSA Determinations.
    i. Supervisory Information: Provided through an automated system in 
a checklist format; results of this checklist have an impact on FLSA 
determination.
    ii. FLSA Information: Provided through an automated system in a 
checklist format; results of this checklist in conjunction with the 
supervisory information provide a basis for the FLSA determination.
    iii. If required, the section entitled ``Purpose of Position'' will 
be used to assist in FLSA determination.
    iv. RD's requiring additional review before being finalized will be 
forwarded to a human resources specialist to review the FLSA 
determination.
    (2) Nonsupervisory and Leader Positions.
    Figure 4 shows the exempt or nonexempt status applicable to 
nonsupervisory and leader positions in the indicated career track and 
pay band. In those cases where ``Review'' is indicated, the FLSA status 
must be determined based on the specific duties and responsibilities of 
the subject position.
[GRAPHIC] [TIFF OMITTED] TN28MY10.006

    (3) Supervisory Positions.
    FLSA determination for supervisory positions must be made based on 
the duties and responsibilities of the particular position involved. As 
a rule, if a position requires supervision of employees who are exempt 
under FLSA, the supervisory position is likely to be exempt also.
2. Requirements Document (RD)
    An RD will replace the Optional Form 8 and position description 
used under the current classification system. The RD will be prepared 
by managers using a menu-driven, automated system. The automated system 
will enable managers to classify and establish many positions without 
intervention by a human resources specialist. The abbreviated RD will 
combine the position information, staffing requirements, and 
contribution expectations into a 1- or 2-page document.
3. Delegation of Classification Authority
    Classification authority will be delegated to managers as a means 
of increasing managerial effectiveness and expediting the 
classification function. This will be accomplished as follows:
    a. Delegated Authority.
    i. The CNR will delegate classification authority to the Human 
Resources Office (HRO) Director. The HRO Director may further delegate 
authority to Department Heads and Directors of

[[Page 30207]]

the immediate organization of the position being classified.
    ii. The classification approval must be at least one level above 
the first-level supervisor of the position.
    iii. First-line supervisors at any level will provide 
classification recommendations.
    iv. HRO support will be available for guidance and recommendations 
concerning the classification process. (Any dispute over the proper 
classification between a manager and the HRO will be resolved by the 
CNR or designee.
    b. Position Classification Accountability.
    Those to whom authority is delegated are accountable to the CNR. 
The CNR is accountable to the DON. Those with delegated authority are 
expected to comply with demonstration project guidelines on 
classification and position management, observe the principle of equal 
pay for equal work, and ensure that RD's are current. First-line 
supervisors will develop positions using the automated system. All 
positions must be approved through the proper chain of command.

B. Integrated Pay Schedule

    Under the demonstration project, an IPS will be established which 
will cover all demonstration project positions at ONR. This IPS, which 
does not include locality pay, will initially extend from the basic pay 
for GS-1, step 1 to the basic pay for GS-15, step 10. The adjusted 
basic pay cap, which does include locality pay, is Executive Level IV, 
currently $155,500. The salary range for the S&E pay band V pay band is 
expected to be established under the new STRL demonstration project 
initiative being developed for positions classified above GS-15.
1. Annual Pay Action
    ONR will eliminate separate pay actions for within-grade increases, 
general and locality pay increases, performance awards, quality step 
increases, and most career promotions and replace them with a single 
annual pay action (including either permanent or bonus pay or both) 
linked to the CCS. This will eliminate the paperwork and processing 
associated with multiple pay actions which average three per employee 
per year.
2. Overtime Pay
    Overtime will be paid in accordance with 5 CFR part 550, subpart A. 
All nonexempt employees will be paid overtime based upon their ``hourly 
regular rate of pay,'' as defined in existing regulation (5 CFR part 
551).
3. Classification Appeals
    An employee may appeal the occupational series, title, career 
track, or pay band of his or her position at any time. An employee must 
formally raise the area 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 DoD appellate level. If an employee is not satisfied with the DoD 
response, he or she may then appeal to the OPM only after DoD has 
rendered a decision under the provisions of this demonstration project. 
Since OPM does not accept classification appeals on positions which 
exceed the equivalent of a GS-15 level, appeal decisions involving Pay 
Band V for science and engineering positions classified about the GS-15 
level will be rendered by DoD and will be final. Appellate decisions 
from OPM are final and binding on all administrative, certifying, 
payroll, disbursing, and accounting officials of the Government. Time 
periods for case processing under 5 CFR subpart F, sections 511.603, 
511.604, and 511.605 apply.
    An employee may not appeal the accuracy of the RD, the 
demonstration project classification criteria, or the pay-setting 
criteria; the propriety of a basic pay schedule; the assignment of 
occupational series to the occupational family; 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 HRO 
and will include copies of appropriate demonstration project criteria.
4. Above GS-15 Positions
    The pay banding plan for the Scientific and Engineering 
occupational family includes a pay band V to provide the ability to 
accommodate positions with duties and responsibilities that exceed the 
General Schedule GS-15 classification criteria. This pay band is based 
on the Above GS-15 Position concept found in other STRL personnel 
management demonstration projects that was created to solve a critical 
classification problem. The STRLs have positions warranting 
classification above GS-15 because of their technical expertise 
requirements including inherent supervisory and managerial 
responsibilities. However, these positions are not considered to be 
appropriately classified as Scientific and Professional Positions (STs) 
because of the degree of supervision and level of managerial 
responsibilities. Neither are these positions appropriately classified 
as Senior Executive Service (SES) positions because of their 
requirement for advanced specialized scientific or engineering 
expertise and because the positions are not at the level of general 
managerial authority and impact required for an SES position.
    The original Above GS-15 Position concept was to be tested for a 
five-year period. The number of trial positions was set at 40 with 
periodic reviews to determine appropriate position requirements. The 
Above GS-15 Position concept is currently being evaluated by DoD 
management for its effectiveness; continued applicability to the 
current STRL scientific, engineering, and technology workforce needs; 
and appropriate allocation of billets based on mission requirements. 
The degree to which ONR plans to participate in this concept and 
develop classification, compensation, and performance management 
policy, guidance, and implementation processes will be based on the 
final outcome of the DoD evaluation.
5. Distinguished Contributions Allowance (DCA)
    The DCA is a temporary monetary allowance up to 25 percent of basic 
pay (which, when added to an employee's rate of basic pay, may not 
exceed the rate of basic pay for Executive Level IV) paid on either a 
bi-weekly basis (concurrent with normal pay days) or as a lump sum 
following completion of a designated contribution period(s), or 
combination of these, at the discretion of ONR. It is not basic pay for 
any purpose, i.e., retirement, life insurance, severance pay, 
promotion, or any other payment or benefit calculated as a percentage 
of basic pay. The DCA will be available to certain employees at the top 
of their target pay bands, whose present contributions are worthy of 
scores found at a higher pay band, whose level of contribution is 
expected to continue at the higher pay band for at least 1 year, and 
current market conditions require additional compensation.
    Assignment of the DCA rather than a change to a higher pay band 
will generally be appropriate for such employees under the following 
circumstances: Employees have reached the top of their target pay bands 
and (1) when it is not certain that the higher level contributions will 
continue indefinitely (e.g., a special project expected to be of one- 
up to five-year

[[Page 30208]]

duration); (2) when no further promotion or compensation opportunities 
are available; (3) in either situation (1) or (2), current market 
conditions compensate similar contributions at a greater rate in like 
positions in private industry and academia; and (4) there is a history 
of significant recruitment and retention difficulties associated with 
such positions.
    a. Eligibility.
    (1) Employees in Levels III and IV of the S&E Professional Career 
Track and those in Levels III, IV, and V of the Administrative 
Specialist and Professional Career Track are eligible for the DCA if 
they have reached the top CCS score for their target pay band with 
recommendations for a higher Overall Contribution Score (OCS) for their 
contributions; they have reached the maximum rate of basic pay 
available for their target pay band; there are externally imposed 
limits to higher pay bands or the higher level contributions are not 
expected to last indefinitely; and market conditions require greater 
compensation for these contributions.
    (2) Employees may receive a DCA for up to three years. The DCA 
authorization will be reviewed and reauthorized as necessary, but at 
least annually at the time of the CCS appraisal through nomination by 
the pay pool manager and approval by the CNR. Employees in the S&E 
Professional Career Track may receive an extension of up to two 
additional years (for a total of five years). The DCA extension 
authorization will be reviewed and reauthorized as necessary, but at 
least on an annual basis at the time of the CCS appraisal through 
nomination by the pay pool manager and approval by the CNR.
    (3) Monetary payment may be up to 25 percent of basic pay.
    (4) Nominees would be required to sign a memorandum of 
understanding or a statement indicating they understand that the DCA is 
a temporary allowance; it is not a part of basic pay for any purpose; 
it would be subject to review at any time, but at least on an annual 
basis; and the reduction or termination of the DCA is not appealable or 
grievable.
    b. Nomination.
    In connection with the annual CCS appraisal process, pay pool 
managers may nominate eligible employees who meet the criteria for the 
DCA. Packages containing the recommended amount and method of payment 
of the DCA and a justification for the allowance will be forwarded 
through the supervisory chain to the CNR. Details regarding this 
process will be addressed in standard operating procedures. These 
details will include time frames for nomination and consideration, 
payout scheme, justification content and format, budget authority, 
guidelines for selecting employees for the allowance and for 
determining the appropriate amount, and documentation required by the 
employee acknowledging he or she understands the criteria and temporary 
nature of the DCA.
    c. Reduction or Termination of a DCA.
    (1) A DCA may be reduced or terminated at any time the ONR deems 
appropriate (e.g., when the special project upon which the DCA was 
based ends; if performance or contributions decrease significantly; or 
if labor market conditions change, etc.). The reduction or termination 
of a DCA is not appealable or grievable.
    (2) If an employee voluntarily separates from ONR before the 
expiration of the DCA, an employee may be denied DCA payment. Authority 
to establish conditions and/or penalties will be spelled out in the 
written authorization of an individual's DCA.
    d. Lump-Sum DCA Payments.
    (1) When ONR chooses to pay part or all of an employee's DCA as a 
lump sum payable at the end of a designated period, the employee will 
accrue entitlement to a growing lump-sum balance each pay period. The 
percentage rate established for the lump-sum DCA will be multiplied by 
the employee's biweekly amount of basic pay to determine the lump sum 
accrual for any pay period. This lump-sum percentage rate is included 
in applying the 25 percent limitation.
    (2) If an employee covered under a lump-sum DCA authorization 
separates, or the DCA is terminated (see paragraph c), before the end 
of that designated period, the employee may be entitled to payment of 
the accrued and unpaid balance under the conditions established by ONR. 
ONR may establish conditions governing lump-sum payments (including 
penalties in cases such as voluntary separation or separation for 
personal cause) in general plan policies or in the individual 
employee's DCA authorization.
    e. DCA Budget Allocation.
    The CNR may establish a total DCA budget allocation that is never 
greater than 10 percent of the basic salaries of the employees 
currently at the cap in the S&E Professional Career Track, Pay Bands 
III and IV, and the Administrative Specialist and Professional Career 
Track, Pay Bands III, IV, and V.
    f. Concurrent Monetary Payments.
    Employees eligible for a DCA may be authorized to receive a DCA and 
a retention allowance at the same time, up to a combined total of 25 
percent of basic pay. A merit increase which raises an employee's pay 
to the top rate for his or her target pay band (thus making the 
employee eligible for the DCA) may be granted concurrent with the DCA. 
Receipt of the DCA does not preclude an employee from being granted any 
award (including a contribution award) for which he or she is otherwise 
eligible.

C. Contribution-Based Compensation System (CCS)

1. General
    The purpose of the CCS is to provide an effective means for 
evaluating and compensating the ONR workforce. It provides management, 
at the lowest practical level, the authority, control, and flexibility 
needed to develop a highly competent, motivated, and productive 
workforce. CCS will promote increased fairness and consistency in the 
appraisal process, facilitate natural career progression for employees, 
and provide an understandable basis for career progression by linking 
contribution to basic pay determinations.
    CCS combines performance appraisal and job classification into one 
annual process. At the end of each CCS appraisal period, basic pay 
adjustment decisions are made based on each employee's actual 
contribution to the organization's mission during the period. A 
separate function of the process includes comparison of performance in 
critical elements to acceptable standards to identify unacceptable 
performance that may warrant corrective action in accordance with 5 CFR 
part 432. Supervisory officials determine scores to reflect each 
employee's contribution, considering both how well and at what level 
the employee is performing. Often the two considerations are 
inseparable. For example, an employee whose written documents need to 
be returned for rework more often than those of his or her peers also 
likely requires a closer level of oversight, an important factor when 
considering level of pay.
    The performance planning and rating portions of the demonstration 
project's appraisal process constitute a performance appraisal program 
which complies with 5 CFR part 430 and the DoD Performance Management 
System, except where waivers have been approved. Performance-related 
actions initiated prior to implementation of the demonstration project 
(under DON performance management regulations) shall continue to be 
processed in accordance with the provisions of the appropriate system.

[[Page 30209]]

2. CCS Process
    CCS measures employee contributions by breaking down the jobs in 
each career track using a common set of ``elements.'' The elements for 
each career track shown in Figure 5 and described in detail in Appendix 
E have been initially identified for evaluating the contributions of 
ONR personnel covered by this initiative. They are designed to capture 
the highest level of the primary content of the jobs in each pay band 
of each career track. Within specific parameters, elements may be 
weighted or even determined to be not applicable for certain categories 
of positions. All elements applicable to the position are critical as 
defined by 5 CFR part 430.
[GRAPHIC] [TIFF OMITTED] TN28MY10.007

    For each element, ``Discriminators'' and ``Descriptors'' are 
provided to assist in distinguishing low to high contributions. The 
discriminators (two to four for each element) break down aspects of 
work to be measured within the element. The descriptors (one for each 
pay band for each discriminator) define the expected level of 
contribution at the top of the related pay band for that element.
    Scores currently range between 0 and 92; specific relationships 
between scores and pay bands are different for each career track. (See 
Figure 6.) Basic pay adjustments are based on a comparison of the 
employee's level of contribution to the normal pay range for that 
contribution and the employee's present rate of basic pay.

[[Page 30210]]

[GRAPHIC] [TIFF OMITTED] TN28MY10.008

    Supervisors and pay pool panels determine an employee's 
contribution level for each element considering the discriminators as 
appropriate to the position. A contribution score, available to that 
level, is assigned accordingly. For example, a scientist whose 
contribution in the Technical Problem Solving element for S&E 
Professionals is determined to be at Level II may be assigned a score 
of 18 to 47. Eighteen reflects the lowest level of responsibility, 
exercise of independent judgment, and scope of contribution; and 47 
reflects the highest. For Level III contributions, a value of 44 to 66 
may be assigned. Each higher pay band equates to a higher range of 
values with the total points available to S&E Professionals to be 
determined based on the salary range for pay band V under the proposed 
DoD above GS-15 position initiative. Each element is judged separately 
and level of work may vary for different elements. The scores for each 
element are then averaged to determine the Overall Contribution Score 
(OCS).
    The CCS process will be carried out within pay pools made up of 
combined ONR organizations. The organizations in each pay pool will be 
combined based on criteria such as similarity of work and chain of 
command. To facilitate equity and consistency, element weights and 
applicability and CCS score adjustments are determined by a pay pool 
panel, rather than by individual supervisors. Basic pay adjustments, 
contribution awards, and DCA's may be recommended by the pay pool panel 
or by individual supervisors. Pay pool panels will consist of 
Department Heads and Directors, or other individuals who are familiar 
with the organization's work and the contributions of its employees. 
The Executive Director or designee will function as pay pool manager, 
with final authority to decide weights, scores, basic pay adjustments, 
and awards.
3. Pay Pool Annual Planning
    Prior to the beginning of each annual appraisal period, the pay 
pool manager and panel will review pay pool-wide expectations in the 
areas described below.
    a. Element Weights and Applicability.
    As written, all elements are weighted equally. If pay pool panels 
and managers decide that some elements are more important than others 
or that some do not apply at all to the effective accomplishment of the 
organization's mission, they may establish element weights including a 
weight of zero which renders the element not applicable. Element 
weights are not intended for application to individual employees. 
Instead, they may be established only for subcategories of positions, 
not to exceed a maximum of five subcategories in each career track. 
Subcategories for S&E Professionals might be: Supervisor, Program 
Manager, and Support S&E. Subcategories should include a minimum of 
five positions, when possible. Weights must be consistent within the 
subcategory.
    b. Supplemental Criteria.
    The CCS level descriptors are designed to be general so that they 
may be applied to all employees in the career track. Supervisors and 
pay pool panels may establish supplemental criteria to further inform 
employees of expected contributions. This may include (but is not 
limited to) examples of contributions which reflect work at each level 
for each element, taskings, objectives, and/or standards.
4. Annual CCS Appraisal Process (See Figure 7)

[[Page 30211]]

[GRAPHIC] [TIFF OMITTED] TN28MY10.009

    The ONR appraisal period will normally be one year, with a minimum 
appraisal period of 90 days. At the beginning of the appraisal period, 
or upon an employee's arrival at ONR or into a new position, the 
following information will be communicated to employees so that they 
are informed of the basis on which their performance and contributions 
will be assessed: Their career track and pay band; applicable elements, 
descriptors, and discriminators; element weights; any established 
supplemental criteria; OCS's which correspond to each employee's NPR 
(see section IV.C.6); and basic acceptable performance standards. The 
CCS Summary (Appendix E) will be used to facilitate and document this 
communication. All employees will be provided this information; 
however, employees in some situations may not receive CCS scores. These 
situations are described in section IV.C.5, Exceptions. The 
communication of information described by this paragraph constitutes 
performance planning as required by 5 CFR 430.206(b).
    Supervisor and employee discussion of organizational objectives, 
specific work assignments, and individual performance expectations (as 
needed), should be conducted on an ongoing basis. Either the supervisor 
or the employee may request a formal review during the appraisal 
period; otherwise, a documented review is required only at the end of 
the appraisal period.
    At the end of the appraisal period, employees will provide input 
describing their contributions by preparing a Yearly Accomplishment 
Report (YAR). Pay pool managers may exempt groups of positions from the 
requirement to submit YARs; in cases where YARs are not required, 
employees may submit them at their own discretion. Standard operating 
procedures will provide guidance for pay pools and employees on the 
content and format of YARs, and on other types of information about 
employee contributions which should be developed and considered by 
supervisors. This will include procedures for capturing contribution 
information regarding employees who serve on details, who change 
positions during the appraisal period, who are new to ONR, and other 
such circumstances.
    Supervisors will review the employee's YAR and other available 
information about the employee's contributions during the appraisal 
period and determine an initial CCS score for each element considering 
the discriminators as appropriate to the position. In addition, 
supervisors will determine whether the employee's performance was 
acceptable or unacceptable in each element when compared against the 
basic acceptable performance standards. The rating of the elements (all 
that are applicable are designated critical as defined by 5 CFR part 
430) will serve as the basis for assignment of a summary level of 
Acceptable or Unacceptable. If any element is rated unacceptable, the 
summary level will be Unacceptable; otherwise the summary level will be 
Acceptable. Unacceptable ratings must be reviewed and approved by a 
higher level than the first-level supervisor.
    If an employee changes positions during the last 90 days of the 
appraisal period, the losing supervisor will conduct a performance 
rating (i.e., rate each element Acceptable or Unacceptable and 
determine the summary level) at the time the employee moves to the new 
position. This will serve as the employee's rating of record. For 
employees who report to ONR during the last 90 days of the appraisal 
period, any close-out rating of Acceptable (or its equivalent) or 
better from another Government agency will serve as the employee's 
rating of record (the employee will be rated Acceptable). The 
determination of CCS scores and application of related pay adjustments 
for such employees is set forth in section IV.C.5, ``Exceptions.''
    The pay pool panel will meet to compare scores, make appropriate 
adjustments, and determine the final OCS for each employee. Final 
approval of CCS scores and element and summary ratings will rest with 
the pay pool manager (unless higher level approval is requested or 
deemed necessary). Supervisors will communicate the element scores, 
ratings, summary level, and OCS to each employee, and discuss the 
results and plans for continuing growth. Employees rated Unacceptable 
will be provided assistance to improve their performance (see paragraph 
V.A).

[[Page 30212]]

    The CCS process will be facilitated by an automated system, the 
Contribution-based Compensation System Data System (CCSDS). During the 
appraisal process, all scores and supervisory comments will be entered 
into the CCSDS. The CCSDS will provide supervisors, pay pool panel 
members, and pay pool managers with background information (e.g., YARS, 
employees' prior year scores and current basic pay) and spreadsheets to 
assist them in comparing contributions and determining scores. Records 
of employee appraisals will be maintained in the CCSDS, and the system 
will be able to produce a hard copy document for each employee which 
reflects his or her final approved score.
5. Exceptions
    All employees who have worked 90 days or more by the end of the 
appraisal period will receive a performance rating of record. However, 
in certain situations ONR does not consider the actual determination of 
CCS scores to be necessary. In other situations, it may not be feasible 
to determine a meaningful CCS score. Therefore, the determination of 
CCS scores will not be required for the following types of employees: 
(a) Employees on intermittent work schedules; (b) those on temporary 
appointments of one year or less; (c) those who work less than six 
months in an appraisal period (e.g., on extended absence due to 
illness); (d) those on long-term training for all or much of the 
appraisal period; (e) employees who have reported to ONR or to a new 
position during the 90 days prior to the end of the appraisal period; 
and (f) Student Educational Employment Program employees.
    If supervisors believe that the nature of such an employee's 
contributions provide a meaningful basis to determine a CCS score, they 
may appraise employees in the categories listed above, provided that 
the employee has worked at least 90 days in an ONR position during the 
appraisal period.
    Those employees mentioned above who are not appraised under CCS 
will not be eligible for merit increases or contribution awards. (This 
will affect the calculation of service credit for RIF (see section 
V.C.)). All employees listed above will be given full general and 
locality increases (as described in sections IV.C.7.a, ``General 
Increases,'' and IV.C.7.c, ``Locality Increases''). All employees are 
eligible for awards under ONR's Incentive Awards Program, such as ``On-
the-Spot'' and Special Act Awards, as appropriate.
6. Normal Pay Range (NPR)--Basic Pay Versus Contribution
    The CCS assumes a relationship between the assessed contribution of 
the employee and a normal range of pay. For all possible contribution 
scores available to employees, the NPR spans a basic pay range of 12 
percent. Employees who are compensated below the NPR for their assessed 
score are considered ``undercompensated,'' while employees compensated 
above the NPR are considered ``overcompensated.''
    The lower boundary of the NPR is initially established by fixing 
the basic pay equivalent to GS-1, step 1 (without locality pay), with a 
CCS score of zero. The upper boundary is fixed at the basic pay 
equivalent to GS-15, step 10 (without locality pay), with a CCS score 
of 80. The distance between these upper and lower boundaries for a 
given overall contribution score is 12 percent of basic pay for all 
available CCS scores. Using these constraints, the interval between 
scores is approximately 2.37 percent through the entire range of pay. 
The lines will be extended using the same interval so that the upper 
boundary of the normal range of basic pay accommodates the basic pay 
needed for the S&E Professional career track pay band V. (The actual 
end point will vary depending on any pay adjustment factors, e.g., 
general increase.) The formula used to derive the NPR may be adjusted 
in future years of the demonstration project. See Appendix F for 
further details regarding the formulation of the NPR.
    Each year the boundaries for the NPR plus the minimum and maximum 
rate of basic pay for each pay band will be adjusted by the amount of 
the across-the-board GS percentage increase granted to the Federal 
workforce. At the end of each annual appraisal period, employees' 
contribution scores will be determined by the CCS process described 
above, and then their overall contribution scores and current rates of 
basic pay will be plotted as a point on a graph along with the NPR. The 
position of the point relative to the NPR gives a relative measure of 
the degree of over- or undercompensation of the employee, as shown in 
Figure 8. Points which fall below the NPR indicate undercompensation; 
points which fall above the NPR indicate overcompensation.

[[Page 30213]]

[GRAPHIC] [TIFF OMITTED] TN28MY10.010

7. Compensation
    Presently, employee pay is established, adjusted, and/or augmented 
in a variety of ways, including general pay increases, locality pay 
increases, special rate adjustments, within-grade increases (WGI's), 
quality step increases (QSI's), performance awards, and promotions. 
Multiple pay changes in any given year (averaging three per employee) 
are costly to process and do not consider comprehensively the 
employee's contributions to the organization. Under the demonstration 
project, ONR will distribute the budget authority from the sources 
listed above into four pay categories: (1) General increase, (2) 
locality increase, (3) merit increase, and (4) contribution awards. 
From these pay categories, single annual pay actions would be 
authorized based primarily on employees' contributions. Competitive 
promotions will still be processed under a separate pay action; most 
career promotions will be processed under the CCS.
    In general, the goal of CCS is to pay in a manner consistent with 
employees' contributions or, in other words, migrate employees' basic 
pay closer to the NPR. One result may be a wider distribution of pay 
among employees for a given level of duties.
    After the CCS appraisal process has been completed and the 
employees' standing relative to the NPR has been determined, the pay 
pool manager, in consultation with the pay pool panel or other pay pool 
supervisory and staff officials, will determine the appropriate basic 
pay change and contribution award, if appropriate, for each employee. 
Standard operating procedures will provide guidance, including market 
salary reference data, to assist pay pool managers in making pay 
determinations. In most cases, the pay pool manager will approve basic 
pay changes and awards. In some cases, however, approval of a higher 
level official will be required. Figure 9 summarizes the eligibility 
criteria and applicable limits for each pay category.
[GRAPHIC] [TIFF OMITTED] TN28MY10.011

    The CCSDS will calculate each employee's OCS and his or her 
standing in relation to the NPR. The system will provide a framework to 
assist pay pool officials in selecting and implementing a payout 
scheme. It will alert

[[Page 30214]]

management to certain formal limits in granting pay increases; e.g., an 
employee may not receive a permanent increase above the maximum rate of 
basic pay for his or her pay band until a corresponding level change 
has been effected. Once basic pay and award decisions have been 
finalized and approved, the CCSDS will prepare the data file for 
processing the pay actions and maintain a consolidated record of CCS 
pay actions for all ONR demonstration project employees.
    a. General Increases.
    General increase budget authority will be available to pay pools as 
a straight percentage of employee salaries, as derived under 5 U.S.C. 
5303 or similar authority. Pay pool panels or managers may reduce or 
deny general pay increases for employees whose contributions are in the 
overcompensated category. (See Figure 9.) Such reduction or denial may 
not place an employee in the undercompensated category. An employee 
receiving maintained pay (except one receiving maintained pay for an 
occupational injury who receives a full general pay increase) will 
receive half of the across-the-board GS percentage increase in basic 
pay until the employee's basic pay is within the basic pay range 
assigned for their current position or for two years, whichever is 
less. ONR employees on pay retention at the time of demonstration 
project implementation or as a result of placement through the DON RPL, 
DoD PPP or the Federal Interagency Career Transition Assistance Plan 
will receive half of the across-the-board GS percentage increase until 
the employee's maintained pay is exceeded by the maximum rate for the 
employee's pay band or the maintained pay is ended due to a promotion. 
General increase authority not expended is available to either the 
merit increase or contribution award pay categories or both.
    b. Merit Increases.
    Merit increases will be calculated after the determination of 
employees' general increases. Merit increases may be granted to 
employees whose contribution places them in the ``normal'' or 
``undercompensated'' categories. (See Figure 9.) In general, the higher 
the range in which the employee is contributing compared to his or her 
basic pay, the higher the merit increase should be. However, the 
following limitations apply: A merit increase may not place any 
employee's basic pay (1) in the ``overcompensated'' category (as 
established by the NPR for the upcoming year, which has been adjusted 
by the amount of the new general increase); (2) in excess of 
established basic pay caps; (3) in excess of the maximum rate of basic 
pay for the individual's pay band (unless the employee is being 
concurrently advanced to the higher pay band); or (4) above any 
outside-imposed dollar limit. Merit increases for employees in the NPR 
will be limited to six percent of basic pay, not to exceed the upper 
limit of the NPR for the employee's score. In addition, merit increases 
for employees in the undercompensated range may not exceed six percent 
above the lower rail of the NPR, or 20 percent of basic pay without CNR 
or designee approval.
    The size of ONR's continuing pay fund is based on appropriate 
factors, including the following: (1) Historical spending for within-
grade increases, quality step increases, and in-level career promotions 
(with dynamic adjustments to account for changes in law or in staffing 
factors, e.g., average starting salaries and the distribution of 
employees among job categories and band levels); (2) labor market 
conditions and the need to recruit and retain a skilled workforce to 
meet the business needs of the organization; and (3) the fiscal 
condition of the organization. ONR will periodically review or will 
review every two to three years its continuing pay fund to determine if 
any adjustments are necessary.
    The amount of budget authority available to each pay pool will be 
determined annually by the CNR. Factors to be considered by the CNR in 
determining annual budget authority may include market salaries, 
mission priorities, and organizational growth. Because statistical 
variations will occur in year-to-year personnel growth, any unexpended 
merit increase authorities may be transferred to the Contribution 
Awards category.
    c. Locality Increases.
    All employees will be entitled to the locality pay increase 
authorized by law and regulation for their official duty station and/or 
position.
    d. Contribution Awards.
    Authority to pay contribution awards (lump-sum payments recognizing 
significant contributions) will be initially available to pay pools as 
a straight 1.5 percent of employees' basic pay (similar to the amount 
currently available for performance awards). The percentage rate may be 
adjusted in future years of the demonstration project. In addition, 
unexpended general increase and merit increase budget authorities may 
be used to augment the award category. Contribution awards may be 
granted to those employees whose contributions place them in the 
``normal'' or ``undercompensated'' category and to employees in the 
``overcompensated'' category who are on maintained pay. Standard 
operating procedures will provide guidance to pay pool managers in 
establishing and applying criteria to determine significant 
contributions which warrant awards. An award exceeding $10,000 requires 
CNR approval. (See Figure 9.) Pay pools may also grant time-off as a 
contribution award, in lieu of or in addition to cash.
8. Career Movement Based on CCS
    Movement through the pay bands will be determined by contribution 
and basic pay at the time of the annual CCS appraisal process.
    The ONR demonstration project is an integrated system that links 
level of work to be accomplished (as defined by a career track and pay 
band) with individual achievement of that work (as defined by an OCS) 
to establish the rate of appropriate compensation (as defined by the 
career track pay schedule) and to determine progression through the 
career track. This section addresses only changes in level which relate 
directly to the CCS determination.
    When an employee's OCS falls within three scores of the top score 
available to his or her current pay band, supervisors should consider 
whether it is appropriate to advance the employee to the next higher 
level (refer to IV.A.1.a for other criteria). If progression to the 
next higher level is deemed warranted, supporting documentation would 
be included with the CCS appraisal and forwarded through the 
appropriate channels for approval. If advancement is not considered 
appropriate at this time, the employee would remain in his or her 
current pay band. Future basic pay raises would be capped by the top of 
the employee's current pay band unless the employee progresses to the 
next higher pay band through a CCS-related promotion, an accretion of 
duties promotion, or a competitive promotion.
    a. Advancements in Level Which May be Approved by the Pay Pool 
Manager.
    Advancements to all levels except Level V of the S&E Professional 
Career Track may be approved by the pay pool manager.
    b. Advancements in Level Which Must be Approved by the CNR.
    Advancement to (1) levels outside target pay bands or established 
position management criteria; (2) Levels IV and V of the S&E 
Professional Career Track; and (3) Levels IV and V of the 
Administrative Specialist and Professional Career Track require 
approval by the CNR or his or her designee. Details regarding the 
process for nomination and consideration,

[[Page 30215]]

format, selection criteria, and other aspects of this process will be 
addressed in the standard operating procedures.
    c. Advancement to Level V of the Science and Engineering (S&E) 
Professional Career Track.
    Vacancies in this pay band will be filled in accordance with 
guidance issued by DoD.
    d. Regression to Lower Level. (See Figure 8, ``Employee A.'')
    If an employee is contributing less than expected for the level at 
which he or she is being paid, the individual may regress into a lower 
pay band through reduction or denial of general increases and 
ineligibility for merit increases. (This is possible because the NPR 
plus the minimum and maximum pay rates for each pay band will be 
adjusted upwards each year by the across-the-board GS percentage 
increase in basic pay.) If the employee's basic pay regresses to a 
point below the pay overlap area between his or her level and the next 
lower level, it will no longer be appropriate to designate him or her 
as being in the higher level. Therefore, the employee will be formally 
changed to the lower level. The employee will be informed of this 
change in writing, but procedural and appeal rights provided by 5 
U.S.C. 4303 and 7512 (and related OPM regulations) will not apply 
(except in the case of employees who have veterans' preference). ONR is 
providing for waivers of the statute and regulations for such actions. 
Further, because a change to lower level under such circumstances is 
not discretionary, the change may not be grieved under ONR's 
administrative grievance procedures.
9. CCS Grievance Procedures
    An employee may grieve the appraisal received under CCS using 
procedures specifically designed for CCS appraisals. Under these 
procedures, the employee's grievance will first be considered by the 
pay pool panel, who will recommend a decision to the pay pool manager. 
If the employee is not satisfied with the pay pool manager's decision, 
he or she may file a second-step grievance with the next higher level 
ONR management official. This official will render a final ONR decision 
on the grievance.
    The following are not grievable: pay actions resulting from CCS 
(receipt, non-receipt or amount of general increase, merit increase, 
DCA or contribution award); reductions in level without reduction in 
pay due to regression (see section IV.C.8.d); any action for which 
another appeal or complaint process exists.

V. Separations

A. Performance-Based Reduction-in-Pay or Removal Actions

    This section applies to reduction in pay or removal of 
demonstration project employees based solely on unacceptable 
performance. Adverse action procedures under 5 CFR part 752 remain 
unchanged.
    When a supervisor determines during or at the end of the appraisal 
period that the employee is not completing work assignments 
satisfactorily, the supervisor must make a determination as to whether 
the employee is performing unacceptably in one or more of the critical 
elements. All CCS elements applicable to the employee's position are 
critical as defined by 5 CFR part 430.
    Unacceptable performance determinations must be made by comparing 
the employee's performance to the acceptable performance standards 
established for elements.
    At any time during or at the end of the appraisal period that an 
employee's performance is determined to be unacceptable in one or more 
critical elements, the employee will be provided assistance in 
improving his or her performance. This will normally include clarifying 
(or further clarifying) the meaning of terms used in the acceptable 
performance standards (e.g., ``timely'' ``thorough research,'' and 
``overall high quality'') as they relate to the employee's specific 
responsibilities and assignments. An employee whose performance is 
unacceptable after he or she has been given a reasonable opportunity to 
improve may be removed or reduced in grade or level, in accordance with 
the provisions of 5 U.S.C. 4303 and related OPM regulations. Employees 
may also be removed or reduced in grade or level based on unacceptable 
performance under the provisions of 5 U.S.C. 7512. All procedural and 
appeal rights set forth in the applicable statute and related OPM 
regulations will be afforded to demonstration project employees removed 
or reduced in grade or level for unacceptable performance.

B. Reduction-in-Force (RIF) Procedures

1. RIF Authority
    Under the demonstration project, ONR would be delegated authority 
to approve RIF as defined in Secretary of the Navy Instruction 12351.5F 
or its successor and the use of separation pay incentives.
2. RIF Definitions
    a. Competition in RIF.
    When positions are abolished, employees are released from their 
retention levels in inverse order of their retention standing, 
beginning with the employee having the lowest standing. If an employee 
is reached for release from a retention level, he/she could have a 
right to be assigned to another position within their same career track 
and pay band or they could have a right to retreat to a position 
previously held.
    b. Competitive Area.
    A separate competitive area will be established by geographic 
location for all personnel included in the ONR demonstration project.
    c. Competitive Level.
    Positions in the same occupational pay band, which are similar 
enough in duties and qualifications that employees can perform the 
duties and responsibilities including the selective placement factor, 
if any, of any other position in the competitive level upon assignment 
to it, without any loss of productivity beyond what is normally 
expected.
    d. Service Computation Date (SCD).
    The employee's basic Federal SCD would be adjusted for CCS results 
credit.
    (1) Federal SCD.
    An employee's basic Federal SCD may be credited with up to 20 years 
credit based on the results of the CCS process. The CCS RIF Assessment 
Category would be used to determine the number of RIF years credited. 
The CCS RIF Assessment Category is the combination of the employee's 
standing under the CCS relative to the NPR and any merit increase, DCA, 
contribution award or promotion. Figure 10 shows the RIF years 
available for each CCS RIF Assessment Category [proposed revisions to 
the RIF Assessment Category are depicted].

                 Figure 10--CS RIF Assessment Categories
------------------------------------------------------------------------
                                                               RIF years
                     Assessment category                       available
------------------------------------------------------------------------
0 = Employees within the overcompensated range without any             0
 portion of a general increase..............................
1 = Employees receiving maintained pay or any portion of a            12
 general increase but no merit increase or contribution
 (cash/time off)............................................

[[Page 30216]]

 
2 = Employees (without a capped salary** or career                    16
 promotion) receiving a total compensation increase* of 6%
 or less or with a capped salary receiving a total
 compensation increase of 3% or less........................
3 = Employees receiving (1) a total compensation increase\*\          20
 greater than 6%; (2) a career promotion; or (3) with a
 capped salary\**\ receiving a total compensation increase
 greater than 3%............................................
------------------------------------------------------------------------
Final RIF Credit: Average of the three most recent CCS Process Results
 received during the 4-year period prior to the cutoff date.
------------------------------------------------------------------------
\*\ Total compensation includes merit increase, contribution award (cash/
  time off), and distinguished contributions allowance.
\**\ Capped means the employee has the maximum salary for the assigned
  pay band.

    (2) CCS Process Results.
    If an employee has fewer than three CCS process results, the value 
(RIF years available) of the actual number of process results on record 
will be divided by the number of actual process results on record. In 
cases where an employee has no actual CCS process results, the employee 
will be given the additional RIF CCS process results credit for the 
most common, or ``modal'' ONR demonstration project CCS RIF Assessment 
Category for the most recent CCS appraisal period.
    (3) Credit from Other Rating Systems.
    Employees who have been rated under different patterns of summary 
rating levels will receive RIF appraisal credit as follows:

--If there are any ratings to be credited for the RIF given under a 
rating system which includes one or more levels above fully successful 
(Level 3), employees will receive credit as follows: 12 years for Level 
3, 16 years for Level 4, or 20 years for Level 5; or
--If an employee comes from a system with no levels above Fully 
Successful (Level 3), they will receive credit based on the 
demonstration project's modal CCS RIF assessment category.
    (4). RIF Cutoff Date.
    To provide adequate time to properly determine employee retention 
standing, the cutoff date for use of new CCS process results is set at 
30 days prior to the date of issuance of RIF notices.
3. Displacement Rights
    a. Displacement Process.
    Once the position to be abolished has been identified, the 
incumbent of that position may displace another employee within the 
incumbent's current career track and pay band when the incumbent has a 
higher retention standing and is fully qualified for the position 
occupied by an employee with a lower standing. If there are no 
displacement rights within the incumbent's current career track and pay 
band, the incumbent may exercise his or her displacement rights to any 
position previously held in the next lower pay band, regardless of 
career track, when the position is held by an employee with a lower 
retention standing. In the case of all preference eligibles, they may 
displace up to the equivalent of three grades or intervals below the 
highest equivalent grade of their current pay band in the same or a 
different career track regardless of whether they previously held the 
position provided they are fully qualified for the position and the 
position is occupied by an employee with a lower retention standing. 
Preference eligibles with a compensable service connected disability of 
30 percent or more may displace an additional two GS grades or 
intervals (total of five grades) below the highest equivalent grade of 
their current pay band provided they have previously held the position 
and the position is occupied by an employee in the same subgroup with a 
later RIF service computation date.
    b. Retention Standing.
    Retention is based on tenure, veterans' preference, length of 
service, and CCS process results. Competing employees are listed on a 
retention register in the following order: Tenure I (career employees), 
Tenure II (career-conditional employees), and Tenure III (contingent 
employees). Each tenure group has three subgroups (30% or higher 
compensable veterans, other veterans, and non-veterans) and employees 
appear on the retention register in that order. Within each subgroup, 
employees are in order of years of service adjusted to include CCS 
process results.
    c. Vacant Positions.
    Assignment may be made to any available vacant position including 
those with promotion potential in the competitive area.
    d. Ineligible for Displacement Rights.
    Employees who have been notified in writing that their performance 
is considered to be unacceptable are ineligible for displacement 
rights.
    e. Change to Lower Level Due to an Adverse or Performance-based 
Action.
    An employee who has received a written decision to change him or 
her to a lower level due to an adverse or performance-based action will 
compete from the position to which he or she will be or has been 
demoted.
4. Notice Period
    The notice period and procedures in 5 CFR subpart H, section 
351.801 will be followed.
5. RIF Appeals
    Under the demonstration project, employees affected by a RIF 
action, other than a reassignment, maintain their right to appeal to 
the Merit Systems Protection Board if they feel the reason for the RIF 
is not valid or if they think the process or procedures were not 
properly applied.
6. Separation Incentives
    ONR will have delegated authority to approve separation incentives 
and will use the current calculation methodology of a lump sum payment 
equal to an employee's severance pay calculation or $25,000, whichever 
is less.
7. Severance Pay
    Employees will be covered by the severance pay rules in 5 CFR part 
550, subpart G, except that ONR will establish rules for determining a 
``reasonable offer'' according to the provisions of 5 CFR 536.104.
8. Outplacement Assistance
    All outplacement assistance currently available would be continued 
under the demonstration project.

VI. Demonstration Project Transition

A. Initial Conversion or Movement to the Demonstration Project

1. Placement Into Career Tracks and Pay Bands
    Conversion or movement of GS employees into the demonstration 
project will be into the career track and pay band which corresponds to 
the employee's current GS grade and basic pay. If conversion into the 
demonstration project is accompanied by a simultaneous change in the 
geographic location of the employee's

[[Page 30217]]

duty station, the employee's overall GS pay entitlements (including 
locality rate) in the new area will be determined before converting the 
employee's pay to the demonstration project pay system. Employees will 
be assured of placement within the new system without loss in total 
pay. Once under the demonstration project, employee progression through 
the career tracks and pay bands up to their target pay band is 
dependent upon contribution score, not upon previous methods (e.g., 
WGI's, QSI's, or career promotions as previously defined).
    ONR proposes the addition of language to clarify procedures for 
non-competitive placements into the demonstration project. 
Specifically, employees who enter the demonstration project after 
initial implementation by lateral transfer, reassignment, or 
realignment will be subject to the same pay conversion rules.
2. Conversion of Retained Grade and Pay Employees
    ONR's workforce will be grouped into career tracks and associated 
pay levels with designated pay ranges rather than the traditional grade 
and step. Therefore, grade and pay retention will be eliminated. ONR 
will grant ``maintained pay'' (as defined in section III.G.2, 
``Maintained Pay''), which is related to the current meaning of 
``retained pay'' but does not provide for indefinite retention of pay 
except in certain situations. Employees' currently on grade or pay 
retention will be immediately placed on maintained pay at their current 
rate of basic pay if this rate exceeds the maximum rate for their pay 
band and ``grandfathered'' in the appropriate pay band. Employees on 
grade retention will be placed in the pay band encompassing the grade 
of their current position. Employees will receive half of the across-
the-board GS percentage increase in basic pay and the full locality pay 
increase until their basic pay is within the appropriate basic pay 
range for their current position without time limitation.
3. WGI Buy-In
    The participation of all covered ONR employees in the demonstration 
project is mandatory. However, acceptance of the system by ONR 
employees is essential to the success of the demonstration project. 
Therefore, on the date that employees are converted to the project pay 
plans, they will be given a permanent increase in pay equal to the 
earned (time spent in step) portion of their next WGI based on the 
value of the WGI at the time of conversion so that they will not feel 
they are losing a pay entitlement accrued under the GS system. 
Employees will not be eligible for this basic pay increase if their 
current rating of record is unacceptable at the time of conversion. 
There will be no prorated payment for employees who are at step 10 or 
receiving a retained rate at the time of conversion into the 
demonstration project.
4. Career Promotion Eligibility
    ONR proposes to adopt MRMC's provisions for compensating employees 
who would have become eligible for career promotions during the first 
12 months of the demonstration project but for conversion to the 
demonstration project pay bands. Employees who qualify under this 
provision will receive pay increases for noncompetitive promotion 
equivalents when the grade level of the promotion is encompassed within 
the same pay band, the employee's performance warrants the promotion, 
and the promotion would have otherwise occurred during that period. 
Employees who receive an in-level promotion at the time of conversion 
will not receive a WGI Buy-In equivalent as defined above.
5. Conversion of Special Salary Rate Employees
    Employees who are in positions covered by a special salary rate 
prior to entering the demonstration project will no longer be 
considered special salary rate employees under the demonstration 
project. These employees will, therefore, be eligible for full locality 
pay. The adjusted salaries of these employees will not change. Rather, 
the employees will receive a new basic rate of pay computed by dividing 
their basic adjusted pay (higher of special salary rate or locality 
rate) by the locality pay factor for their area. A full locality 
adjustment will then be added to the new basic pay rate. Adverse action 
will not apply to the conversion process as there will be no change in 
total salary. However, if an employee's new basic pay rate after 
conversion to the demonstration project pay schedule exceeds the 
maximum basic pay authorized for the pay band, the employee will be 
granted maintained pay under paragraph III.G.2 until the employee's 
salary is within the range of the pay band. For example, an Electronics 
Engineer, GS-855-9, step 5, is paid $59,568 per annum in accordance 
with special GS salary rates as of January 2010 per Table Number: 0422. 
The employee is located in the locality area of Washington-Baltimore, 
DC-MD-VA-WV. Under the demonstration project, the computation of the 
engineer's new basic rate of pay with a full locality adjustment and 
WGI buy-in is computed as follows:
    a. Basic adjusted pay divided by locality pay factor = new basic 
rate of pay.
    b. New basic rate of pay multiplied by the full locality adjustment 
for current area = full locality adjustment amount for special rate 
employees.
    c. New basic rate of pay + WGI buy-in amount x locality pay factor 
= demonstration special rate for conversion.
6. Conversion of Employees on Temporary Promotions
    Employees who are on temporary promotions at the time of conversion 
will be returned to their grade and step of record prior to conversion. 
These employees will be converted to a pay band following the 
procedures described in Section IV.A.1. After conversion, the temporary 
promotion may be reinstated for the remainder of the original 120-day 
timeframe. If the grade of the temporary position is associated with a 
higher pay band, the employee will be temporarily placed in the 
appropriate higher band while on the temporary promotion, following the 
procedures described in Section II.A.5.b.i. After the temporary 
promotion has ended, the employee will be returned to the salary and 
pay band established upon conversion, following the procedures 
described in Section II.A.5.b.iv.
7. Non-Competitive Movement Into the Demonstration Project
    Employees who enter the demonstration project after initial 
implementation by lateral transfer, reassignment, or realignment will 
be subject to the same pay conversion rules and will, therefore, be 
eligible for full locality pay. Specifically, adjustments to the 
employee's basic pay for a step increase or a non-competitive career 
ladder promotion will be computed as a prorated share of the current 
value of the step or promotion increase based upon the number of full 
weeks an employee has completed toward the next higher step or grade at 
the time the employee moves into the project.

B. CCS Start-Up

    ONR expects to place employees on CCS elements, descriptors, 
discriminators, and standards around October 2010 with conversion to 
demonstration project pay plans before the end of April 2011. The CCS 
process will be used to appraise ONR employees at the end of the 2010-
2011 cycle which would occur on September 30, 2011. ONR expects the 
first CCS payout to

[[Page 30218]]

occur at the beginning of the first full pay period in January 2012.

C. Training

    An extensive training program is planned for everyone in the 
demonstration project including the supervisors, managers, and 
administrative staff. Training will be tailored, as discussed below, to 
fit the requirements of every employee included in the demonstration 
project and will address employee concerns as well as the benefits to 
employees. In addition, leadership training will be provided, as 
needed, to managers and supervisors as the new system places more 
responsibility and decision making authority on them. ONR training 
personnel will provide local coordination and facilities, supplemented 
by contractor support as needed. Training will be provided at the 
appropriate stage of the implementation process.
1. Types of Training
    Training packages will be developed to encompass all aspects of the 
project and validated prior to training the workforce. Specifically, 
training packages will be developed for the following groups of 
employees:
    a. Employees.
    ONR demonstration project employees will be provided an overview of 
the demonstration project and employee processes and responsibilities.
    b. Supervisors and Managers.
    Supervisors and managers under the demonstration project will be 
provided training in supervisory and managerial processes and 
responsibilities under the demonstration project.
    c. Support Personnel.
    Administrative support personnel, HRO personnel, financial 
management personnel, and Management Information Systems Staff will be 
provided training on administrative processes and responsibilities 
under the demonstration project.

D. New Hires Into the Demonstration Project

    The following steps will be followed to place employees (new hires) 
entering the system:
    1. The career track and pay band will be determined based upon the 
employee's education and experience in relation to the duties and 
responsibilities of the position in which he or she is being placed, 
consistent with OPM qualification standards.
    2. Basic pay will be set based upon available labor market 
considerations relative to special qualifications requirements, 
scarcity of qualified candidates, programmatic urgency, and education 
and experience of the new candidate.
    3. Employees placed through the DON RPL, the DoD PPP, or the 
Federal Interagency Career Transition Assistance Plan who are eligible 
for maintained pay will receive one half of the across-the-board GS 
percentage increase in basic pay and the full locality pay increase 
until the employee's basic pay is within the basic pay range of the 
career track and pay band to which assigned. Employees are eligible for 
maintained pay as long as there is no break in service and if the 
employee's rate of pay exceeds the maximum rate of his or her pay band.

E. Conversion or Movement From Demonstration Project

    In the event the demonstration project is terminated or employees 
leave the demonstration project through promotion, change to lower 
grade, reassignment or transfer, conversion back to the GS system may 
be necessary. 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. An employee will not be converted at a level which 
is lower than the GS grade held immediately prior to entering the 
Demonstration project; unless, since that time, the employee has 
undergone a reduction in pay band. The converted GS grade and rate will 
become the employee's actual GS grade and rate after leaving the 
demonstration project and will be used to determine the pay action and 
GS pay administration rules for employees who leave the project to 
accept a position in the traditional Civil Service system. The 
following procedures will be used to convert the employee's 
demonstration project pay band to a GS equivalent grade and the 
employee's demonstration project rate of pay to the GS equivalent rate 
of pay.
1. Grade Determination
    Employees will be converted to a GS grade based on a comparison of 
the employee's current adjusted rate of basic pay to the highest GS 
applicable rate range considering only those grade levels that are 
included in the employee's current pay band. The highest GS applicable 
rate range includes GS basic rates, locality rates, and special salary 
rates. Once a grade range is determined, the following procedures will 
be used to determine the GS grade:
    a. Identify the highest GS grade within the current pay band that 
accommodates the employee's adjusted rate of basic pay (including any 
locality payment).
    b. If the employee's adjusted rate of basic pay equals or exceeds 
the applicable step 4 rate of the identified highest GS grade, the 
employee is converted to that grade.
    c. If the employee's adjusted rate of basic pay is lower than the 
applicable step 4 of the highest grade, the employee is converted to 
the next lower grade.
    d. If under the above-described ``step 4'' rule, the employee's 
adjusted project rate exceeds the maximum rate of the grade assigned 
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 the 
next higher applicable grade.
    e. For two-grade interval occupations, conversion should not be 
made to an intervening (even) grade level below GS-11.
    f. Employees in Level IV of the Administrative Specialist and 
Professional Career Track will convert to the GS-13 level.
2. Pay Setting
    Pay conversion will be done before any geographic movement or other 
pay-related action that coincides with the employee's movement or 
conversion out of the demonstration project. The 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 as follows:
    a. The employee's demonstration project adjusted rate of pay 
(including locality) is converted to a rate on the highest applicable 
adjusted rate range for the converted GS grade. For example, if the 
highest applicable GS rate range for the employee is a special salary 
rate range, the applicable special rate salary table is used to convert 
the employee's pay.
    b. When converting an employee's pay, if the rate of pay falls 
between two steps of the conversion grade, the rate must be set at the 
higher step.
    c. Employees whose basic pay exceeds the maximum basic pay of the 
highest GS grade for their pay band will be converted to the highest 
grade and step in their pay band. Upon conversion, the maximum base pay 
will be at the step 10 level normally with no provision for retained 
pay.
3. Employees in Positions Classified Above GS-15
    Conversion and pay retention instructions for employees and

[[Page 30219]]

positions in Pay Band V of the S&E Professional Career Track will be 
contingent on guidance provided by DoD.
4. Determining Date of Last Equivalent Increase
    The last equivalent increase will be the date the employee received 
a CCS pay increase, was eligible to receive a CCS pay increase, or 
received a promotion, whichever occurred last.

C. Personnel Administration

    All personnel laws, regulations, and guidelines not waived by this 
plan will remain in effect. Basic employee rights will be safeguarded 
and Merit System Principles will be maintained. Servicing Human 
Resources Service Centers will continue to process personnel-related 
actions and provide consultative and other appropriate services.

D. Automation

    ONR will continue to use the Defense Civilian Personnel Data System 
(DCPDS) for the processing of personnel-related data. Payroll servicing 
will continue from the respective payroll offices.
    An automated tool will be used to support computation of 
performance related pay increases and awards and other personnel 
processes and systems associated with this project.

E. Experimentation and Revision

    Many aspects of a demonstration project are experimental. 
Modifications may be made from time to time as experience is gained, 
results are analyzed, and conclusions are reached on how the new system 
is working. DoDI 1400.37, July 28, 2009, provides instructions for 
adopting other STRL flexibilities, making minor changes to an existing 
demonstration project, and requesting new initiatives.

VII. Demonstration Project Duration

    Section 342 of the National Defense Authorization Act for Fiscal 
Year 1995 (Pub. L. 103-337) does not require a mandatory expiration 
date for this demonstration project. The project evaluation plan 
addresses how each intervention will be comprehensively evaluated. 
Major changes and modifications to the interventions may be made using 
the procedures in DoDI 1400.37, if formal evaluation data warrant a 
change. At the 5-year point, the entire demonstration will be examined 
for either: (a) Permanent implementation, (b) modification and another 
test period, or (c) termination of the project.

VIII. Demonstration Project Evaluation Plan

    Consistent with DoD guidance, ONR proposes following the same 
evaluation plan as is being used by NRL and the other STRL 
Demonstration Projects. Accordingly, standard language for Evaluation 
Plan, Evaluation, and Method of Data Collection (sections V.B., V.C, 
and V.D., respectively) provided by DoD is used in this document to 
describe ONR's plans and procedures for the demonstration project 
evaluation. The use of parallel evaluation methodologies will 
facilitate comparisons across the demonstration projects to derive 
higher-order conclusions about the benefits, challenges, and overall 
effectiveness of these programs.

A. Overview

    Chapter 47 of title 5 U.S.C. requires that an evaluation be 
performed to measure the effectiveness of the proposed laboratory 
demonstration project, and its impact on improving public management. A 
comprehensive evaluation plan for the entire laboratory demonstration 
program, originally covering 24 DoD laboratories, was developed by a 
joint OPM/DoD Evaluation Committee in 1995. This plan was submitted to 
the Office of Defense Research & Engineering and was subsequently 
approved. The main purpose of the evaluation is to determine whether 
the waivers granted result in a more effective personnel system and 
improvements in ultimate outcomes (i.e., laboratory effectiveness, 
mission accomplishment, and customer satisfaction).

B. Evaluation Model

    Appendix G shows an intervention model for the evaluation of the 
demonstration project. The model is designed to evaluate two levels of 
organizational performance: Intermediate and ultimate outcomes. The 
intermediate outcomes are defined as the results from specific 
personnel system changes and the associated waivers of law and 
regulation expected to improve human resource (HR) management (i.e., 
cost, quality, timeliness). The ultimate outcomes are determined 
through improved organizational performance, mission accomplishment, 
and customer satisfaction. Although it is not possible to establish a 
direct causal link between changes in the HR management system and 
organizational effectiveness, it is hypothesized that the new HR system 
will contribute to improved organizational effectiveness.
    Organizational performance measures established by the organization 
will be used to evaluate the impact of a new HR system on the ultimate 
outcomes. The evaluation of the new HR system for any given 
organization will take into account the influence of three factors on 
organizational performance: Context, degree of implementation, and 
support of implementation. The context factor refers to the impact 
which intervening variables (i.e., downsizing, changes in mission, or 
the economy) can have on the effectiveness of the program. The degree 
of implementation considers the extent to which the:
    (1) HR changes are given a fair trial period;
    (2) changes are implemented; and
    (3) changes conform to the HR interventions as planned.
    The support of implementation factor accounts for the impact that 
factors such as training, internal regulations and automated support 
systems have on the support available for program implementation. The 
support for program implementation factor can also be affected by the 
personal characteristics (e.g., attitudes) of individuals who are 
implementing the program.
    The degree to which the project is implemented and operated will be 
tracked to ensure that the evaluation results reflect the project as it 
was intended. Data will be collected to measure changes in both 
intermediate and ultimate outcomes, as well as any unintended outcomes, 
which may happen as a result of any organizational change. In addition, 
the evaluation will track the impact of the project and its 
interventions on veterans and other protected groups, the Merit System 
Principles, and the Prohibited Personnel Practices. Additional measures 
may be added to the model in the event that changes or modifications 
are made to the demonstration plan.
    The intervention model at Appendix D will be used to measure the 
effectiveness of the personnel system interventions implemented. The 
intervention model specifies each personnel system change or 
``intervention'' that will be measured and shows:
    (1) The expected effects of the intervention,
    (2) the corresponding measures, and
    (3) the data sources for obtaining the measures.
    Although the model makes predictions about the outcomes of specific 
interventions, causal attributions about the full impact of specific 
interventions will not always be possible for several reasons. For

[[Page 30220]]

example, many of the initiatives are expected to interact with each 
other and contribute to the same outcomes. In addition, the impact of 
changes in the HR system may be mitigated by context variables (e.g., 
the job market, legislation, and internal support systems) or support 
factors (e.g., training and automation support systems).

C. Evaluation

    A modified quasi-experimental design will be used for the 
evaluation of the STRL Personnel Demonstration Program. Because most of 
the eligible laboratories are participating in the program, a title 5 
U.S.C. comparison group will be compiled from the Civilian Personnel 
Data File (CPDF). This comparison group will consist of workforce data 
from Government-wide research organizations in civilian Federal 
agencies with missions and job series matching those in the DoD 
laboratories. This comparison group will be used primarily in the 
analysis of pay banding costs and turnover rates.

D. Method of Data Collection

    Data from several sources will be used in the evaluation. 
Information from existing management information systems and from 
personnel office records will be supplemented with perceptual survey 
data from employees to assess the effectiveness and perception of the 
project. The multiple sources of data collection will provide a more 
complete picture as to how the interventions are working. The 
information gathered from one source will serve to validate information 
obtained through another source. In so doing, the confidence of overall 
findings will be strengthened as the different collection methods 
substantiate each other.
    Both quantitative and qualitative data will be used when evaluating 
outcomes. The following data will be collected:
    (1) Workforce data;
    (2) Personnel office data;
    (3) Employee attitude surveys;
    (4) Focus group data;
    (5) Local site historian logs and implementation information;
    (6) Customer satisfaction surveys; and
    (7) Core measures of organizational performance.
    The evaluation effort will consist of two phases, formative and 
summative evaluation, covering at least five years to permit inter- and 
intra-organizational estimates of effectiveness. The formative 
evaluation phase will include baseline data collection and analysis, 
implementation evaluation, and interim assessments. The formal reports 
and interim assessments will provide information on the accuracy of 
project operation, and current information on impact of the project on 
veterans and protected groups, Merit System Principles, and Prohibited 
Personnel Practices. The summative evaluation will focus on an overall 
assessment of project outcomes after five years. The final report will 
provide information on how well the HR system changes achieved the 
desired goals, which interventions were most effective, and whether the 
results can be generalized to other Federal installations.

IX. Demonstration Project Costs

A. Cost Discipline

    An objective of the demonstration project is to ensure in-house 
cost discipline. A baseline will be established at the start of the 
project and labor expenditures will be tracked yearly. Implementation 
costs (including project development, automation costs, WGI buy-in 
costs, and evaluation costs) are considered one-time costs and will not 
be included in the cost discipline.
    The CNR or designee will track personnel cost changes and recommend 
adjustments if required to achieve the objective of cost discipline.

B. Implementation Costs

    Current cost estimates associated with implementing the ONR 
demonstration project are shown in Figure 11. These include automation 
of systems such as the CCSDS, training, and project evaluation. The 
automation and training costs are startup costs. Transition costs are 
one-time costs. Costs for project evaluation will be ongoing for at 
least five years.

                                    Figure 11--Projected Implementation Costs
                                               [Then year dollars]
----------------------------------------------------------------------------------------------------------------
                                                                  FY 10     FY 11     FY 12     FY 13     FY 14
----------------------------------------------------------------------------------------------------------------
Training......................................................     $200K     $200K      $56K      $25K      $25K
Project Evaluation............................................      100K       50K      100K       50K      100K
Automation....................................................       97K       25K       25K       25K       25K
Transition....................................................         0      500K         0         0         0
                                                               -------------------------------------------------
 
    Totals....................................................      397K      775K      181K      100K      150K
----------------------------------------------------------------------------------------------------------------

X. Automation Support

A. General

    One of the major goals of the demonstration project is to 
streamline the personnel processes to increase cost effectiveness. 
Automation must play an integral role in achieving that goal. Without 
the necessary automation to support the interventions proposed for the 
demonstration project, optimal cost benefit cannot be realized. In 
addition, adequate information to support decision-making must be 
available to managers if line management is to assume greater authority 
and responsibility for human resources management.
    Automation to support the demonstration project is required at two 
distinct levels. At the DON and DoD level, automation support (in the 
form of changes to the DCPDS) is required to facilitate processing and 
reporting of demonstration project personnel actions. At the ONR level, 
automation support (in the form of local processing applications) is 
required to facilitate management processes and decision-making.

B. Defense Civilian Personnel Data System (DCPDS)

    Since DCPDS is a legacy system, efforts have been made to minimize 
changes to the system; and, therefore, the resources required to make 
the necessary changes. The detailed specifications for required changes 
to DCPDS will be provided in the System Change Request (SCR), Form 804.

C. Core Document (COREDOC)

    The COREDOC application is a DoD system which may require 
modification to accommodate the interventions in this demonstration 
project. Specifically,

[[Page 30221]]

there is an RD that replaces the position description in the basic 
application; career tracks and pay bands replace GS grades; and a CCS 
Assessment Summary that replaces performance elements.

D. RIF Support System (RIFSS)

    The RIFSS is an automated tool used by human resources specialists 
to support RIF processing. Under the demonstration project, RIF rules 
are modified to increase the credit for contributions and limit the 
rounds of competition. The AutoRIF application, developed by DoD, may 
need to be modified to accommodate these process changes.

E. Contribution-Based Compensation System Data System

    This automated system is required as an internal control and as a 
mechanism to equate contribution scores to appropriate rates of basic 
pay. This system will allow pay pool managers to develop a spreadsheet 
that will assist them in determining an appropriate merit increase or 
contribution award or both based on the overall contribution score for 
each individual. It will also be used as an internal control to ensure 
that the permanent and nonpermanent money allotted to each pay pool is 
not exceeded. It will further allow pay pool managers to visualize the 
effects of giving large basic pay increases or awards to high 
contributors, and the effects of withholding either the general or 
merit increase or both of those who are low contributors, or in the 
overcompensated range.

Appendix A: Summary of Demonstration Project Features Adopted by ONR

----------------------------------------------------------------------------------------------------------------
   ONR demonstration project                                      Originating lab      Originating FR Notice
   features (ONR FR Section)              Modification                 demo                  reference
----------------------------------------------------------------------------------------------------------------
                                                  Flexibilities
----------------------------------------------------------------------------------------------------------------
Hiring Authority (Section        No substantive changes  NRL.............  Pages 33981-33982, Section
 III.A.-C.).                     made.                                              III.A-C.
Noncitizen Hiring (Section       No substantive changes  NRL.............  Page 33982, Section III.D.
 III.D.).                        made.
Expanded Detail Authority        No substantive changes  NRL.............  Page 33982, Section III.E.
 (Section III.E.).               made.
Extended Probationary Period     No substantive changes  NRL.............  Page 33982, Section III.F.
 for New Employees (Section      made.
 III.F.).
Definitions (Section III.G.)..   No substantive changes  NRL.............  Pages 33982-33983, Section
                                 made.                                              III.G.
Pay Setting Determinations       Added procedures for    NRL.............  Pages 33983-33984, Section
 Outside CCS (Section III.H.).   Restoration to Duty for                            III.H.
                                 deployed individuals.
Priority Placement Program       No substantive changes  NRL.............  Page 33984, Section III.I.
 (Section III.I.).               made.
Expanded Temporary Promotion     No substantive changes  NRL.............  Page 33984, Section III.J.
 (Section III.J.).               made.
Voluntary Emeritus Program       Expanded eligibility    AMRDEC..........  Page 34889, Section III.D.2.
 (Section III.K.).               for the Voluntary Emeritus
                                 Program to all retired and
                                 separated employees, not just
                                 engineers and scientists.
Position Classification         Adopting three of NRL's four     NRL.............  Pages 33984-33989, Section
 (Section IV.A.).                career tracks/pay plans.                           IV.A.
                                ONR chooses not to adopt the
                                 Science & Engineering
                                 Technical career track because
                                 the types of positions that
                                 fall into this career track do
                                 not exist at ONR.
Integrated Pay Schedule         The ARSAE designations will not  NRL.............  Pages 33989-33991, Section
 (Section IV.B.).                be adopted but instead will be                     IV.B.
                                 rolled into the new above GS-
                                 15 levels initiative to be
                                 established by DoD.
                                Position management methods
                                 established by the new DoD
                                 above GS-15 level initiative,
                                 rather than the DoD 40-
                                 position limit.
Contribution-based               Revised critical        NRL.............  Pages 33991-34001, Section
 Compensation System (CCS)       elements to ensure                                 IV.C.
 (Section IV.C.).                applicability to ONR personnel.
                                 Described a more
                                 general approach for annual
                                 budgeting for merit increases,
                                 to provide greater flexibility
                                 in establishing and amending
                                 internal procedures.
                                 Clarified the use of
                                 merit increase funds during
                                 each payout cycle; funds may
                                 not be carried over to the
                                 next payout cycle.
Performance-based Reduction-in-  No substantive changes  NRL.............  Page 34001, Section V.A
 Pay or Removal Actions          made.
 (Section V.A.).
Reduction-in-Force (RIF)         Amended the CCS RIF     NRL.............  Page 34001, Section.V.B.
 Procedures (Section V.B.).      assessment categories.
                                 Added a definition for
                                 Competition in RIF so
                                 employees released from
                                 retention level will have the
                                 right to be assigned to
                                 another position within the
                                 same career track/level, or
                                 retreat to a previously held
                                 position.
----------------------------------------------------------------------------------------------------------------
                                            Administrative Procedures
----------------------------------------------------------------------------------------------------------------
Initial Conversion or Movement   Added procedures for    NRL.............  Page 34003, Section VI.A.
 to the Demonstration Project    converting employees who are
 (Section VI.A.).                on Temporary Promotions.
                                 Clarified procedures
                                 for non-competitive movement
                                 into the demonstration project
                                 (e.g., lateral transfer,
                                 reassignment, or realignment).

[[Page 30222]]

 
CCS Startup (Section VI.B.)...   No substantive changes  NRL.............  Page 34003, Section VI.B.
                                 made.
Training (Section VI.C.)......   No substantive changes  NRL.............  Page 34004, Section VI.C.
                                 made.
New Hires into the               No substantive changes  NRL.............  Page 34004, Section VI.D.
 Demonstration Project           made.
 (Section VI.D.).
Conversion or Movement from      Clarified procedures    NRL.............  Pages 34004-34005, Section
 the Demonstration Project       for setting pay for employees                      VI.E.
 (Section VII.E.).               whose basic pay exceeds the
                                 maximum basic pay of the
                                 highest GS grade for their
                                 career level.
Demonstration Project Duration   No substantive changes  NRL.............  Page 34005, Section VII.
 (Section VII.).                 made.
Demonstration Project            Used standard STRL      NRL.............  Pages 34005-34007, Section
 Evaluation Plan (Section        evaluation language provided                       VIII.
 VIII.).                         by DoD; which is virtually
                                 identical to NRL's original
                                 section.
Cost Containment and Controls    Described a more        NRL.............  Pages 34007-34008, Section
 (Section IX.).                  general approach to cost                           IX.
                                 discipline, to enable ONR to
                                 develop internal procedures
                                 and make modifications over
                                 time, as needed.
Automation Support (Section      No substantive changes  NRL.............  Page 34008, Section X.
 X.).                            made.
----------------------------------------------------------------------------------------------------------------

Appendix B: Required Waivers to Laws and Regulations

    Public Law 106-398 gave the DoD the authority to experiment with 
several personnel management innovations. In addition to the 
authorities granted by the law, the following are waivers of law and 
regulation that will be necessary for implementation of the 
demonstration project. In due course, additional laws and 
regulations may be identified for waiver request.
    The following waivers and adaptations of certain title 5 U.S.C. 
provisions are required only to the extent that these statutory 
provisions limit or are inconsistent with the actions contemplated 
under this demonstration project. Nothing in this plan is intended 
to preclude the demonstration project from adopting or incorporating 
any law or regulation enacted, adopted, or amended after the 
effective date of this demonstration project.

Waivers of Law and Regulation

----------------------------------------------------------------------------------------------------------------
              Title V, United States Code                          Title 5, Code of Federal Regulations
----------------------------------------------------------------------------------------------------------------
Chapter 31, section 3111: Acceptance of Volunteer        Part 300, subpart F, sections 300.601 to 300.605--Time-
 Service. Waived to allow for a Voluntary Emeritus        in-grade Restrictions. Waive in entirety
 Program in addition to student volunteers.
Chapter 31, section 3132: The Senior Executive Service:  Part 300, sections 300.601 through 605: Time-in-grade
 Definitions and Exclusions. Waived as necessary to       restrictions. Waived to eliminate time-in-grade
 allow for the Pay Band VI of the S&E Occupational        restrictions in the demonstration project.
 Family.
                                                         Part 308, sections 308.101 through 308.103: Volunteer
                                                          service. Waived to allow for a Voluntary Emeritus
                                                          Program in addition to student volunteers.
                                                         Part 315, section 315.801(a), 315.801(b)(1), (c), and
                                                          (e), and 315.802(a) and (b)(1): Probationary period
                                                          and Length of probationary period. Waived to the
                                                          extent necessary to allow for up to a three-year
                                                          probationary period and to permit termination during
                                                          the extended probationary period without using adverse
                                                          action procedures for those employees serving a
                                                          probationary period under an initial appointment
                                                          except for those with veterans' preference.
                                                         Part 315, section 315.901: Statutory requirement.
                                                          Waived to the extent necessary to replace ``grade''
                                                          with ``pay band.''
Chapter 33, subchapter 1, section 3318(a)-Competitive    Part 332, subpart D, section 332.404--Order of Section
 Service; Selection from Certificate. Waive.              of Certificates. Waive in entirety.
Chapter 33, section 3324: Appointments to Positions      Part 335, subpart A, section 335.103(c)(1)(i), (ii)--
 Classified Above GS-15. Waived the requirement for OPM   Agency Promotion Program.
 approval of appointments to positions classified above  Waive to allow temporary promotions and details to a
 GS-15.                                                   higher level position without competition.
                                                         Part 335, subpart A, section 335.104--Eligibility for
                                                          Career Ladder Promotion. Waive in entirety.
                                                         Part 337, subpart A, section 337.101(a)--Rating
                                                          Applicants. Waive when 15 or fewer qualified
                                                          candidates.
Chapter 33, subchapter III, section 3341(b) Details--    .......................................................
 Within Executive or Military Departments. Waive in
 entirety.
                                                         Part 351, subpart G, section 351.701--Assignment
                                                          Involving Displacement.
                                                         (a) Waive to allow minimally successful or equivalent
                                                          to be defined as an employee whose current CCS RIF
                                                          Assessment Category score is 12 or better and does not
                                                          have a current written notification of unacceptable
                                                          performance.

[[Page 30223]]

 
                                                         (b) and (c) Assignment rights (bump and retreat). Waive
                                                          to the extent that the distinction between bump and
                                                          retreat is eliminated and to allow displacement to be
                                                          limited to the employee's current career track and pay
                                                          band or, if there are no displacement rights in the
                                                          employee's current pay band, to any position
                                                          previously held in the next lower pay band regardless
                                                          of career track. Preference eligibles may displace up
                                                          to the equivalent of 3 grades or intervals below the
                                                          highest equivalent grade of their current pay band in
                                                          the same or different career track regardless of
                                                          whether they previously held the position provided
                                                          they are fully qualified and the position is occupied
                                                          by an employee with a lower retention standing.
                                                          Preference eligibles with a compensable service
                                                          connected disability of 30 percent or more may
                                                          displace an additional 2 GS grades or intervals (total
                                                          of 5 grades) below the highest equivalent grade of
                                                          their current pay band provided they previously held
                                                          the position and the position is occupied by an
                                                          employee in the same subgroup with a later RIF service
                                                          computation date.
                                                         (d) Limitation. Waive.
                                                         (e)(1) Waive.
                                                         Part 351, subpart B, section 351.403(a)
                                                         Competitive Level. Waive to allow establishing
                                                          competitive levels consisting of all ONR demo
                                                          positions in a competitive area, which are in the same
                                                          pay band level and career track, and which are similar
                                                          enough in duties, qualifications, and requirements,
                                                          including any selective placement factors, pay
                                                          schedules, and working conditions so that the
                                                          incumbent of one position may be reassigned to any
                                                          other position in the level without undue
                                                          interruption.
                                                         Part 351.402(b), subpart D: Competitive area. Waived to
                                                          the extent necessary to allow for separate competitive
                                                          areas for demonstration project and non-demonstration
                                                          project employees.
                                                         Part 351, subpart E, section 351.504--Performance
                                                          Credit for RIF. Waive in entirety.
Chapter 43, section 4302: Waived to the extent           Part 430, subpart B, section 430.207(b)--Waive to the
 necessary to substitute ``pay band'' for ``grade''.      extent this section requires one or more progress
                                                          reviews during each appraisal period.
Chapter 43, subchapter I, section 4303--Actions Based    Part 430, subpart B, section 430.210--OPM
 on Unacceptable Performance. Waive to allow coverage     Responsibilities. Waive in entirety. Part 432, section
 of ``reduction in pay level based on unacceptable        432.101 to 432.107--Performance Reduction in Grade and
 performance.'' Waive to exclude from coverage            Removal Actions. Waive to allow coverage of
 (procedural and appeal rights) reductions in pay band    ``reduction in pay level based on unacceptable
 with no reduction in pay, when such actions result       performance.'' Waive to exclude from coverage
 from regression of pay into a lower pay band through     (procedural and appeal rights) reduction in pay band
 reductions and denials of general increase               with no reduction in pay, when such action results
 (``slippage''). This exclusion will not apply to         from regression of pay into a lower pay band through
 employees with veterans' preference.                     reductions and denials of general increase
                                                          (``slippage''). This exclusion will not apply to
                                                          employees with veterans' preference.
Chapter 43, subpart I, section 4303(f)(3)--Waive to      .......................................................
 allow exclusion of employees in the excepted service
 who have not completed a trial period, except those
 with veterans' preference.
Chapter 43, subchapter I, section 4304(b)(1) and (3)--   .......................................................
 Responsibilities of OPM. Waive in entirety.
Chapter 45, subchapter I, section 4502(a) and (b)--      Part 451, subpart A, section 451.103(c)(2)--Waive with
 Waive to permit ONR to approve awards up to $25,000      respect to contribution awards under the ONR CCS.
 for individual employees.
                                                         Part 451, subpart A, sections 451.106(b) and
                                                          451.107(b)--Waive to permit ONR to approve awards up
                                                          to $25,000 for individual employees.
Chapter 51, sections 5101 to 5113--Classification.       Part 511--Classification Under the GS. Waive in
 Waive in entirety except section 5104 to the extent      entirety with an exception for appeal rights and time
 needed to permit classification of pay bands and CCS     constraints under subpart F, sections 511.603,
 descriptors into logically defined level groupings..     511.604, and 511.605.
Chapter 53, subpart I, section 5301--Pay Policy. Waive   .......................................................
 in entirety.
Chapter 53, subchapter I, section 5302(8) and (9)--Pay   .......................................................
 Definition and section 5304--Locality-Based
 Comparability Payments. Waive to the extent necessary
 to allow demonstration project employees to be treated
 as GS employees and basic rates of pay under the
 demonstration project to be treated as scheduled rates
 of basic pay. Employees in Pay Band V for the S&E
 Professional Track to be treated as ST employees for
 the purposes of these provisions.
Chapter 53, subchapter I, section 5303--Annual           .......................................................
 Adjustments to Pay Schedules. Waive in entirety.
Chapter 53, subpart I, section 5303--Special Pay         .......................................................
 Authority. Waive in entirety..
Chapter 53, subchapter III, sections 5331 to 5336--GS    Part 520, subpart C--Specialty Salary Rate Schedules.
 Pay Rates. Waive in entirety.                            Waive in entirety.
                                                         Part 531, subpart B--Determining Rate of Basic Pay.
                                                          Waive in entirety.

[[Page 30224]]

 
                                                         Part 531, subpart D--Within Grade Increases. Waive in
                                                          entirety.
                                                         Part 531, subpart E--Quality Step Increases. Waive in
                                                          entirety.
                                                         Part 531, subpart F--Locality-Based Comparability
                                                          Payments. Waive to the extent necessary to allow the
                                                          demonstration project employees to be treated as GS
                                                          employees, employees in Pay Band V of the S&E
                                                          Professional Career to be treated as ST employees, and
                                                          basic rates of pay under the demonstration project to
                                                          be treated as scheduled annual rates of pay.
Chapter 53, subchapter VI, sections 5361 to 5366--Grade  Part 536--Grade and Pay Retention. Waive in entirety.
 and Pay Retention. Waive to entirety.
Chapter 55, section 5545 (d)--Hazardous Duty             Part 550, subpart G--Severance Pay.
 Differential. Waive to the extent necessary to allow    Waive to the extent necessary to allow ONR to define
 demonstration project employees to be treated as GS      reasonable offer.
 employees. This waiver does not apply to employees in   Part 550, subpart I--Pay for Duty Involving Physical
 Pay Band V of the S&E Professional Career Track.         Hardship or Hazard. Waive to the extent necessary to
                                                          allow demonstration project employees to be treated as
                                                          GS employees. This waiver does not apply to employees
                                                          in Pay Band V of the S&E Professional Career Track.
Chapter 57, subchapter IV, section 5753 to 5755--        Part 575, subparts A, B, C, and D--Recruitment and
 Recruitment and Relocation Bonuses, Retention            Relocation Bonuses, Retention Allowances, and
 Allowances, and Supervisory Differential. Waive to the   Supervisory Differential, Waive to the extent
 extent necessary to allow (1) employees and positions    necessary to allow (1) employees and positions under
 under the demonstration project to be treated as         the demonstration project to be treated as employees
 employees and positions under the GS and (2) employees   and positions under the GS and (2) employees in Level
 in Level V of the S&E Professional career track to be    V of the S&E Professional career track to be treated
 treated as ST employees for these purposes.              as ST employees for these purposes.
Chapter 59, subchapter III, section 5924--Cost-of-       Part 591, subpart B--Cost-of-living Allowances and Post
 living Allowances. Waive to the extent necessary to      Differential--non-foreign areas. Waive to the extent
 provide that COLA's paid to employees under the          necessary to allow demonstration project employees to
 demonstration project are paid in accordance with        be treated as GS employees and employees in Pay Band V
 regulations prescribed by the President (as delegated    of the S&E Professional Career Track to be treated as
 to OPM).                                                 ST employees.
Chapter 75, sections 7501(1) and 7511 (a)(1)(A)(ii)--    Part 752, sections 752.101, 752.201, 752.301 and
 Removal Suspension for More Than 14 Days, Reduction in   752.401: Principal statutory requirements and
 Grade or Pay, or Furlough. Waived to the extent          Coverage. Waived to the extent necessary to allow for
 necessary to allow for up to a three-year probationary   up to a three-year probationary period and to permit
 period and to permit termination during the extended     termination during the extended probationary period
 probationary period without using adverse action         without using adverse action procedures for those
 procedures for those employees serving a probationary    employees serving a probationary period under an
 period under an initial appointment except for those     initial appointment except for those with veterans'
 with veterans' preference 7511(a)(I)(C)(ii)--Waive.      preference.
Chapter 75, subchapter II, section 7512--Adverse         Part 752, subpart A--Adverse Actions. Waive to exclude
 Actions. Waive to replace ``grade'' with ``pay band'',   from coverage (procedural and appeal rights)
 provide that adverse action provisions do not apply to   reductions in pay band with no reduction in pay, when
 conversion from General Schedule special rates to        such actions result from regression of pay into a
 demonstration project pay, as long as total pay is not   lower pay band through reductions and denials of
 reduced; and exclude from coverage (procedural and       general increase (``slippage''). This exclusion will
 appeal rights) reductions in pay band with no            not apply to employees with veterans' preference.
 reduction in pay, when such actions result from         Part 752, section 752.401(a)(3)--Adverse Actions. Waive
 regression of pay into a lower pay band through          to replace ``grade'' with ``pay band''.
 reductions or denials of general increase
 (``slippage''). This exclusion will not apply to
 employees with veterans' preference.
                                                         Part 752, section 752.401(a)(4)--Adverse Actions. Waive
                                                          to provide that adverse action provisions do not apply
                                                          to conversion from General Schedule special rates to
                                                          demonstration project pay, as long as total pay is not
                                                          reduced.
----------------------------------------------------------------------------------------------------------------

Appendix C: Definitions of Career Tracks and Pay Bands

    ONR's career level definitions may be modified as experience is 
gained through their application in classification actions and 
performance appraisal.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Career Track: S&E Professional--Includes professional positions in S&E
 occupations such as physics, electronics engineering, chemistry, and
 student positions associated with these professions.
------------------------------------------------------------------------
Level I..................  This includes student trainees. The education
                            and employment must be part of a formal
                            student employment program. Specific, clear,
                            and detailed instructions and supervision
                            are given to complement education. The level
                            of education and experience completed is a
                            major consideration in establishing the
                            level of on-the-job training and work
                            assignments.
Level II.................  This is the entry or developmental stage,
                            preparing S&E's for the full and independent
                            performance of their work. S&E's at this
                            level perform supporting work in science or
                            engineering requiring professional training
                            but little experience, and conduct
                            activities with objectives and priorities
                            identified by supervisor or team leader.
                            Assistance is given on new or unusual
                            projects; completed work is reviewed for
                            technical soundness.
Level III................  This is the advanced developmental pay band
                            of this career track. S&Es at this level
                            conceive and define solutions to technical
                            problems of moderate complexity; plan,
                            analyze, interpret, and report findings of
                            projects; and guide technical and
                            programmatic work of a program's research
                            efforts. Completed work and reports are
                            reviewed to evaluate overall results.

[[Page 30225]]

 
Level IV.................  S&E's at this level are authorities within
                            their professional areas or key program
                            administrators. They direct technical
                            activities or assist higher levels on
                            challenging and innovative projects or
                            technical program development with only
                            general guidance on policy, resources and
                            planning; develop solutions to complex
                            problems requiring various disciplines;
                            responsible for fulfilling program
                            objectives.
Level V..................  S&Es at this level are renowned experts in
                            their fields. They independently define and
                            lead most challenging technical programs
                            consistent with general guidance and/or
                            independently direct overall R&D program
                            managerial and/or supervisory aspects;
                            conceive and develop elegant solutions to
                            very difficult problems requiring highly
                            specialized areas of technical expertise;
                            are recognized within DoD and other agencies
                            for broad technical area expertise and have
                            established professional reputation in
                            technical community nationally and
                            internationally. The primary requirement for
                            Level V positions is the knowledge of and
                            expertise in specific scientific and
                            technology areas related to the mission of
                            their organization. However, the ability to
                            manage and/or supervise R&D operations or
                            programs is also considered a necessity.
                            They may direct the work of an
                            organizational unit; may be held accountable
                            for the success of one or more specific
                            programs or projects; monitor progress
                            toward organizational goals and periodically
                            evaluate and make appropriate adjustments to
                            such goals; supervise the work of employees;
                            or otherwise exercise important policy-
                            making, policy-determining, or other
                            managerial functions.
------------------------------------------------------------------------
Career Track: Administrative Specialist and Professional--Professional
 and specialist positions in areas such as the following: safety and
 health, personnel, finance, budget, procurement, librarianship, legal,
 business, facilities management and student positions associated with
 these professions.
------------------------------------------------------------------------
Level I..................  Includes student trainees. The education and
                            employment must be part of a formal student
                            employment program. Specific, clear, and
                            detailed instructions and supervision are
                            given to complement education. The level of
                            education and experience completed is a
                            major consideration in establishing the
                            level of on-the-job training and work
                            assignments.
Level II.................  This is the developmental stage preparing
                            Administrative Specialists and Professionals
                            for the full and independent performance of
                            their work. Specific, clear and detailed
                            instruction and supervision are given upon
                            entry; recurring assignments are carried out
                            independently. Situations not covered by
                            instructions are referred to supervisor.
                            Finished work is reviewed to ensure
                            accuracy.
Level III................  This is the advanced developmental career
                            level of this career track. Employees at
                            this level plan and carry out assignments
                            independently, resolve conflicts that arise,
                            coordinate work with others and interpret
                            policy on own initiative. Completed work is
                            reviewed for feasibility, compatibility with
                            other work or effectiveness in meeting
                            requirements or expected results.
Level IV.................  At this level, Administrative Specialists and
                            Professionals are authorities within their
                            professional areas or key program
                            administrators or supervisors. They conduct
                            or direct activities in an administrative
                            and professional area with only general
                            guidance on policy, resources and planning;
                            develop solutions to complex problems
                            requiring various disciplines; and are
                            responsible for fulfilling program
                            objectives.
Level V..................  Administrative Specialists and Professionals
                            at this level are experts within their broad
                            administrative area or professional field
                            who serve as leaders, heads of branches or
                            divisions, or key program administrators.
                            They receive general guidance on policy,
                            resources and planning that have an effect
                            on public policies or programs; and are
                            responsible for fulfilling program
                            objectives. Results are authoritative and
                            affect administrative programs or the well-
                            being of substantial numbers of people.
------------------------------------------------------------------------
Career Track: Administrative Support--Includes clerical, secretarial and
 assistant work in nonscientific and engineering occupations.
------------------------------------------------------------------------
Level I..................  This includes student trainees as well as
                            advanced entry level which requires a
                            fundamental knowledge of a clerical or
                            administrative field. Developmental
                            assignments may be given which lead to
                            duties at a higher group level. Performs
                            repetitive tasks, specific, clear and
                            detailed instruction and supervision; with
                            more experience utilizes knowledge of
                            standardized procedures and operations,
                            assistance is given on new or unusual
                            projects. Completed work is reviewed for
                            technical soundness.
Level II.................  This level requires knowledge of standardized
                            rules, procedures or operations requiring
                            considerable training. General guidance is
                            received on overall objectives and
                            resources. Completed assignments may be
                            reviewed for overall soundness or meeting
                            expected results.
Level III................  This is the senior level which requires
                            expert knowledge of procedures and
                            operations, which is gained through
                            extensive training. Employees at this level
                            receive general guidance on overall
                            resources and objectives, and are skilled in
                            applying knowledge of basic principles,
                            concepts, and methodology of profession or
                            administrative occupation and technical
                            methods. Results are accepted as
                            authoritative and are normally accepted
                            without significant change.
------------------------------------------------------------------------

Appendix D: Table of Occupational Series Within Career Tracks

    Definitions for ONR's three career tracks are provided below 
along with the breakdown of their respective series. Some series may 
appear in two career tracks depending on the purpose of the 
position. The breakdown of occupational series reflects only those 
occupations that currently exist in ONR. Additional series may be 
added as a result of changes in mission requirements or OPM-
recognized occupations. These additional series will be placed in 
the appropriate career track consistent with the definitions 
provided below.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
S&E Professional Career Track: Includes professional positions in S&E
 occupations such as physics, electronics, engineering, chemistry, and
 student positions associated with these professions.
------------------------------------------------------------------------
0180--Psychology Series.             0855--Electronics Engineering
                                      Series.
0190--General Anthropology Series.   0861--Aerospace Engineering Series.
0335--Computer Clerk & Assistant.    0871--Naval Architecture Series.
0401--General Natural Resources      0854--Computer Engineering Series.
 Management and Biological Sciences
 Series.
0403--Microbiology Series.           0893--Chemical Engineering Series.
0405--Pharmacology Series.           0896--Industrial Engineering
                                      Series.
0413--Physiology Series.             1301--General Physical Sciences
                                      Series.
0440--Genetics Series.               1310--Physics Series.

[[Page 30226]]

 
0601--General Health Science         1313--Geophysics Series.
 Series.
0602--Medical Officer Series.        1320--Chemistry Series.
0801--General Engineering Series.    1321--Metallurgy Series.
0802--Engineering Technical Series.  1340--Meteorology Series.
0806--Materials Engineering Series.  1360--Oceanography Series.
0810--Civil Engineering Series.      1515--Operations Research Series.
0830--Mechanical Engineering         1520--Mathematics Series.
 Series.
0840--Nuclear Engineering Series.    1530--Statistics Series.
0850--Electrical Engineering         1550--Computer Science Series.
 Series.
------------------------------------------------------------------------
Administrative Specialist and Professional Career Track: Professional
 and specialist positions in areas such as the following: Safety and
 health, finance, budget, procurement, librarianship, legal, business,
 facilities management, and student positions associated with these
 professions.
------------------------------------------------------------------------
0080--Security Administration        0905--General Attorney Series.
 Series.
0110--Economist Series.              0950--Paralegal Specialist Series.
0201--Human Resource Management      1035--Public Affairs Series.
 Series.
0260--Equal Employment Opportunity   1084--Visual Information Series.
 Series.
0301--Miscellaneous Administration   1101--General Business and Industry
 and Program Series.                  Series.
0340--Program Management Series.     1102--Contracting Series.
0341--Administrative Officer         1150--Industrial Specialist Series.
 Series.
0343--Management and Program         1222--Patent Attorney Series.
 Analysis Series.
0391--Telecommunications Series.     1412--Technical Information
                                      Services Series.
0501--Financial Administration and   1720--Education Specialist Series.
 Program Series.
0505--Financial Management Series.   1801--General Inspection,
                                      Investigation, and Compliance
                                      Series.
0510--Accounting Series.             2210--Information Technology
                                      Management.
0560--Budget Analysis Series.        ...................................
------------------------------------------------------------------------
Administrative Support: Includes clerical, secretarial, and assistant
 work in nonscientific and engineering occupations.
------------------------------------------------------------------------
0086--Security Clerical and          0335--Computer Clerk and Assistant
 Assistance Series.                   Series.
0203--Human Resource Assistance      0503--Financial Clerical and
 Series.                              Assistance Series.
0303--Miscellaneous Clerk and        0525--Accounting Technician Series.
 Assistant Series.
0305--Mail and File Series.          0561--Budget Clerical and
                                      Assistance Series.
0318--Secretary Series.              0986--Legal Assistance Series.
0326--Office Automation and          ...................................
 Clerical Assistance Series.
------------------------------------------------------------------------

Appendix E: Classification and CCS Elements

    The CCS Summaries shown in this appendix are draft templates 
intended to provide an understanding of the information covered by 
the CCS process. Under the demonstration project, the summaries will 
be generated by the CCSDS. They may be changed during the project to 
require additional information, to make them easier to use, or for 
other reasons.
    The contents of the CCS elements, descriptors, discriminators, 
and basic acceptable standards may similarly be changed during the 
life of the demonstration project.

  Office of Naval Research Contribution-Based Compensation System (CCS)
                                 Summary
                  [Science & Engineering Professional]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Employee Name:           Pay Pool Code:           Appraisal Period
                                                   Ending:
Click here to enter      Click here to enter      Click here to enter
 text.                    text.                    text.
------------------------------------------------------------------------
Title:                   Pay Plan/Series:         Career Level:
Click here to enter      Click here to enter      Click here to enter
 text.                    text.                    text.
------------------------------------------------------------------------
SSN: Click here to       Supervisor: Click here to enter text
 enter text
------------------------------------------------------------------------

Most Recent OCS: Click here to enter text.

Present Salary: Click here to enter text.

Scores within NPR Equivalent to Present Salary: Click here to enter 
text.

----------------------------------------------------------------------------------------------------------------
                                                                                              Rating of Record
  Critical Elements           * Weight                Score                Net Score            Acceptable or
                                                                                                Unacceptable
----------------------------------------------------------------------------------------------------------------
1. Scientific and      Click here to enter    Click here to enter    Click here to enter    Click here to enter
 Technical Leadership   text.                  text.                  text.                  text.
----------------------------------------------------------------------------------------------------------------
2. Program Execution   Click here to enter    Click here to enter    Click here to enter    Click here to enter
 and Liaison            text.                  text.                  text.                  text.
3. Cooperation and     Click here to enter    Click here to enter    Click here to enter    Click here to enter
 Supervision            text.                  text.                  text.                  text.
----------------------------------------------------------------------------------------------------------------
* If zero, then element not applicable.


[[Page 30227]]

Basic Pay Increase %: Click here to enter text.

Contribution Award $: Click here to enter text.

Hours Click here to enter text.

Summary Rating A (Acceptable) or U (Unacceptable)

Must be U if any critical element is rated U
Click here to enter text.

Overall Contribution Score (Weighted Average): Click here to enter 
text.

SUPPLEMENTAL CRITERIA (OPTIONAL). FOR EXAMPLE, SPECIFIC OBJECTIVES, 
STANDARDS, TASKINGS, AND/OR EXAMPLES:

REMARKS:

------------------------------------------------------------------------
  Signatures and
       Date             CCS Plan       Interim Review       Appraisal
------------------------------------------------------------------------
Employee
------------------------------------------------------------------------
Supervisor
------------------------------------------------------------------------
NOTE: Employee's signature under ``CCS Plan'' signifies that he or she
  has been given a copy of this summary and has a copy of Elements,
  Descriptors, Discriminators, and Standards applicable to his or her
  career track.

BILLING CODE 5001-06-P
[GRAPHIC] [TIFF OMITTED] TN28MY10.012


[[Page 30228]]


[GRAPHIC] [TIFF OMITTED] TN28MY10.013


[[Page 30229]]


[GRAPHIC] [TIFF OMITTED] TN28MY10.014


  Office of Naval Research Contribution-Based Compensation System (CCS)
                                 Summary
              [Administrative Specialist and Professional]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Employee Name:           Pay Pool Code:           Appraisal Period
                                                   Ending:
Click here to enter      Click here to enter      Click here to enter
 text.                    text.                    text.
------------------------------------------------------------------------
Title:                   Pay Plan/Series:         Career Level:
Click here to enter      Click here to enter      Click here to enter
 text.                    text.                    text.
------------------------------------------------------------------------
SSN: Click here to       Supervisor: Click here to enter text.
 enter text.
------------------------------------------------------------------------

Most Recent OCS: Click here to enter text.

Present Salary: Click here to enter text.

Scores within NPR Equivalent to Present Salary: Click here to enter 
text.

----------------------------------------------------------------------------------------------------------------
                                                                                              Rating of record
  Critical elements           * Weight                Score                Net score            acceptable or
                                                                                                unacceptable
----------------------------------------------------------------------------------------------------------------
1. Problem Solving     Click here to enter    Click here to enter    Click here to enter    Click here to enter
 and Leadership         text.                  text.                  text.                  text.
----------------------------------------------------------------------------------------------------------------

[[Page 30230]]

 
2. Cooperation and     Click here to enter    Click here to enter    Click here to enter    Click here to enter
 Customer Relations     text.                  text.                  text.                  text.
----------------------------------------------------------------------------------------------------------------
3. Supervision and     Click here to enter    Click here to enter    Click here to enter    Click here to enter
 Resources Management   text.                  text.                  text.                  text.
----------------------------------------------------------------------------------------------------------------
* If zero, then element not applicable.

Basic Pay Increase %: Click here to enter text.

Contribution Award $: Click here to enter text.

Hours: Click here to enter text.

Summary Rating A (Acceptable) or U (Unacceptable)
Must be U if any critical element is rated U
Click here to enter text.

Overall Contribution Score (Weighted Average): Click here to enter 
text.

SUPLEMENTAL CRITERIA (OPTIONAL). FOR EXAMPLE, SPECIFIC OBJECTIVES, 
STANDARDS, TASKINGS, AND/OR EXAMPLES:

REMARKS:

------------------------------------------------------------------------
  Signatures and
       date             CCS plan       Interim review       Appraisal
------------------------------------------------------------------------
Employee
------------------------------------------------------------------------
Supervisor
------------------------------------------------------------------------
Note: Employee's signature under ``CCS Plan'' signifies that he or she
  has been given a copy of this summary and has a copy of Elements,
  Descriptors, Discriminators, and Standards applicable to his or her
  career track.

BILLING CODE 5001-06-P

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  OFFICE OF NAVAL RESEARCH CONTRIBUTION-BASED COMPENSATION SYSTEM (CCS)
                                 SUMMARY
                        [Administrative Support]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Employee Name:           Pay Pool Code:           Appraisal Period
                                                   Ending:
Click here to enter      Click here to enter      Click here to enter
 text.                    text.                    text.
------------------------------------------------------------------------
Title:                   Pay Plan/Series:         Career Level:
Click here to enter      Click here to enter      Click here to enter
 text.                    text.                    text.
------------------------------------------------------------------------
SSN; Click here to       Supervisor: Click here
 enter text.              to enter text.
------------------------------------------------------------------------

Most Recent OCS: Click here to enter text.
Present Salary: Click here to enter text.
Scores within NPR Equivalent to Present Salary: Click here to enter 
text.


[[Page 30234]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                     Rating of Record
                    Critical Elements                            * Weight                  Score                 Net Score             Acceptable or
                                                                                                                                       Unacceptable
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Problem Solving......................................  Click here to enter     Click here to enter     Click here to enter     Click here to enter
                                                           text.                   text.                   text.                   text.
2. Cooperation/Customer Relations/Supervision...........  Click here to enter     Click here to enter     Click here to enter     Click here to enter
                                                           text.                   text.                   text.                   text.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* If zero, then element not applicable.

Basic Pay Increase %: Click here to enter text.

Contribution Award $: Click here to enter text.

Hours: Click here to enter text.
Summary Rating A (Acceptable) or U (Unacceptable)
Must be U if any critical element is rated U
Click here to enter text.

Overall Contribution Score (Weighted Average):
Click here to enter text.

SUPPLEMENTAL CRITERIA (OPTIONAL). FOR EXAMPLE, SPECIFIC OBJECTIVES, 
STANDARDS, TASKINGS, AND/OR EXAMPLES:

REMARKS:

 
------------------------------------------------------------------------
  Signatures and
       Date             CCS Plan       Interim Review       Appraisal
------------------------------------------------------------------------
Employee           .................  ................  ................
------------------------------------------------------------------------
Supervisor         .................  ................  ................
------------------------------------------------------------------------
NOTE: Employee's signature under ``CCS Plan'' signifies that he or she
  has been given a copy of this summary and has a copy of Elements,
  Descriptors, Discriminators, and Standards applicable to his or her
  career track.

BILLING CODE 5001-06-P

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[GRAPHIC] [TIFF OMITTED] TN28MY10.019

Appendix F: Computation of the IPS and the NPR

    The ONR demonstration project will use an IPS which links basic 
pay to contribution scores determined by the CCS process. The area 
where basic pay and level of contribution are assumed to be properly 
related is called the NPR. An employee whose CCS score and rate of 
basic pay plot within the NPR is considered to be contributing at a 
level consistent with pay. Employees whose pay plots below the NPR 
for their assessed score are considered ``undercompensated'' while 
employees whose score and pay plot above the NPR are considered 
``overcompensated.''
    The purpose of this scoring and pay structure is to spread the 
full range of basic pay provided by the GS, between GS-1, step 1, 
and GS-15, step 10, into 80 intervals (scores and pay above those 
points are related using the same parameters). Each interval is a 
fixed percentage of the pay associated with the previous point.
    For each possible contribution score available to employees, the 
NPR spans a basic pay range of 12 percent. The lower boundary (or 
``rail'') is established by fixing the basic pay equivalent to GS-1, 
step 1, with a CCS score of zero. The upper boundary is fixed at the 
basic pay equivalent to GS-15, step 10, with a CCS score of 80. The 
distance between these upper and lower rails for a given overall 
contribution score is then computed to ensure the range of 12 
percent of basic pay is maintained for each available CCS score. The 
middle rail of the NPR is computed as 6 percent above the lower 
rail. This point is used in connection with certain limits 
established for pay increases (see section IV.C.7).
    From the above considerations, five variables, or inputs, were 
identified. They are as follows:
    1. Variable A: GS-1, step 1 (lowest salary).
    2. Variable B: GS-15, step 10 (highest salary).
    3. Variable C: Current C-values.
    4. Variable M: 6 percent (middle rail computation above the low 
rail).
    5. Variable H: 12 percent (high rail computation above low 
rail).
    Other variables are as follows:
    1. Variable N: Number of C-value steps at GS-15, step 10.
    2. Variable P (step increase): Salary value for each C-value 
equal to 1 + percentage increase.
    From these variables, the following formula definitions were 
developed:

Low rail = A*(P[caret]C)
Mid rail = (1+M)*A*(P[caret]C)

[[Page 30237]]

High rail = (1+H)*A*(P[caret]C)
Where P = (B/(A*(1+H)))[caret](1/N)

    As an example, a result of the above computation, using the 2010 
GS Salary Table, P (step increase) equals 1.023664623. Attachment 
(1) is a complete list of CCS pay band scores and basic pay ranges. 
Attachment (2) contains graphic representations of these tables for 
each career track. Once the C-values (0-80) are determined, the CCS 
pay bands and scores are extended at the same percentage increments 
as were computed for the step increase above. These C-values are 
extended to encompass the equivalent of EX-IV effective January 
2010. In the example, EX-IV is equal to basic pay of $155,500 and is 
encompassed by the C-value 89 ($142,734 to $159,862).

                                              Salary Ranges Associated with Each C-Value Using 2010 Inputs
                               [GS 1-Step 1: 17,803 Hi%: 12.00% C-values: 80 GS 15-Step 10: 129,517 Mid%: 6.00%]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 C-value                     Low Rail        Mid Rail        High Rail        C-value        Low Rail        Mid Rail        High Rail
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................           17803           18871           19939              48           54709           57992           61275
1.......................................           18224           19318           20411              49           56004           59364           62725
2.......................................           18656           19775           20894              50           57329           60769           64209
3.......................................           19097           20243           21389              51           58686           62207           65728
4.......................................           19549           20722           21895              52           60075           63679           67284
5.......................................           20012           21212           22413              53           61497           65186           68876
6.......................................           20485           21714           22943              54           62952           66729           70506
7.......................................           20970           22228           23486              55           64442           68308           72175
8.......................................           21466           22754           24042              56           65967           69925           73883
9.......................................           21974           23293           24611              57           67528           71579           75631
10......................................           22494           23844           25193              58           69126           73273           77421
11......................................           23026           24408           25790              59           70762           75007           79253
12......................................           23571           24986           26400              60           72436           76782           81128
13......................................           24129           25577           27025              61           74150           78599           83048
14......................................           24700           26182           27664              62           75905           80459           85014
15......................................           25285           26802           28319              63           77701           82363           87025
16......................................           25883           27436           28989              64           79540           84312           89085
17......................................           26496           28085           29675              65           81422           86308           91193
18......................................           27123           28750           30377              66           83349           88350           93351
19......................................           27764           29430           31096              67           85322           90441           95560
20......................................           28422           30127           31832              68           87341           92581           97822
21......................................           29094           30840           32585              69           89408           94772          100136
22......................................           29783           31570           33357              70           91523           97015          102506
23......................................           30487           32317           34146              71           93689           99311          104932
24......................................           31209           33081           34954              72           95906          101661          107415
25......................................           31947           33864           35781              73           98176          104066          109957
26......................................           32703           34666           36628              74          100499          106529          112559
27......................................           33477           35486           37495              75          102877          109050          115223
28......................................           34270           36326           38382              76          105312          111631          117949
29......................................           35081           37185           39290              77          107804          114272          120741
30......................................           35911           38065           40220              78          110355          116977          123598
31......................................           36761           38966           41172              79          112967          119745          126523
32......................................           37630           39888           42146              80          115640          122579          129517
33......................................           38521           40832           43143              81          118377          125479          132582
34......................................           39433           41798           44164              82          121178          128449          135719
35......................................           40366           42788           45210              83          124046          131488          138931
36......................................           41321           43800           46279              84          126981          134600          142219
37......................................           42299           44837           47375              85          129986          137785          145585
38......................................           43300           45898           48496              86          133062          141046          149030
39......................................           44324           46984           49643              87          136211          144384          152556
40......................................           45373           48096           50818              88          139435          147801          156167
41......................................           46447           49234           52021              89          142734          151298          159862
42......................................           47546           50399           53252              90          146112          154879          163645
43......................................           48671           51592           54512              91          149570          158544          167518
44......................................           49823           52813           55802              92          153109          162296          171482
45......................................           51002           54062           57123
46......................................           52209           55342           58474
47......................................           53445           56651           59858
--------------------------------------------------------------------------------------------------------------------------------------------------------


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[[Page 30239]]

Appendix G: Intervention Model

----------------------------------------------------------------------------------------------------------------
             Intervention                  Expected effects             Measures               Data sources
----------------------------------------------------------------------------------------------------------------
1. COMPENSATION
a. Pay banding.......................  Increased                Perceived flexibility..  Attitude survey.
                                        organizational
                                        flexibility.
                                       Reduced administrative   Actual/perceived time    Personnel office data,
                                        workload, paper work     savings.                 PME results, attitude
                                        reduction.                                        survey.
                                       Advanced in-hire rates.  Starting salaries of     Workforce data.
                                                                 banded v. non-banded
                                                                 employees.
                                       Slower pay progression   Progression of new       Workforce data.
                                        at entry levels.         hires over time by
                                                                 band, career path.
                                       Increased pay potential  Mean salaries by band,   Workforce data.
                                                                 group, demographics.
                                                                Total payroll costs....  Personnel office data.
                                       Increased satisfaction   Employee perceptions of  Attitude survey.
                                        with advancement.        advancement.
                                       Increased pay            Pay satisfaction,        Attitude survey.
                                        satisfaction.            internal/external
                                                                 equity.
                                       Improved recruitment...  Offer/acceptance         Personnel office data.
                                                                 ratios; Percent
                                                                 declinations.
b. Conversion buy-in.................  Employee acceptance....  Employee perceptions of  Attitude survey.
                                                                 equity, fairness.
                                                                Cost as a percent of     Workforce data.
                                                                 payroll.
c. Pay differentials/adjustments.....  Increased incentive to   Perceived motivational   Attitude survey.
                                        accept supervisory/      power.
                                        team leader positions.
2. PERFORMANCE MANAGEMENT
a. Cash awards/bonuses...............  Reward/motivate          Perceived motivational   Attitude survey.
                                        performance.             power.
                                       To support fair and      Amount and number of     Workforce data.
                                        appropriate              awards by group,
                                        distribution of awards.  demographics.
                                                                Perceived fairness of    Attitude survey.
                                                                 awards.
                                                                Satisfaction with        Attitude survey.
                                                                 monetary awards.
b. Performance based pay progression.  Increased pay-           Perceived pay-           Attitude survey.
                                        performance link.        performance link.
                                                                Perceived fairness of    Attitude survey.
                                                                 ratings.
                                       Improved performance     Satisfaction with        Attitude survey.
                                        feedback.                ratings.
                                                                Employee trust in        Attitude survey.
                                                                 supervisors.
                                                                Adequacy of performance  Attitude survey.
                                                                 feedback.
                                       Decreased turnover of    Turnover by performance  Workforce data.
                                        high performers/         rating scores.
                                        Increased turnover of
                                        low performers.
                                       Differential pay         Pay progression by       Workforce data.
                                        progression of high/     performance scores,
                                        low performers.          career path.
                                       Alignment of             Linkage of performance   Performance objectives,
                                        organizational and       objectives to            strategic plans.
                                        individual performance   strategic plans/goals.
                                        objectives and results.
                                       Increased employee       Perceived involvement..  Attitude survey/focus
                                        involvement in                                    groups.
                                        performance planning
                                        and assessment.
                                                                Performance management.  Personnel regulations.
c. New appraisal process.............  Reduced administrative   Employee and supervisor  Attitude survey.
                                        burden.                  perceptions of revised
                                                                 procedures.
                                       Improved communication.  Perceived fairness of    Focus groups.
                                                                 process.
d. Performance development...........  Better communication of  Feedback and coaching    Focus groups.
                                        performance              procedures used.        Personnel office data.
                                        expectations.
                                                                Time, funds spent on     Training records.
                                                                 training by
                                                                 demographics.
                                       Improved satisfaction    Perceived workforce      Attitude survey.
                                        and quality of           quality.
                                        workforce.
3. ``WHITE COLLAR'' CLASSIFICATION
a. Improved classification systems     Reduction in amount of   Time spent on            Personnel office data.
 with generic standards.                time and paperwork       classification
                                        spent on                 procedures.
                                        classification.
                                                                Reduction of paperwork/  Personnel office data.
                                                                 number of personnel
                                                                 actions
                                                                 (classification/
                                                                 promotion).
                                       Ease of use............  Managers' perceptions    Attitude survey.
                                                                 of time savings, ease
                                                                 of use.
b. Classification authority delegated  Increased supervisory    Perceived authority....  Attitude survey.
 to managers.                           authority/
                                        accountability.
                                       Decreased conflict       Number of                Personnel records.
                                        between management and   classification
                                        personnel staff.         disputes/appeals pre/
                                                                 post.

[[Page 30240]]

 
                                                                Management satisfaction  Attitude survey.
                                                                 with service provided
                                                                 by personnel office.
                                       No negative impact on    Internal pay equity....  Attitude survey.
                                        internal pay equity.
c. Dual career ladder................  Increased flexibility    Assignment flexibility.  Focus groups, surveys.
                                        to assign employees.
                                       Improved internal        Perceived internal       Attitude survey.
                                        mobility.                mobility.
                                       Increased pay equity...  Perceived pay equity...  Attitude survey.
                                       Flatter organization...  Supervisory/non-         Workforce data.
                                                                 supervisory ratios.     Attitude survey.
                                       Improved quality of      Employee perceptions of  Attitude survey.
                                        supervisory staff.       quality or supervisory.
4. Modified RIF
                                       Minimize loss of high    Separated employees by   Workforce data,
                                        performing employees     demographics,            Attitude survey/focus
                                        with needed skills.      performance scores.      group.
                                       Contain cost and         Satisfaction with RIF    Attitude survey/focus
                                        disruption.              Process.                 group.
                                                                Cost comparison of       Personnel office/budget
                                                                 traditional vs.          data.
                                                                 Modified RIF.
                                                                Time to conduct RIF--    Personnel office data.
                                                                 personnel office data.
                                                                Number of Appeals/       Personnel office data.
                                                                 reinstatements.
5. Hiring Authority
a. Delegated Examining...............  Improved ease and        Perceived flexibility    Attitude survey.
                                        timeliness of hiring     in authority to hire.
                                        process.
                                       Improved recruitment of  Offer/accept ratios....  Personnel office data.
                                        employees in shortage
                                        categories.
                                                                Percent declinations...  Personnel office data.
                                                                Timeliness of job        Personnel office data.
                                                                 offers.
                                                                GPAs of new hires,       Personnel office data.
                                                                 educational levels.
                                       Reduced administrative   Actual/perceived skills  Attitude survey.
                                        workload/paperwork
                                        reduction.
b. Term Appointment Authority........  Increased capability to  Number/percentage of     Workforce data.
                                        expand and contract      conversions from        Personnel office data.
                                        workforce.               modified term to
                                                                 permanent appointments.
c. Flexible Probationary Period......  Expanded employee        Average conversion       Workforce data.
                                        assessment.              period to permanent     Personnel office data.
                                                                 status.
                                                                Number/percentage of     Workforce data.
                                                                 employees completing    Personnel office data.
                                                                 probationary period.
                                                                Number of separations    Workforce data.
                                                                 during probationary     Personnel office data.
                                                                 period.
6. Expanded Development Opportunities
a. Sabbaticals.......................  Expanded range of        Number and type of       Workforce data.
                                        professional growth      opportunities taken.
                                        and development.
                                       Application of enhanced  Employee and supervisor  Attitude survey.
                                        knowledge and skills     perceptions.
                                        to work product.
b. Critical Skills Training..........  Improved organizational  Number and type of       Personnel office data
                                        effectiveness.           training.
                                                                Placement of employees,  Personnel office data
                                                                 skills imbalances
                                                                 corrected.
                                                                Employee and supervisor  Attitude survey
                                                                 perceptions.
                                                                Application of           Attitude survey/focus
                                                                 knowledge gained from    group.
                                                                 training.
7. Combination of All Interventions
All..................................  Improved organizational  Combination of           All data sources.
                                        effectiveness.           personnel measures.
                                       Improved management of   Employee/Management job  Attitude survey.
                                        workforce.               satisfaction
                                                                 (intrinsic/extrinsic).
                                       Improved planning......  Planning procedures....  Strategic planning
                                                                                          documents.
                                                                Perceived effectiveness  Attitude survey.
                                                                 of planning procedures.
                                       Improved cross           Actual/perceived         Organizational charts.
                                        functional               coordination.
                                        coordination.
                                       Increased product        Customer satisfaction..  Customer satisfaction
                                        success.                                          surveys.
                                       Cost of innovation.....  Project training/        Demo project office
                                                                 development costs        records.
                                                                 (staff salaries,        Contract documents.
                                                                 contract cost,
                                                                 training hours per
                                                                 employee).
8. Context:
Regionalization......................  Reduced servicing        HR servicing ratios....  Personnel office data,
                                        ratios/costs.                                     workforce data.

[[Page 30241]]

 
                                                                Average cost per         Personnel office data,
                                                                 employee served.         workforce data.
                                       No negative impact on    Service quality,         Attitude survey/focus
                                        service quality.         timeliness.              groups.
----------------------------------------------------------------------------------------------------------------

[FR Doc. 2010-12690 Filed 5-27-10; 8:45 am]
BILLING CODE 5001-06-P