DoD Mulls Buyouts, Pay Bands

The Defense Department is moving forward with a plan to make sweeping changes in the way civilian managers and employees are appraised, promoted and paid.

Permanent buyout authority, a three-level structure of pay bands and greater control for managers over raises are among the proposals the department and employee unions are considering. A measure that would ensure that supervisors are paid more than the employees they manage is also on the table.

Other possible reforms include:

• Replacing annual within-grade increases with performance-based salary increases.
• Making early retirement offers more attractive by reducing the effects of the 2 percent annuity reduction early retirees must accept.
• Eliminating statutory restrictions on employee details.
• Establishing two hiring authorities: permanent and five-year temporary. Temporary employees could become permanent employees through special placement procedures.
• Allowing for better links between employee performance and personnel actions.

DoD has created five working groups to draft a new personnel system. The groups are working with the Defense Partnership Council, which includes union representatives, to come up with a legislative plan by next month.

Because the Defense Department employs almost half of the federal government's civilian workforce, what DoD does may be the basis for changes across government. An Office of Personnel Management spokeswoman said OPM is providing technical assistance to the Pentagon as its legislative package is prepared.

Federal Managers Association Legislative Director Mark Gable said the proposals under consideration are good for managers.

"DoD tends to do a good job with personnel issues," Gable said. But he noted that the short election-year congressional session means any legislative package DoD submits may have to wait until next year for consideration on Capitol Hill. Gable said personnel changes included in an Internal Revenue Service reform bill may be the only civil service issues Congress takes up in 1998. "The IRS bill is the only thing that's got momentum," he said.