[Federal Register: March 12, 1997 (Volume 62, Number 48)]
[Notices]
[Page 11675-11698]

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Part VII

Office of Personnel Management

_______________________________________________________________________

Proposed Laboratory Personnel Management Demonstration Project;
Department of the Army, U.S. Army Medical Research and Materiel
Command, Fort Detrick, Frederick, Maryland; Notice

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OFFICE OF PERSONNEL MANAGEMENT


Proposed Laboratory Personnel Management Demonstration Project;
Department of the Army, U.S. Army Medical Research and Materiel
Command, Fort Detrick, Frederick, Maryland

AGENCY: Office of Personnel Management.

ACTION: Notice of Intent to Implement Demonstration Project.

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SUMMARY: Title VI of the Civil Service Reform Act, 5 U.S.C. 4703,
authorizes the Office of Personnel Management (OPM) to conduct
demonstration projects that experiment with new and different personnel
management concepts to determine whether such changes in personnel
policy or procedures would result in improved Federal personnel
management.
    Public Law 103-337, October 5, 1994, permits the Department of
Defense (DOD), with the approval of the OPM, to carry out personnel
demonstration projects generally similar in nature to the China Lake
demonstration project at DOD Science and Technology (S&T) Reinvention
Laboratory sites. The Army is proposing demonstration projects
initially to cover five of its S&T Reinvention Laboratories: the Army
Research Laboratory; the Missile Research, Development, and Engineering
Center; the Aviation Research, Development, and Engineering Center; the
Medical Research and Materiel Command; and the Waterways Experiment
Station. This proposal is for the Medical Research and Materiel Command
(MRMC).

DATES: To be considered, written comments must be submitted on or
before May 20, 1997; two public hearings will be scheduled as follows:
(1) April 21, 1997, at 10:00 a.m., at Fort Detrick, Maryland. (2) April
21, 1997, at 1:00 p.m by Video Teleconference (VTC) and/or conference
calls from Fort Detrick, Maryland covering all MRMC sites
geographically located outside of the Fort Detrick, Maryland commuting
area. At the time of the hearings, interested persons or organizations
may present their written or oral comments for the April 21, 1997
hearing or oral comments for the VTC/conference call hearing on the
proposed demonstration project. The hearings will be informal.
    Anyone wishing to testify should contact the person listed under
FOR FURTHER INFORMATION CONTACT, and state the hearing location and
date, so that OPM can plan the hearings and provide sufficient time for
all interested persons and organizations to be heard. Priority will be
given to those on the schedule, with others speaking in any remaining
available time. Each speaker's presentation will be limited to 10
minutes. Written comments may be submitted to supplement oral testimony
during the public comment period.

ADDRESSES: Comments may be mailed to Fidelma A. Donahue, U.S. Office of
Personnel Management, 1900 E Street, NW, Room 7460, Washington, DC
20415; the public hearings will be held at the U.S. Army Research and
Material Command, Strough Auditorium, 504 Scott Street, Building 611,
Fort Detrick, Maryland; and, the VTC/conference call hearings will be
conducted at the U.S. Army Research and Material Command, Strough
Auditorium, 504 Scott Street, in Building 810, Conference Rooms 1 and
2, Fort Detrick, Maryland.

FOR FURTHER INFORMATION CONTACT: (1) On proposed demonstration project:
Ms. Carol Gartrell, U.S. Army Medical Research and Materiel Command,
ATTN: MCMR-RMP, 504 Scott Street, Fort Detrick, Maryland 21702-5012,
phone 301-619-7255.
    (2) On proposed demonstration project and public hearings: Fidelma
A. Donahue, U.S. Office of Personnel Management, 1900 E Street, NW,
Room 7460, Washington, DC 20415, phone 202-606-1138.

SUPPLEMENTARY INFORMATION: Since 1966, numerous studies of DOD
laboratories have been conducted on laboratory quality and personnel.
Almost all of these studies have recommended improvements in civilian
personnel policy, organization, and management. The proposed project
involves simplified job classification, pay banding, pay-for-
performance management system, streamlined hiring processes, expanded
employee developmental opportunities, and modified Reduction-in-Force
(RIF) procedures.

Office of Personnel Management
James B. King,
Director

Table of Contents

I. Executive Summary
ll. Introduction
    A. Purpose
    B. Problems with the Present System
    C. Changes Required/Expected Benefits
    D. Participating Organization
    E. Participating Employees
    F. Labor Participation
    G. Project Design
    H. Personnel Management Board
Ill. Personnel System Changes
    A. Broadbanding
    B. Classification
    C. Pay-for-Performance Management System
    D. Hiring and Appointment Authorities
    E. Expanded Developmental Opportunities Program
    F. Revised Reduction-In-Force (RIF) Procedures
IV. Training
V. Conversion
VI. Project Duration
VII. Evaluation Plan
VIII. Demonstration Project Costs
IX. Required Waivers to Law and Regulation

Appendix A: Occupational Series by Occupational Family
Appendix B: Project Evaluation and Oversight
Appendix C: Performance Elements
Appendix D: Benchmark Performance Standards

I. Executive Summary

    This project was designed by the Department of the Army (DA), with
participation of and review by the Department of Defense (DOD) and the
Office of Personnel Management (OPM). The purpose of the project is to
achieve the best workforce for the Medical Research & Materiel Command
(MRMC) mission, adjust the workforce for change, and improve workforce
quality.
    The foundations of this project are based on the concept of linking
performance to pay for all covered positions; simplifying paperwork and
the processing of classification and other personnel actions;
emphasizing partnerships among management, employees and unions
representing covered employees; and delegating classification and other
authorities to line managers. Additionally, the research intellect of
the MRMC workforce will be revitalized through the use of expanded
developmental opportunities. The use of these expanded opportunities
will reinvigorate the creative intellect of the research and
development community.
    Development and execution of this project will be in-house budget
neutral, based on a baseline of September 1995 in-house costs and
consistent with the DA plan to downsize laboratories. Army managers at
the DOD S&T Reinvention Laboratory sites will manage and control their
personnel costs to remain within established in-house budgets. An in-
house budget is a compilation of costs of the many diverse components
required to fund the day-to-day operations of a laboratory. These
components generally include pay of people (labor, benefits, overtime,
awards), training, travel, supplies, non-capital equipment, and other
costs depending on the specific function of the activity.
    This project will be under the joint sponsorship of the Assistant
Secretary of the Army for Research, Development

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and Acquisition and the Assistant Secretary of the Army for Manpower
and Reserve Affairs. The Commander , U.S. Army Medical Command
(MEDCOM), will execute and manage the project. Project oversight within
the Army will be achieved by an executive steering committee made up of
top-level executives, co-chaired by the Deputy Assistant Secretary of
the Army for Research and Technology and the Deputy Assistant Secretary
of the Army (Civilian Personnel Policy)/Director, Civilian Personnel.
Oversight external to the Army will be provided by DOD and OPM.

II. Introduction

A. Purpose

    The purpose of the project is to demonstrate that the effectiveness
of DOD laboratories can be enhanced by allowing greater managerial
control over personnel functions and, at the same time, expanding the
opportunities available to employees through a more responsive and
flexible personnel system. The quality of DOD laboratories, their
people, and products has been under intense scrutiny in recent years.
The perceived deterioration of quality is due, in substantial part, to
the erosion of control which line managers have over their human
resources. This demonstration, in its entirety, attempts to provide
managers, at the lowest practical level, the authority, control, and
flexibility needed to achieve quality laboratories and quality
products.

B. Problems with the Present System

    The MRMC provides medical solutions for military requirements to
protect and sustain the force. To do this, its management must acquire
and retain an enthusiastic, innovative, and highly educated/trained
workforce. The MRMC 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.
Today, industry laboratories can make an offer of employment to a
promising new hire before the government can prepare the paperwork
necessary to begin the recruitment process.
    Currently, jobs are described using a cumbersome classification
system that is overly complex and specialized. This hampers a manager's
ability to shape the workforce and match the positions while making
best use of the employees. Managers must be given local control of
positions and their classification to move both their employees and
vacancies freely within their organization to other lines of the
business activities to match the life cycle needs of supported
customers.
    These issues work together to hamper supervisors in all areas of
human resource management. Hiring restrictions and overly complex job
classifications, coupled with poor tools for rewarding and motivating
employees and a system that does not assist managers in removing poor
performers, builds stagnation in the workforce and wastes valuable
time.

C. Changes Required/Expected Benefits

    This project is expected to demonstrate that a human resource
system tailored to the mission and requirements of the MRMC will result
in: (a) Increased quality in the total workforce and the products they
produce; (b) increased timeliness of key personnel processes; (c)
increased retention of high quality employees and increased non-
retention of poor quality employees; and (d) increased satisfaction
with the MRMC and its products by all customers served.
    The MRMC demonstration project builds on the successful features of
demonstration projects at China Lake and the National Institute of
Standards and Technology (NIST). These demonstration projects have
produced impressive statistics on the job satisfaction for their
employees versus that for the federal workforce in general. Therefore,
in addition to expected benefits mentioned above, the MRMC
demonstration project expects to find more satisfied employees on many
aspects of the demonstration project including pay equity,
classification accuracy, and fairness of performance management. A full
range of measures will be collected during Project Evaluation (Section
VII).

D. Participating Organization

    This demonstration project will cover approximately 1250 MRMC
civilian employees at all geographic sites within the United States. It
should be noted that many sites currently employ fewer than 10 people
and that the sites may change as the MRMC reorganizes, realigns, and
complies with Base Realignment and Closure Act requirements. Successor
organizations will continue coverage in the demonstration project.
Approximately 46 percent of covered employees are located at Fort
Detrick, Frederick, Maryland. The remaining employees are located at
the following sites: Aberdeen Proving Ground, Maryland; Falls Church,
Virginia; Fort Rucker, Alabama; Fort Sam Houston, Texas; Natick,
Massachusetts; Washington, DC; Tobyhanna Army Depot, Pennsylvania; Fort
Lee, Virginia; Tracy, California; Ogden, Utah; Brooks Air Force Base,
Texas; Dayton, Ohio; Tripler Army Medical Center, Hawaii; and Fort
Bragg, North Carolina. Additionally, the MRMC has some employees
participating in the Flexiplace Program who are geographically located
at Fort Collins, Colorado; Clarksville, Tennessee; and Jefferson,
Maryland.

E. Participating Employees

    The demonstration project includes appropriated funded civilian
employees in the competitive and excepted service (to include non-
citizens hired in the absence of qualified citizens) paid under the
General Schedule (GS) and Scientific and Professional (ST) pay systems,
and DA Interns. Senior Executive Service (SES) employees, Federal Wage
System employees, and employees assigned to the GS-080 series and
presently covered by the Civilian Intelligence Personnel Management
System (CIPMS), will not be covered in the demonstration project.
Personnel added to the MRMC in like positions, either through
appointment, promotion, reassignment, change to lower grade or where
their functions and positions have been transferred into the MRMC, will
be converted to the demonstration project.
    The personnel systems for 5 U.S.C. 3104 (ST) positions will change
only to the extent that 3104 positions are in the same performance
appraisal and awards systems as other positions. Classification,
staffing, compensation and reduction-in-force procedures, however, will
not change. 5 U.S.C. 3104 employees will not receive the pro rata share
payout upon completion of one year of coverage in the demonstration
project. Pay adjustments for their positions under the project will be
carried out in accordance with existing Federal rules pertaining to
3104 pay adjustments. (See 5 U.S.C. 5376)

F. Labor Participation

    The National Federation of Federal Employees (NFFE) and the
American Federation of Government Employees (AFGE), represent
professional and nonprofessional GS employees at some sites within the
MRMC. The MRMC is continuing to fulfill its obligations to consult and/
or negotiate with the NFFE and AFGE, as appropriate, in accordance with
5 U.S.C. 4703 (F) and 7117. The participation with the NFFE, and AFGE
is within the spirit and intent of Executive Order 12871. The
bargaining units of MRMC not endorsing the demonstration project will
not participate.

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G. Project Design

    In October 1994, the MRMC began development of the specifics of
this personnel demonstration proposal. A Personnel Demonstration
Project Office was established and administrative support added in
April 1995. Briefings of the proposal were initially conducted for the
workforce at every participating subordinate activity with subsequent
briefings provided upon request by Commanders/Directors.
    Status of the project is provided to subordinate activity
Commanders/Directors, usually on a weekly basis for dissemination to
all employees. An electronic mail address was established in the Fall
of 1994 and made available to all employees and managers for the
purpose of expressing opinions and/or obtaining specific information
about the project.
    Review of the proposal and input by the MEDCOM, as well as critical
and extensive reviews by Headquarters DA, the Office of the Secretary
of Defense, and OPM since April 1995, have led to the current
configuration of the proposal.

H. Personnel Management Board

    The MRMC intends to establish an appropriate balance between the
personnel management authority/accountability delegated to subordinate
activity Commanders/ Directors and MRMC management/oversight
responsibilities by establishing a Personnel Management Board (PMB).
The Chairperson and members will be appointed by the Commander MRMC,
and oversee/provide policy, guidelines and corrective action as
appropriate as subordinate activity Commanders/Directors execute the
following:
    1. formulate and execute the civilian pay budget;
    2. determine the composition of the pay-for-performance pay pools
in accordance with the guidelines of this proposal and internal
procedures;
    3. administer funds allocation to pay pool managers;
    4. determine hiring and promotion salaries as well as exceptions to
pay-for-performance salary increases;
    5. provide guidance to pay pool managers;
    6. manage the awards pools;
    7. select participants for the Expanded Developmental Opportunities
Program, long term training, and any special developmental assignments;
    8. adhere to guidelines concerning the promotion of employees into
salary ranges designated ``high grades'';
    9. ensure in-house budget neutrality to include tracking of average
salaries, FTEs, etc.
    10. contact the PMB designee for problem resolution, recommending
changes in policy/procedure, etc.
    11. ensure that all employees are treated in a fair and equitable
manner in accordance with all policies, regulations, and guidelines
covering this demonstration project.

III. Personnel System Changes

A. Broadbanding

Occupational Families
    Occupations at the MRMC will be grouped into occupational families.
Occupations will be grouped according to similarities in type of work
and customary requirements for formal training or credentials. The
common patterns of advancement within the occupations as practiced at
DOD Laboratories and in the private sector will also be considered. The
current occupations and grades have been examined, and their
characteristics and distribution have served as guidelines in the
development of the four occupational families described below.
Positions included in each occupational family are listed in Appendix
A.
    1. Engineers and Scientists. This occupational family includes all
technical professional positions, such as positions in the biological,
physical and social sciences, medical, veterinary, mathematical, and
engineering fields. Ordinarily, specific course work or educational
degrees are required for these occupations.
    2. E&S Technicians. This occupational family contains specialized
functions in fields that provide direct technical support to the
scientific/engineering effort. Positions in these occupations may or
may not require completion of formal college course work. However,
training and skills in the various specialties are generally required.
    3. Administrative. This occupational family contains specialized
functions in such fields as management analysis, accounting, budgeting,
contracting, purchasing, legal, business and industry, library, quality
assurance, and supply. Special skills in administrative fields or
special degrees are required.
    4. General Support. This occupational family is composed of
positions requiring special skills and knowledge, such as typing,
shorthand, or office automation skills, and job related experience.
Clerical work usually involves the processing and maintenance of
records. Assistant work requires knowledge of methods and procedures
within a specific administrative area. Support functions include
positions such as secretary, mail clerk, medical clerk, accounting
technician and supply technician.
Pay Bands
    Each occupational family will be composed of discrete pay bands
(levels) corresponding to recognized advancement within the
occupations. These pay bands will replace grades. They will not be the
same for all occupational families. Each occupational family will be
divided into three to five pay bands, each pay band covering the same
pay range now covered by one or more grades. A salary overlap, similar
to the current overlap between GS grades, will be maintained.
    Ordinarily, an individual will be hired at the lowest salary in a
pay band. Exceptional qualifications, specific organizational
requirements, or other compelling reasons may lead to a higher entrance
level within a band.
    The MRMC broadbanding plan expands the broadbanding concept used at
China Lake and NIST by creating Pay Band V of the Engineers and
Scientists occupational family. This pay band is designed for senior
technical managers and senior scientists/engineers.
    Current OPM guidelines covering the Senior Executive Service and
Scientific and Professional (ST) positions do not fully meet the needs
of MRMC. The SES designation is appropriate for executive level
managerial positions whose classification exceeds the GS-15 grade
level. The primary knowledges and abilities of SES positions relate to
supervisory and managerial responsibilities. Positions classified as ST
are designed for bench research scientists and engineers. OPM
guidelines state that the duties and responsibilities of ST positions
may only include minimal managerial or supervisory responsibility.
    MRMC currently has many division/directorate chief positions that
have characteristics of both SES and ST classifications. Most division/
directorate chiefs in MRMC are responsible for supervising other GS-15
positions, such as branch chiefs, non-supervisory researcher scientists
and engineers. Most of these senior positions are classified at the GS-
15 level. MRMC management considers the primary requirement for
division/directorate chiefs to have knowledge of and expertise in the
specific scientific and technology areas related to their mission. The
ability to manage, while important, is considered secondary.
Historically, these positions have been filled by employees who possess
primarily scientific/engineering credentials and who are considered
experts in their field by the scientific

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community. While it is clear these positions warrant classification
beyond the GS-15 level, attempts to classify most of the positions as
SES have been difficult because of the organizational structure of
MRMC. Classification of the positions as ST is also not an option
because the supervisory responsibilities inherent in division/
directorate chief positions cannot be ignored. MRMC has positions that
do not strictly conform to OPM definitions of either the SES or ST.
    The purpose of Pay Band V is to overcome the difficulties
identified above by creating a category for two types of positions--the
senior technical manager (with full supervisory authority) and the
senior scientist engineer (less than full supervisory authority).
Current GS-15 division/directorate chiefs will convert into the
demonstration project at Pay Band IV. After conversion, they will be
reviewed against established criteria to determine if they should be
reclassified to Pay Band V. The proposed salary range is the same as
currently exists for ST positions (minimum of 120% of the minimum rate
of basic pay for GS-15 with a maximum of the basic rate of pay
established for level IV of the Executive Schedule). Vacant positions
in Pay Band V will be competitively filled to ensure that selections
are made from among the world's preeminent researchers and technical
leaders in the specialty fields. Panels of experts from the discipline
or an allied discipline that the recruitment action seeks to fill will
be created to assist in filling Pay Band V positions. Panel members
will be selected from senior military and civilian employees of the
MRMC, and an equal number of individuals of equivalent stature from
outside the activity to ensure impartiality, breadth of technical
expertise, and a rigorous and demanding review. The panel will apply
criteria developed largely from the current OPM Research Grade
Evaluation Guide for positions exceeding the GS-15 level. The same
procedure will be used for evaluating senior technical manager
positions however, the rating criteria will be adjusted to account for
the differences in the positions, such as greater emphasis on technical
program management and supervisory abilities.
    The final component of Pay Band V is the management of all Pay Band
V assets. Specifically, this includes authority to classify, create,
abolish positions as circumstances warrant; recruit and reassign
employees in this pay band; set pay and to have their performance
appraised under this project's Pay for Performance System. This
authority will be executed within parameters to be established at the
DA level, to include controls on the numbers of Pay Band V positions
and recruitment/promotion criteria. The specific details regarding the
control and management of Pay Band V assets will be included in the
demonstration's operating procedures. The laboratory wants to
demonstrate increased effectiveness by gaining greater managerial
control and authority, consistent with merit, affirmative action, and
equal employment opportunity principles.
    High-grade controls within the agency currently restrict movement
into high grade positions (GS-14/15). OPM definition for broadbanding
purposes is a position where the base pay exceeds that of a GS-13, Step
10. Until the high-grade controls are lifted, demonstration employees
will not be able to advance into the currently defined pay level of a
high-grade, unless a high-grade authorization is available. To
accommodate this, employees whose salary adjustment would place them
above the high-grade pay limit in activities where high-grade
authorizations are unavailable will receive permanent adjustments to
basic salary up to an amount equivalent to one dollar less than the
base of the defined high-grade pay structure. Any additional amount
granted under pay-for-performance will be paid as a one-time bonus
payment from pay-pool funds. This pattern of payout will continue until
high-grade authorizations become available.
    The proposed pay bands for the occupational families and how they
relate to the current GS grades are shown in Figure 1. Application of
the Fair Labor Standards Act (FLSA) within each pay band is also shown
in Figure 1. This pay band concept has the following advantages:
    1. It reduces the number of classification decisions required
during an employee's career.
    2. It simplifies the classification decision-making process and
paperwork. A pay band covers a larger scope of work than a grade, and
thus will be defined in shorter and simpler language.
    3. It supports delegation of classification authority to line
managers.
    4. It provides a broader range of performance-related pay for each
level. In many cases, employees whose pay would have been frozen at the
top step of a grade will now have more potential for upward movement in
the broader pay band.
    5. It prevents the progression of low performers through a pay band
by mere longevity, since job performance serves as the basis for
determining pay.

BILLING CODE 6325-01-P

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[GRAPHIC] [TIFF OMITTED] TN12MR97.069

BILLING CODE 6325-01-C
Fair Labor Standards Act
    The FLSA exemption and nonexemption determinations will be made
consistent with criteria found in 5 CFR part 551. Supervisors with
classification authority will make the determinations on a case-by-case
basis with reference to documentation in the operating procedures
manual and the advice and assistance of the Civilian Personnel Offices
(CPO)/Civilian Personnel Advisory Centers (CPAC)/Civilian Personnel
Operations Centers (CPOC). The generic position descriptions will not
be the sole basis for the determination. The basis for exemption/non-
exemption will be documented and attached to each description.
Exemption criteria will be narrowly construed and applied only to those
employees who clearly meet the spirit of the exemption. The basis for
determinations will be reviewed as a part of the performance review
process and when salary adjustments are warranted. Changes will be
documented and provided to the CPO/CPAC/CPOC, as appropriate.
Simplified Assignment Process
    Today's environment of rightsizing and workforce transition
mandates that the MRMC have maximum flexibility to assign duties and
responsibilities to individuals. Broadbanding can be used to address
this need. As a result of the assignment to a particular level
descriptor, the organization will have maximum flexibility to assign an
employee with no change in pay, within broad descriptions consistent
with the needs of the organization, and the individual's qualifications
and rank or level. Subsequent assignments to projects, tasks, or
functions anywhere within the organization requiring the same level and
area of expertise, and qualifications would not constitute an
assignment outside the scope or coverage of the current level
descriptor, or benchmark position description.
    Such assignments within the coverage of the generic descriptors are
accomplished without the need to process a personnel action. For
instance, a technical expert can be assigned to any project, task, or
function requiring similar technical expertise. Likewise, a manager
could be assigned to manage any similar function or organization
consistent with that individual's qualifications. This flexibility
allows a broader latitude in assignments and further streamlines the
administrative process and system.
Promotions
    A promotion is the movement of an employee to a higher pay band
within the same occupational family or to a pay band in a different
occupational family which results in an increase in the employee's
salary. Progression within a pay band is based upon performance pay
increases; as such, these actions are not considered promotions and are
not subject to the provisions of this section.
    Promotions will be processed under competitive procedures in
accordance with merit principles and requirements. The following
actions are excepted from competitive procedures:
    (a) Re-promotion to a position which is in the same pay band and
occupational family as the employee previously held on a permanent
basis within the competitive service.
    (b) Promotion, reassignment, demotion, transfer or reinstatement to
a position having promotion potential no greater than the potential of
a position an employee currently holds or previously held on a
permanent basis in the competitive service.
    (c) A position change permitted by reduction-in-force procedures.
    (d) Promotion without current competition when the employee was
appointed through competitive procedures to a position with a
documented career ladder.
    (e) A temporary promotion, or detail to a position in a higher pay
band, of 180 days or less.
    (f) Impact of person on the job, accretion of duties, and Factor IV
process (application of the Research Grade Evaluation Guide, Equipment
Development Grade Evaluation Guide or similar guides) promotions.
    (g) A promotion resulting from the correction of an initial
classification error or the issuance of a new classification standard.

[[Page 11681]]

Link Between Promotion and Performance
    To be promoted competitively or noncompetitively from one band to
the next, an employee must meet the minimum qualifications for the job
and have a current performance rating of ``B'' or better (see
Performance Evaluation) or equivalent under a different performance
management system.

B. Classification

Introduction
    The objectives of the new classification system are to simplify the
classification process, make the process more serviceable and
understandable, and place more decision-making authority and
accountability with line managers. All positions listed in Appendix A
will be in the classification structure. Provisions will be made for
including other occupations as employment requirements change in
response to changing missions and technical programs.
Occupational Series
    The present GS classification system has over 400 occupations (also
called series), which are divided into 22 groups. The occupational
series will be maintained. New series, established by OPM, may be added
as needed to reflect new occupations in the workforce. Appendix A lists
the occupational series currently represented at the MRMC by
occupational family.
Classification Standards
    MRMC will use a classification system that is a modification of the
system now in use at the US Navy, Naval Command, Control and Ocean
Surveillance Center, San Diego, California. The present classification
standards will be used to create local benchmark position descriptions
for each pay band, reflecting duties and responsibilities comparable to
those described in present classification standards for the span of
grades represented by each pay band. There will be at least one
benchmark position description for each pay band. A supervisory
benchmark position description will be added to those pay bands that
include supervisory employees. Present titles and series will continue
to be used in order to recognize the types of work being performed and
educational backgrounds and requirements of incumbents. Locally
developed speciality codes and OPM functional codes will be used to
facilitate titling, making qualification determinations, and assigning
competitive levels to determine retention status.
Position Descriptions and Classification Process
    The MRMC Commander will have delegated classification authority and
will redelegate this authority to subordinate activity Commanders/
Directors for redelegation to activity managers as appropriate. New
position descriptions will be developed to assist managers in
exercising delegated position classification authority. Managers will
identify the occupational family, job series, the functional code, the
speciality code, pay band level, and the appropriate acquisition codes.
The manager will document these decisions on a cover sheet similar to
the present DA Form 374. Speciality codes will be developed by Subject
Matter Experts (SMEs) to identify the special nature of work performed.
Functional codes are those currently found in the OPM Introduction to
the Classification Standards which defines certain kinds of activities,
e.g., Research, Development, Test and Evaluation, etc., and covers
Engineers & Scientists (E&S).
Classification Appeals
    An employee may appeal the occupational family, occupational
series, or pay band of his or her position at any time. The employee
may accomplish this by exercising any of the following options: (a) The
employee must formally raise the areas of concern to supervisors in the
immediate chain of command, either verbally or in writing, (b) If the
employee is not satisfied with the supervisory response, the employee
may appeal to the appellate level within DoD or may appeal directly to
OPM, (c) If the employee elects to first appeal to DoD but is not
satisfied with this response, he/she may appeal to the Office of
Personnel Management. Appellate decisions from OPM are final.
    The evaluation of a classification appeal is based on the MRMC
Personnel Demonstration Project Classification Standards.

C. Pay-for-Performance Management System

Performance Evaluation
Introduction
    The performance appraisal system will link compensation to
performance through annual performance evaluations and performance
ratings. The performance appraisal system will allow optional use of
peer evaluation input and/or input from subordinates whenever
appropriate. The system will have the flexibility to be modified, if
necessary, as more experience is gained under the project. Details of
the system may be found in the implementing instructions.
Performance Objectives
    Performance objectives are statements of job responsibilities based
on the work unit's mission, goals, and supplemental benchmark position
descriptions. Employees and supervisors will jointly develop
performance objectives which will reflect the types of duties and
responsibilities expected at the respective pay level. The performance
objectives, representing joint efforts of employees and their rating
chains, should be in place within 30 days from the beginning of each
rating period.
Performance Elements
    New performance elements and rating forms will be designed to
implement a new scoring and rating system. The new performance
evaluation system will be based on critical performance elements
defined in Appendix C. All elements in the new performance evaluation
system are critical. Non-critical elements will not be used. Each
performance element is assigned a weight between a specified range. The
total weight of all elements in a performance plan is 100 points. The
supervisor assigns each element some portion of the 100 points in
accordance with its importance for mission attainment. These weights
will be developed along with employee performance objectives.
Mid-Year Review
    A mid-year review between a supervisor and employee will be held to
determine whether objectives are being met and whether performance
objectives should be modified to reflect changes in planning, workload,
and resource allocation. Additional reviews may be held as deemed
necessary by the supervisor. The weights assigned to performance
elements will be changed, if necessary.
Performance Appraisal
    A performance appraisal is scheduled for the final weeks of the
annual performance cycle, although an individual performance appraisal
may be conducted at any time after 60 days on approved standards. The
performance appraisal process brings supervisors and employees together
for formal discussions on performance and results in (1) written
appraisals, (2) performance ratings, (3) performance pay increases and/
or bonuses, (4) cash awards, and (5) other individual performance-
related actions, as appropriate. A performance appraisal

[[Page 11682]]

may consist of two meetings held between employee and supervisor: the
performance review meeting and the evaluation feedback meeting.
Performance Review Meeting Between Employee and Supervisor
    The review meeting is to discuss job performance and
accomplishments. Supervisors do not assign scores, ratings, pay
increases, or awards at this meeting. The supervisor notifies the
employee of the review meeting in time to allow the employee to prepare
a list of accomplishments. Employees will be given an opportunity at
the meeting to give a personal performance assessment and describe
accomplishments. The supervisor and employee discuss job performance
and accomplishments in relation to the performance elements,
objectives, and planned activities established in the performance plan.
Evaluation Feedback Meeting Between Employee and Supervisor
    In this second meeting between employee and supervisor, the
supervisor informs the employee of management's appraisal of the
employee's performance, the employee's performance score and rating,
and any recommended related pay increase, bonus, award, or other
personnel action. During this second meeting, the supervisor and
employee will discuss and document performance objectives for the next
rating period.
Performance Scores
    Selection of the weighted points to assign to an employee's
performance is assisted by use of benchmark performance standards
(appendix D). Each benchmark performance standard describes the level
of performance associated with a particular point on a rating scale.
Supervisors may add supplemental standards to the performance plans of
the employees they supervise to further elaborate the benchmark
performance standards.
    The overall score is the sum of the individual element scores.
Employees will receive an academic-type rating of ``A'', ``B'', ``C'',
or ``F'' depending upon the percentage of goal attainment. These
summary ratings are representative of Pattern E in Summary Level Chart
in 5 CFR 430.208(d)(1). This rating will become the rating of record,
and only those employees rated ``C'' or higher (any element rated less
than 50 percent is unacceptable performance) will be eligible to
receive performance-based pay increases and/or bonuses or retention
years credit for RIF. A rating of ``A'' will be assigned for scores of
85 to 100 points, ``B'' for scores of 70 through 84, ``C'' for scores
of 50 through 69, and ``F'' for scores of 0 through 49

    [Note: An ``F'' constitutes an unacceptable rating]. The
academic-type ratings will be used to determine pay or bonus values
and to award additional RIF retention years as follows:

------------------------------------------------------------------------
                                                         RIF retention
             Rating                  Compensation         years added
------------------------------------------------------------------------
``A''..........................  4 shares...........  10.
``B''..........................  2 shares...........  7.
``C''..........................  1 share............  3 (SEE NOTE).
``F''..........................  0..................  0.
------------------------------------------------------------------------

    Note: Only those employees rated ``C'' or higher (with no
element rated less than 50 percent) will be eligible to receive
performance-based pay increases and/or bonuses or retention years
credit for RIF retention.
Performance Based Actions
    MRMC will implement a two step process to deal with poor
performers. This process may lead to involuntary separations with
grievance or appeal rights if the overall level of performance is below
that of a ``C'' rating or the employee receives less than 50 percent of
the assigned benchmark score in any element.
    The process will begin with the recognition that an employee's
performance is unacceptable (any element rated less than 50 percent of
the assigned benchmark score), or that an employee receives an annual
rating of ``F''. The two steps are as follows: (1) performance
improvement plan (PIP), and (2) separation.
    When the employee is determined to be performing below the ``C''
level, or below 50% of the assigned benchmark score in any element, the
supervisor and employee will develop a structured PIP that will be
monitored for a reasonable period of time.
    If the employee fails to improve after this structured plan, the
employee will be given notice of proposed appropriate action. The
activity may consider a change in assignment or reduction in pay as
opposed to removal if the mission, organizational structure and
available resources warrant such action. The separated employee will
have subsequent due process recourse as a former employee. (Note:
Performance based adverse actions may be taken under 5 U.S.C., Chapter
75, rather than Chapter 43).
    If, as a result of the PIP, an employee's performance improves to
the ``C'' or above level, or the 50% or above level in all assigned
benchmark level elements, prior to the end of the annual performance
cycle, the employee is appraised again at the end of the annual
performance cycle. If the employee attains an annual rating of ``C'' or
higher, an increase to base pay and/or bonus and RIF retention years
credit will be earned.
    If, as a result of the PIP, an employee's performance improves to
the ``C'' or above level, or the 50% or above level in all assigned
benchmark level elements, after the end of the annual performance
cycle, employment continues but no increase to base pay and/or bonus or
RIF retention years credit are granted.
Employee Relations
    Employees covered by the project will be evaluated under a
performance evaluation system that affords grievance rights comparable
to those provided currently. The MRMC will maintain the substantive and
procedural appeal rights currently afforded when taking action for
misconduct and poor performance.
Senior Executive Service and 5 U.S.C. 3104 (ST) Employees
    Members of the SES will remain under the current SES performance
appraisal system. 5 U.S.C. 3104 (ST) employees will be included in the
project performance evaluation system, but will not be in the project
pay-for-performance system.
Awards
    The MRMC currently has an extensive awards program consisting of
both internal and external awards. While not linked to the pay-for-
performance system, awards will continue to be given for special acts
and other categories as they occur. Awards may include, but are not
limited to, special acts, patents, suggestions, on-the-spot, and time-
off, and may be modified or expanded as appropriate. Major Army Command
(MACOM) and DOD awards and other honorary noncash awards will be
retained.
    In an effort to foster and encourage team work among its employees,
a Commander/Director may allocate a sum of money to a team for
outstanding completion of a special task or significant achievement,
and the team may decide the individual distribution of the total
dollars among themselves.
    Members of the SES will remain under their current awards system
and will not participate in the project performance recognition bonus
awards program. 5 U.S.C. 3104 (ST) employees will be eligible for cash
awards.

[[Page 11683]]

Pay Administration

Introduction
    The objective is to establish a pay system that will improve the
ability of the MRMC to attract and retain quality employees. The new
system will be a pay-for-performance system and, when implemented, will
result in a redistribution of pay resources based upon individual
performance.
Pay-for-Performance
    MRMC will use a simplified performance appraisal system that will
permit both the supervisor and the employee to focus on quality of the
work. The proposed system will permit the manager/supervisor to base
compensation on performance or value added to the goal of the
organization rather than on longevity and risk aversion. This system
will allow managers to withhold pay increases from nonperformers,
thereby giving the nonperformer the incentive to improve performance or
leave government service.
    Pay-for-performance has two components: performance pay increases
(i.e. base pay increases) and/or bonuses. All covered employees will be
given the full amount of locality pay adjustments when they occur,
regardless of performance. The funding for performance pay increases
and/or bonuses is composed of money previously available for the annual
general increase, within-grade increases, quality step increases, and
promotions from one grade to another when the grades are now in the
same pay band. Additionally, funds will be obtained from salary
increases withheld for poor performance (see Performance Evaluation).
Performance Pay Pool
    The funding in the performance pay pool will be used for base pay
increases and performance bonus pay. The payouts made to employees from
the performance pay pool may be a mix of base pay increases and bonus
payments, subject to the pay ceiling in the pay bands.
    The Headquarters, MRMC Comptroller, in conjunction with each
subordinate activity Commander/Director, will calculate the total
performance pay pool and allocate pay pools to subordinate activities.
Each subordinate activity Commander/Director will allocate pay pools to
organizational units or teams as appropriate.
Performance Pay Increases and/or Performance Bonuses
    A pay pool manager is accountable for staying within pay pool
limits. The pay pool manager assigns pay increases and/or bonuses to
individuals on the basis of an academic-type rating, the value of the
performance pay pool resources available, and the individual's current
basic rate of pay within a given pay band. A pay pool manager may
request approval from the Commander/Director or his/her designee to
grant a performance pay increase/performance bonus to an employee that
is higher than the compensation formula for that employee to recognize
extraordinary achievement or to provide accelerated compensation for
local interns.
    A share value will be initially calculated for each individual
based upon a pay pool assignment that will be composed of monies
outlined previously. For illustration purposes, approximately 3 percent
of the value of the combined basic rates of pay of the assigned
employees will be used. A share will be calculated so that a pay pool
manager will not exceed the resources that are available in the pay
pool. The share value for an individual will be determined by a
relationship that considers the individual's current basic rate of pay
with respect to the maximum pay rate in the respective pay band. This
relationship is as follows:
[GRAPHIC] [TIFF OMITTED] TN12MR97.068

where:
Pool Value = 0.03 * SUM (SALk); K = 1 to n
n= number of employees in pay pool
N = Number of Shares (0-4) earned by an employee based on their
performance rating
SAL = An individual's basic rate of pay
SUM = The summation of the entities in parenthesis over the range
indicated

    To illustrate the formula, the basic rates of pay of the 10
employees in a pay pool, who each earn $50,000 per year, total to
$500,000. The employees earned a total of 30 shares based on their
ratings (5 individuals earned an ``A'' rating, and 5 individuals earned
a ``B'' rating). The pay pool value is then 3 percent of the sum of
$500,000, or $15,000. The individual performance pay increase being
determined is for an individual who earns $50,000 per year and receives
a ``B'' on the appraisal, thus earning 2 shares. Using the formula, the
individual performance pay increase is calculated by multiplying the
pay pool value, $15,000, by the individual basic rate of pay, $50,000,
by the number of shares earned, 2. This product is divided by the sum
of the products of the individual basic rates of pay times the number
of shares earned, or 1,750,000. The resulting individual performance
pay increase is $1,000.00 for the year.
    An annual performance pay increase could range between all of the
performance pay increase formula or none of it, depending on the
current pay of the employee. For example, a mid-point principle will be
used to determine performance pay increases. This principle requires
that employees in all pay bands must receive a B rating or higher to
advance their basic rate of pay beyond the mid-point dollar threshold
of their respective pay bands. If the performance pay increase formula
yields a dollar value for a C-rated employee that would increase their
basic rate of pay beyond the mid-point dollar threshold, then their
basic rate of pay will be adjusted to the mid-point dollar threshold
and the balance converted to a performance bonus. Once an employee has
progressed beyond the mid-point dollar threshold, future performance
pay increases will require a ``B'' rating or greater. If an employee
attains a ``C'' rating and is beyond the mid-point dollar threshold,
performance pay increases will be restricted to performance bonuses
only.
    An annual performance pay increase could be all the compensation
formula or none of it, depending on the current basic rate of pay of
the employee. Annual performance pay increases will be limited to the
difference between the particular band pay cap and the employee's
current basic rate of pay, or total dollar value of shares, whichever
is less, with the balance converted to a performance bonus. This means
that employees whose basic rates of pay have reached the upper limits
of a particular pay band will receive most performance compensation as
a performance bonus. Cash bonuses will not become a part of the
employee's basic rate of pay. Employees receiving

[[Page 11684]]

retained rates are subject to special rules governing basic pay
adjustments. They may receive pay increases ranging from 0 to 50
percent of the amount of the increase in the maximum rate of basic pay
payable for the pay band of the employee's position.
Supervisory Bonus
    Supervisory bonuses of up to 10% of the basic rate of pay may be
paid at the discretion of Commanders/Directors to supervisors with
employees in the same pay band. In exceptional cases (approved by HQ,
MRMC), supervisors who do not have employees in the same pay band may
be compensated up to 5% of basic rate of pay. Supervisory bonuses are
not part of the basic rate of pay. The bonus will not apply to 5 U.S.C.
3104 (ST) positions. Employees who qualify for the bonus include
supervisors in all occupational families with formal supervisory
authority meeting that required for coverage under the OPM GS
Supervisory Guide. The bonus may be paid at the beginning of a
performance period.
    Because the bonus is paid at the beginning of the appraisal period,
if the individual leaves a supervisory position or is removed from
supervisory responsibilities (unless effected through RIF action), the
prorated portion of the bonus for the non-supervisory portion of the
performance year will be recovered as a debt due the Government. Before
any supervisory bonus is paid, the supervisor will sign an agreement to
make any required repayment.
Pay and Compensation Ceilings
    An employee's total monetary compensation paid in a calendar year
may not exceed the basic pay of level I of the Executive Schedule,
consistent with 5 USC 5307, and 5 CFR part 530, Subpart B, except for
employees in Pay Band V of the Engineers and Scientists Occupational
Family. In this case, the maximum rate of basic pay will be that which
is established for level IV of the Executive Schedule.
    In addition, each pay band will have its own pay ceiling, just as
grades do in the current system. The maximum basic pay rates for the
various pay bands will be directly keyed to the maximum rate of basic
pay for the highest grade (as in the current system) in the band or
level IV of the Executive Schedule for Pay Band V of the Engineers and
Scientists Occupational Family. Except for retained rates, basic pay
will be limited to the maximum rates payable for each pay band.
Pay Setting for Promotion
    The minimum basic pay increase upon promotion to a higher pay band
will be 6 percent. The maximum amount of pay increase upon promotion
will not exceed $10,000.
    When a temporary promotion is terminated, the employee's pay
entitlements will be redetermined based on the employee's position of
record, with appropriate adjustments to reflect pay events during the
temporary promotion, subject to the specific policies and rules
established by MRMC. In no case may those adjustments increase the pay
for the position of record beyond the applicable pay range maximum
rate.
Placement in a Lower Pay Band
    Employees with ratings of ``F'' or those who receive 50 percent or
less of an assigned benchmark score in any element will receive no pay
increase and/or bonus. This action may result in a base salary that is
identified in a lower pay band. This occurs because the minimum rates
of basic pay in a pay band increase as the result of the general
increase (5 U.S.C. 5303). This situation, (a reduction in band level
with no reduction in pay) will not be considered an adverse action, nor
will band retention provisions apply.

D. Hiring and Appointment Authorities

Hiring Authority
    A candidate's basic eligibility will be determined using Office of
Personnel Management's (OPM) Qualification Standards Handbook of
General Schedule Positions. Candidates must meet the minimum standards
for entry into the payband. For example if the payband includes
positions in grades GS-5 and GS-7, the candidates must meet the
qualifications for positions at GS-5 level. Specific experience/
education required will be determined based on whether a position to be
filled is at the lower or higher end of the band. Under the
demonstration authority, the MRMC is authorized to modify by increasing
QSH qualifications and/or experience or substitutable education
requirements. Substitutable education can be modified; however, no
changes can be made to standards with positive education requirements
or minimum education requirements. In some cases, MRMC will update
these standards to reflect current practices in the occupational
families and modern curricula in recognized degree programs. Selective
placement factors may be established when judged to be critical to
successful job performance. These factors must be communicated to all
candidates for specific vacancies and must be met for basic
eligibility.
    In the proposed system, as with the current system, the individual
manager will decide whether to fill a position from among internal
candidates or to recruit from outside.
    The MRMC is committed to positive affirmative action and equal
employment opportunity goals. Line managers will be accountable for
understanding and implementing policies designed to meet these goals.
Appointment Authority
    Under the demonstration project, there will continue to be career
and career conditional appointments and temporary appointments not to
exceed one year. These appointments will use existing authorities and
entitlements. Non-permanent positions (exceeding one year) needed to
meet fluctuating or uncertain workload requirements will be filled
using a Contingent Employee appointment authority.
    Employees hired for more than one year, under the contingent
employee appointment authority are given term appointments in the
competitive service for no longer than five years. The MRMC Commander
is authorized to extend a contingent appointment one additional year.
These employees are entitled to the same rights and benefits as term
employees and will serve a one year trial period. The Pay-for
Performance Management System outlined in this Plan applies to
contingent employees.
    Appointment will be made under the same appointment authorities and
processes as regular term appointments, but recruitment bulletins must
indicate that there is a potential for conversion to permanent
employment.
    Employees hired under the contingent employee authority may be
eligible for conversion to career-conditional appointments. To be
converted, the employee must (1) have been selected for the term
position under competitive procedures, with the announcement
specifically stating that the individual(s) selected for the term
position(s) may be eligible for conversion to career-conditional
appointment at a later date; (2) served two years of substantially
continuous service in the term position; (3) be selected under merit
promotion procedures for the permanent position; and (4) have a current
rating of ``B'' or better.
    Employees serving under regular term appointments at the time of
conversion to the Demonstration Project will be converted to the new
contingent employee appointments provided they were hired for their
current positions

[[Page 11685]]

under competitive procedures. These employees will be eligible for
conversion to career-conditional appointment if they have a current
rating of ``B'' or better (or the equivalent of ``B'' in their current
evaluation system), and are selected under merit promotion procedures
for their permanent position after having completed two years of
continuous service. Time served in temporary or term positions prior to
conversion to the contingent employee appointment is creditable,
provided the service was continuous.
Extended Probationary Period
    The current one-year probationary period will be extended to ``up
to three years'' for all newly hired employees in all pay bands. The
purpose of extending the probationary period is to allow supervisors an
adequate period of time to fully evaluate an employee's ability to
complete a research cycle and/or to fully evaluate an employee's
contribution and conduct. The length of the probationary period for the
Engineer and Scientist Occupational Family will be three years. The
probationary period for all other occupational families will be two
years.
    Aside from extending the time period, all other features of the
current probationary period are retained including the potential to
remove an employee without providing the full substantive and
procedural rights afforded a non-probationary employee. Any employee
subject to serving a probationary period that was appointed prior to
the implementation date will not be affected. The ``up to three year''
probation will apply to new hires or those who do not have reemployment
rights or reinstatement privileges.
    Probationary employees will be terminated when the employee fails
to demonstrate proper conduct, technical competency, and/or adequate
contribution for continued employment. When the MRMC decides to
terminate an employee serving a probationary period because his/her
work performance or conduct during this period fails to demonstrate
his/her fitness or qualifications for continued employment, it shall
terminate his/her services by written notification of the reasons for
separation and the effective date of the action. The information in the
notice as to why the employee is being terminated shall, as a minimum,
consist of the manager's conclusions as to the inadequacies of his/her
performance or conduct.
Supervisory Probationary Periods
    Supervisory probationary periods will be made consistent with 5 CFR
part 315, Subchapter 315.901. Employees that have successfully
completed the initial probationary period will be required to complete
an additional one-year probationary period for the initial appointment
to a supervisory position. If, during the probationary period, the
decision is made to return the employee to a non-supervisory position
for reasons solely related to supervisory performance, the employee
will be returned to a comparable position of no lower pay band and pay
than the position from which he/she was promoted.
Voluntary Emeritus Program
    Under the demonstration project, Commanders/Directors will have the
authority to offer retired or separated individuals voluntary
assignments in their activities. 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 the purposes of
injury compensation). Thus, such assignments do not affect an
employee's entitlement to buy-outs 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 individuals to accept retirement incentive with
the opportunity to retain a presence within their community. The
program will be of most benefit during manpower reductions as
individuals could accept retirement and return to provide valuable on-
the-job training or mentoring to less experienced individuals.
    To be accepted into the emeritus program, a volunteer must be
approved by the subordinate activity Commander/Director. Everyone who
applies is not entitled to a voluntary assignment. The laboratory
Commander/Director 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 individual's
Federal retirement pay (whether military or civilian) will not be
affected while serving in a voluntary capacity. Retired or separated
Federal individuals 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 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
subordinate activity Commander/Director, and the servicing CPO/CPAC/
CPOC. The agreement will be reviewed by the Headquarters, MRMC legal
office for ethics determinations under the Joint Ethics Regulations.
The agreement must be finalized before the assumption of duties and
shall include:
    (a) A statement that the voluntary assignment does not constitute
an appointment in the civil service and is without compensation, and
any and all claims against the Government because of the voluntary
assignment are waived by the volunteer,
    (b) A statement that the volunteer will be considered a Federal
employee for the purpose of injury compensation,
    (c) Volunteer's work schedule,
    (d) Length of agreement (defined by length of project or time
defined by weeks, months, or years),
    (e) Support provided by the subordinate activity (travel,
administrative, office space, supplies),
    (f) A one-page or less Statement of Duties and Experience,
    (g) 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,
    (h) A provision allowing either party to void the agreement with 10
working days written notice, and
    (i) The level of security access required (any security clearance
required by the position will be managed by the subordinate activity
while the volunteer is a member of the Voluntary Emeritus Program).

E. Expanded Developmental Opportunities Program

    The MRMC Expanded Developmental Opportunities Program will cover
all permanent demonstration project employees. An expanded
developmental opportunity complements existing developmental
opportunities such as (1) long-term training, (2) one-year work
experiences in an industrial setting via the Relations With Industry
Program, (3) one-year work experiences in laboratories of allied
nations via the Science and Engineer Exchange Program, (4) rotational
job assignments within the MRMC, (5) developmental assignments

[[Page 11686]]

in higher headquarters within the Army and DOD, (6) self-directed study
via correspondence courses and local colleges and universities, (7)
details within MRMC and to other Federal Agencies, and (8)
Intergovernmental Personnel Act Agreements.
    A developmental opportunity period will not result in loss of (or
reduction in) pay or leave to which the employee is otherwise entitled,
or credit for time or service. Input for performance rating purposes
will be obtained from the gaining organization to ensure a rating of
record is on file and, if warranted, a performance award and/or bonus
and retention years credit for RIF purposes is documented. Each
developmental opportunity period should benefit the MRMC, as well as
increase the employee's individual effectiveness. Various learning or
uncompensated developmental work experiences may be considered, such as
advanced academic teaching or research, sabbaticals, or on-the-job work
experience with public or non-profit organizations. Final approval
authority will rest with the activity Commander/Director.
    The opportunity to participate in the Expanded Developmental
Opportunities Program will be announced as opportunities arise.
Instructions for application and the selection criteria will be
included in the announcement. Final selection for participation in the
program will be made by activity Commanders/Directors. The position of
employees on an expanded developmental opportunity may be backfilled by
temporary promotion, or temporary/contingent employees. However, that
position or its equivalent must be made available to the employee
returning from the expanded developmental opportunity.
    In the event the employee fails to carry out the intent/conditions
of the developmental opportunity (except for good and sufficient reason
as determined by the activity Commander/Director), the employee shall
be liable to the United States for payment of all expenses. The amount
shall be treated as a debt due the United States. Employees accepting
an Expanded Developmental Opportunity do not have to sign a continuing
service agreement as sited in 5 USC 4108(a)(1).

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

Introduction
    When an employee in the MRMC Demonstration Project is faced with
separation or downgrading due to lack of work, shortage of funds,
reorganization, insufficient personnel ceiling, the exercise of
reemployment or restoration rights, or furlough for more than 30
calendar days or more than 22 discontinuous days, RIF procedures will
be used.
    The procedures in 5 CFR part 351 and OPM RIF regulations will be
followed with the modifications specified below pertaining to
competitive areas, assignment rights, credit for performance ratings
and service computation date.
Competitive Areas
    The Headquarters and each subordinate activity of the MRMC will be
in a separate competitive area for RIF purposes. Further, within each
subordinate activity, detachments located at different geographic sites
will be in a separate competitive area for RIF purposes. Each of the
four occupational families will be a separate competitive area within
each activity. DA Interns will continue to be part of the ACTEDS
competitive area.
Retention
    Within each competitive area, competitive levels will be
established consisting of all positions in the same occupational family
and pay band which are similar enough in duties, qualifications, and
working conditions that the incumbent of one position can perform
successfully the duties of any other position in the competitive level
without unduly interrupting the work program.
    Current RIF regulations will be modified to restrict bumping and
retreating to positions within the employee's current occupational
family. This feature will minimize the disruption associated with the
RIF process. An employee may displace another employee within the same
occupational family by bump or retreat to one band below the employee's
existing band. A preference eligible veteran with a compensable
service-connected disability of 30% or more may retreat to positions
two bands (or the equivalent of five (5) grades) below his/her current
band.
    Reductions-in-force are accomplished using the retention factors of
tenure, veterans preference, credit for performance ratings, and length
of service, in that order.
    Contingent employees are in Tenure Group III for reduction-in-force
purposes. Reduction-in-force procedures are not required when
separating these employees when their appointments expire.
Link Between Performance and Retention
    Credit for performance based on the last three (3) ratings of
record during the preceding four (4) years will be applied as follows:
a rating of ``A'' equals 10 years; a rating of ``B'' equals 7 years; a
rating of ``C'' equals 3 years, and a rating of ``F'' adds no credit
for retention. Credit for performance is cumulative, not averaged.
Ratings given under non-demonstration systems will be converted to the
demonstration rating scheme and provided the equivalent performance
rating credit.
    In some cases, an employee may not have three (3) annual
performance ratings of record. In these situations, performance credit
will be given on the basis of assumed ratings of ``C''.
    An employee who has received a written decision to demote him/her
to a lower pay band because of unacceptable performance, competes in
RIF from the position to which he/she will be/has been demoted.
Employees who have been demoted for unacceptable performance, and as of
the date of the issuance of the RIF notice have not received a
performance rating in the position to which demoted, will receive a
presumed rating of ``C'' for purposes of RIF credit.
    An employee with a current annual performance rating of ``F'' has
assignment rights only to a position held by another employee who has
an ``F'' rating. An employee who has been given a written decision of
removal because of unacceptable performance will be placed at the
bottom of the retention register for their competitive level.
Notice Period
    The RIF notice period will follow OPM guidelines.
Grade and Pay Retention
    Except where waived or modified in the waiver section of this plan,
grade and pay retention will follow current law and regulations (e.g.
occupational family pay bands will substitute for grade.)
Use of Voluntary Incentives
    Subordinate activity Commanders/Directors currently have delegated
authority to grant payments under the VSIP. This authority will
continue under this project.

IV. Training

Introduction

    The key to the success or failure of the proposed demonstration
project will be the training provided for all involved.

[[Page 11687]]

This training will not only provide the necessary knowledge and skills
to carry out the proposed changes, but will also lead to commitment to
the program on the part of participants.
    Training at the beginning of implementation and throughout the
demonstration will be provided to supervisors, employees, and the
administrative staff responsible for assisting managers in effecting
the changeover and operation of the new system.
    The elements to be covered in the orientation portion of this
training will include:
    (1) A description of the personnel system, (2) how employees are
converted into and out of the system, (3) the pay adjustment and/or
bonus process, (4) familiarization with the new position descriptions
and performance objectives, (5) the performance evaluation management
system, (6) the reconsideration process, and (7) the demonstration
project administrative and formal evaluation process.
Supervisors
    The focus of this project on management-centered personnel
administration, with increased supervisory and managerial personnel
management authority and accountability, demands thorough training of
supervisors and mangers in the knowledge and skills that will prepare
them for their new responsibilities. Training will include detailed
information on the policies and procedures of the demonstration
project, training in using the classification system, position
description preparation, and performance evaluation. Additional
training may focus on non-project procedural techniques such as
interpersonal and communication skills.
Administrative Staff
    The administrative staff, including personnel specialists,
subordinate activity administrative officers, and personnel points of
contact will play a key role in advising, training, and coaching
supervisors and employees in implementing the demonstration project.
This staff will need training in the procedural and technical aspects
of the project.
Employees
    The MRMC Demonstration Project Office will make and coordinate all
arrangements necessary to train employees covered under the
demonstration project. In the months leading up to the implementation
date, meetings will be held for employees to fully inform them of all
project decisions, procedures, and processes.

V. Conversion

Conversion to the Demonstration Project

    Initial entry into the demonstration project for covered employees
will be accomplished through a full employee protection approach that
ensures each employee an initial place in the appropriate occupational
family and pay band without loss of pay. Covered employees will be
initially converted to appropriate pay bands with respect to type of
work performed in accordance with the steps below. If conversion into
the demonstration project is accompanied by a geographic move, the
employee's GS pay entitlement in the new area must be determined before
performing the pay conversion.
    a. All employees will be converted at their current base pay at the
time of conversion. [Not applicable to special rate employees.]
    b. Employees who are on temporary promotions at the time of
conversion will be converted to a pay band commensurate with the grade
of the position to which temporarily promoted. At the conclusion of the
temporary promotion, the employee will revert to the pay band and
salary which corresponds to the prior grade of record, plus any
adjustments to base pay realized as a result of performance while on
the temporary promotion. The only exception will be if the original
competitive promotion announcement stipulated that the promotion could
be made permanent.
    c. All employees in a pay grade corresponding to a pay band will be
converted to that pay band.
    d. Employees who are covered by special salary rates, prior to the
demonstration project, will no longer be considered special rate
employees under the demonstration project. These employees will,
therefore, be eligible for full locality pay. The total salaries of
these employees will not change upon conversion. Rather, the employees
will receive a new base pay rate computed by dividing their adjusted
basic pay by the locality pay factor (e.g., 1.0711 in the Washington-
Baltimore locality pay area) for their area. Employees whose base pay
upon conversion does not fit in the applicable pay range and would
otherwise be subject to a reduction in pay, will be entitled to retain
their converted base rate. A full locality adjustment will then be
added to the new base pay rate. Since no employee's total pay will be
reduced through the conversion process, adverse action and pay
retention provisions (except as noted above) will not be applicable.
    e. Upon conversion to the project, time served toward Within-Grade
Increases (WIGs) will be documented and paid to the employee on a
prorated basis (number of weeks completed in the waiting period divided
by the number of weeks in the waiting period, adjusted using credit for
service rules). This payment will be paid to those individuals employed
at the one-year anniversary of the demonstration project. Payment will
be lump-sum in nature and not a part of basic pay, providing the
employee is performing at a ``C'' level or above.
Conversion or Movement from a Project Position to a General Schedule
Position
    If a demonstration project employee is moving to a General Schedule
(GS) position not under the demonstration project, or if the project
ends and each project employee must be converted back to the GS system,
the following procedures will be used to convert the employee's project
pay band to a GS-equivalent grade and the employee's project rates of
pay to GS-equivalent rates of pay. The converted GS grade and GS rates
of pay must be determined before movement or conversion out of the
demonstration project and any accompanying geographic movement,
promotion, or other simultaneous action. For conversions upon
termination of the project and for lateral reassignments, the converted
GS grade and rates will become the employee's actual GS grade and rates
after leaving the demonstration project (before any other action). For
transfers, promotions, and other actions, the converted GS grade and
rates will be used in applying any GS pay administration rules
applicable in connection with the employee's movement out of the
project (e.g., promotion rules, highest previous rate rules, pay
retention rules), as if the GS converted grade and rates were actually
in effect immediately before the employee left the demonstration
project.
Grade-Setting Provisions
    An employee in a pay band corresponding to a single GS grade is
converted to that grade. An employee in a pay band corresponding to two
or more grades is converted to one of those grades according to the
following rules:
    (a) The employee's adjusted rate of basic pay under the
demonstration project (including any locality payment) is compared with
step 4 rates in the highest applicable GS rate range. (For this
purpose, a ``GS rate range'' includes a rate range in (1) the GS base
schedule, (2) the locality rate schedule for the

[[Page 11688]]

locality pay area in which the position is located, or (3) the
appropriate special rate schedule for the employee's occupational
series, as applicable.) If the series is a two-grade interval series,
only odd-numbered grades are considered below GS-11.
    (b) If the employee's adjusted project rate equals or exceeds the
applicable step 4 rate of the highest GS grade in the band, the
employee is converted to that grade.
    (c) If the employee's adjusted project rate is lower than the
applicable step 4 rate of the highest grade, the adjusted rate is
compared with the step 4 rate of the second highest grade in the
employee's pay band. If the employee's adjusted rate equals or exceeds
step 4 of the second highest grade, the employee is converted to that
grade.
    (d) This process is repeated for each successively lower grade in
the band until a grade is found in which the employee's adjusted
project rate equals or exceeds the applicable step 4 rate of the grade.
The employee is then converted at that grade. If the employee's
adjusted rate is below the step 4 rate of the lowest grade in the band,
the employee is converted to the lowest grade.
    (e) Exception: If the employee's adjusted project rate exceeds the
maximum rate of the grade assigned under the above-described ``step 4''
rule, but fits in the rate range for the next higher applicable grade
(i.e., between step 1 and step 4), then the employee shall be converted
to that next higher applicable grade.
    (f) Exception: An employee will not be converted to a lower grade
than the grade held by the employee immediately preceding a conversion,
lateral reassignment, or lateral transfer into the project, unless
since that time, the employee has undergone a reduction in band.
Pay-Setting Provisions
    An employee's pay within the converted GS grade is set by
converting the employee's demonstration project rates of pay to GS
rates of pay in accordance with the following rules:
    (a) The pay conversion is done before any geographic movement or
other pay-related action that coincides with the employee's movement or
conversion out of the demonstration project.
    (b) An employee's adjusted rate of basic pay under the project
(including any locality payment) is converted to a GS adjusted rate on
the highest applicable GS rate range for the converted GS grade. (For
this purpose, a ``GS rate range'' includes a rate range in (1) the GS
base schedule, (2) an applicable locality rate schedule, or (3) an
applicable special rate schedule.)
    (c) If the highest applicable GS rate range is a locality pay rate
range, the employee's adjusted project rate is converted to a GS
locality rate of pay. If this rate falls between two steps in the
locality-adjusted schedule, the rate must be set at the higher step.
The converted GS unadjusted rate of basic pay would be the GS base rate
corresponding to the converted GS locality rate (i.e., same step
position). (If this employee is also covered by a special rate schedule
as a GS employee, the converted special rate will be determined based
on the GS step position. This underlying special rate will be basic pay
for certain purposes for which the employee's higher locality rate is
not basic pay.)
    (d) If the highest applicable GS rate range is a special rate
range, the employee's adjusted project rate is converted to a special
rate. If this rate falls between two steps in the special rate
schedule, the rate must be set at the higher step. The converted GS
unadjusted rate of basic pay will be the GS rate corresponding to the
converted special rate (i.e., same step position).
Within-Grade Increase--Equivalent Increase Determinations
    Service under the demonstration project is creditable for within-
grade increase purposes upon conversion back to the GS pay system.
Performance pay increases (including a zero increase) under the
demonstration project are equivalent increases for the purpose of
determining the commencement of a within-grade increase waiting period
under 5 CFR 531.405(b).
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 principles will be maintained. Supporting personnel
specialists in CPOs/CPACs/CPOCs will continue to process personnel-
related actions and provide consultative and other appropriate
services.
Automation
    The MRMC 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.
    Local automated systems will be developed to support computation of
performance-related pay increases and awards and other personnel
processes and systems associated with this project.
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 system is
working. The MRMC will make minor modifications, such as changes in the
occupational series in a occupational family without further notice.
Major changes, such as a change in the number of occupational families,
will be published in the Federal Register.

VI. Project Duration

    Public Law 103-337 removed any mandatory expiration date for this
demonstration. The project evaluation plan adequately addresses how
each intervention will be comprehensively evaluated for at least the
first 5 years of the demonstration (Proposed Plan for Evaluation of the
DOD Laboratory Demonstration Program, OPM, 1995). Major changes and
modifications to the interventions can be made through announcement in
the Federal Register and would be made if formative evaluation data
warranted. At the 5-year point, the entire demonstration will be
reexamined for either: (a) permanent implementation, (b) a continuing
test period, or (c) expiration.

VII. Evaluation Plan

Introduction
    In response to the Reinvention Project legislation, OPM will
evaluate the project annually and provide briefings and written reports
of the findings. The Evaluation Plan stipulates both internal and
external evaluation efforts. The phases of the plan are outlined below.
Evaluation Phases
    The evaluation effort will be carried out in three phases:
implementation, formative, and summative evaluation. Monitoring of the
project will be concurrent with the implementation phase. An evaluation
of this phase is necessary to determine whether the project is
implemented as designed and to ascertain when the monitored processes
become stable and fully operational. The formative phase evaluation
will extend for the duration of the project. Data will be collected
annually and periodic reports will be issued by OPM. The summative
evaluation phase will assess overall impact of the project during
appropriate time intervals and/or after 5 years of operation.

[[Page 11689]]

Evaluation Methodology
    The evaluation will focus on the continuum of personnel issues and
will be based on before-and-after comparison of the personnel data,
using both quantitative and qualitative criteria. Personnel records and
reports, as well as previously validated survey instruments, will be
used to develop appropriate measures. New data collection methods and
measures, or modifications to existing instruments, may be required for
some criteria. Baseline data will be collected before the demonstration
project implementation. The baseline survey was administered in the
Summer of 1996.
Evaluation Criteria
    While it is not possible to prove a direct causal link between
intermediate and ultimate outcomes (personnel system changes and
improved organizational performance), indirect cause and effect
relationships can be evidenced through the establishment of relevant
effectiveness measures. An intervention impact model (Appendix B) will
be used to measure the effectiveness of the various personnel system
changes or interventions. Additional measures will be developed as new
interventions are introduced or existing interventions modified
consistent with expected effects. Measures may also be deleted when
appropriate. Activity specific measures may also be developed to
accommodate specific needs or interests which are locally unique. The
evaluation model for the Demonstration Project identifies elements
critical to an evaluation of the effectiveness of the interventions.
The overall evaluation approach will also include consideration of
context variables that are likely to have an impact on project
outcomes: e.g., HRM regionalization, rightsizing, cross-service
integration, and the general state of the economy. However, the main
focus of the evaluation will be on intermediate outcomes, i.e., the
results of specific personnel system changes which are expected to
improve human resources management. The ultimate outcomes are defined
as improved organizational effectiveness, mission accomplishment and
customer satisfaction.
    Data from a variety of different sources will be used in the
evaluation. Information from existing management information systems
supplemented with perceptual data will be used to assess variables
related to effectiveness. Multiple methods provide more than one
perspective on how the demonstration project is working. Information
gathered through one method will be used to validate information
gathered through another. Confidence in the findings will increase as
they are substantiated by the different collection methods. The
following types of data will be collected as part of the evaluation:
(1) Workforce data; (2) personnel office data; (3) employee attitudes
and feedback using surveys, structured interviews and focus groups; (4)
local activity histories, and (5) core measures of subordinate activity
performance.

VIII. Demonstration Project Costs

    Costs associated with the development of the personnel
demonstration system include software automation, training, and project
evaluation. All funding will be provided through the MEDCOM/MRMC
budget. The projected annual expenses are as summarized in Table 1.
Project evaluation costs are not expected to continue beyond the first
5 years unless the results warrant further evaluation. Projected
developmental costs do not include potential contractor fees.

                         Table 1.--Projected Developmental Costs (Current Year Dollars)
----------------------------------------------------------------------------------------------------------------
                                Baseline        FY97          FY98          FY99          FY00          FY01
----------------------------------------------------------------------------------------------------------------
Training....................  ............  $99K          $19K          $19K          $19K          $19K
Project Eval................  $17K          $28K          $28K          $28K          $28K          $28K
Automation..................  $80K          $10K          $10K          $10K          $10K          $10K
Totals......................  $97K          $137K         $57K          $57K          $57K          $57K
----------------------------------------------------------------------------------------------------------------

IX. Required Waivers to Law and Regulation

    Public Law 103-337 gave the DoD the authority to experiment with
several personnel management innovations. In addition to the
authorities granted by the law, the following are the 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.

1. Waivers to Title 5, U.S. Code

    Chapter 31, section 3111: Acceptance of volunteer service--To the
extent that the acceptance of retired or separated civilian and
military are included as volunteers under current statute.
    Chapter 31, Section 3324: Appointments to Positions Classified
Above GS-15.
    Chapter 33, Section 3341: Details; within Executive or military
departments--Increasing 120-Day Increments for Details to 180 days.
    Chapter 35, Section 3502: Order of Retention--Applies only to the
extent that performance score is placed before length of service.
    Chapter 41, Section 4107: Pay for Degrees.
    Chapter 41, Section 4108: Employee Agreements, Service after
training; to the extent that employees who accept an expanded
developmental opportunity do not have to sign a continuing service
agreement.
    Chapter 43, Section 4301: Definitions.
    Chapter 43, Section 4302: Establishment of Performance Appraisal
Systems.
    Chapter 43, Section 4303: Actions based on Unacceptable
Performance.
    Chapter 51, Sections 5101-5111: Purpose, definitions, basis,
classification of positions, review, authority--Applies to the extent
that white collar employees will be covered by broadbanding. Pay
category determination criteria for federal wage system positions
remain unchanged.
    Chapter 53, Sections 5301, 5302 (8) and (9), 5303 and 5304: Pay
Comparability System--Sections 5301, 5302, and 5304 are waived only to
the extent necessary to allow (1) demonstration project employees
except employees in Pay Band V of the Engineers and Scientists
Occupational Family, to be treated as General Schedule employees, (2)
basic rates of pay under the demonstration project to be treated as
scheduled rates of pay, and (3) employees in Pay Band V of the
Engineers and Scientists Occupational Family to be treated as SES and
ST employees for the purposes of these provisions.
    Chapter 53, Section 5305: Special Salary rates.
    Chapter 53, Sections 5331-5336: General Schedule Pay Rates.

[[Page 11690]]

    Chapter 53, Sections 5361-5366: Grade and pay retention--This
waiver applies only to the extent necessary to (1) replace ``grade''
with ``pay band'; (2) allow demonstration project employees to be
treated as General Schedule employees; (3) provide that pay band
retention provisions do not apply to movements to a lower pay band as a
result of receiving a performance pay increase that is less than the
amount of general pay increase; (4) provide that pay retention
provisions do not apply to conversions from General Schedule special
rates to demonstration project pay, as long as total pay is not
reduced; (5) provide that an employee on pay retention may receive
between 0 and 50 percent of the amount of the increase in the maximum
rate of basic pay payable for the pay band of the employee's position.
This waiver does not apply to ST employees unless they move to a GS-
equivalent position under the demonstration project under conditions
that trigger entitlement to pay retention.
    Chapter 53, Section 5371: Health Care Positions--This waiver
applies only to the extent necessary to allow demonstration project
employees to hold positions subject to Chapter 51 of title 5.
    Chapter 55, Section 5545 (d): Hazardous Duty Differential--This
waiver applies only to the extent necessary to allow demonstration
project employees to be treated as General Schedule employees. This
waiver does not apply to employees in Pay Band V of the Engineers and
Scientists Occupational Family or ST employees.
    Chapter 57, Sections 5753, 5754, and 5755: Recruitment and
Relocation Bonuses; Retention Allowances and Supervisory Bonuses--This
waiver applies only to the extent necessary to allow (1) employees and
positions under the demonstration project to be treated as employees
and positions under the General Schedule and (2) employees in Pay Band
V of the Engineers and Scientists Occupational Family to be treated as
ST employees. This waiver does not apply to ST employees who continue
to be covered by these provisions as appropriate.
    Chapter 59, Section 5941: Allowances based on living costs and
conditions of environment; employees stationed outside continental U.S.
or Alaska. This waiver applies only to the extent necessary to provide
that COLA's paid to employees under the demonstration project are paid
in accordance with regulations prescribed by the President (as
delegated to OPM).
    Chapter 75, Section 7512(3): Adverse actions--This provision is
waived only to the extent necessary to (1) replace ``grade'' with ``pay
band'' and (2) provide that a reduction in band level is not an adverse
action if it results from the employee's pay being exceeded by the
minimum rate of his or her pay band.
    Chapter 75, Section 7512(4): Adverse actions--This provision is
waived only to the extent that adverse action provisions do not apply
to conversions from General Schedule special rates to demonstration
project pay, as long as total pay is not reduced.
    2. Title 5, Code of Federal Regulations:
    Part 300.601-605: Time-In-Grade Restrictions--Restrictions
eliminated under the demonstration.
    Part 308.101-103: Volunteer Service--To the extent that retired/
separated civilians and military can perform voluntary services.
    Part 315.801 and 315.802: Probation on Initial Appointment to a
Competitive Position--Demonstration project employees in some
occupational families will have extended probationary period.
    Part 316.301: Term Employment--Adding years to exceed 4 and
establishment of Contingent appointments.
    Part 316.303: Tenure of term employees--Demonstration allows for
conversion.
    Part 316.305: Eligibility for within-grade increases--Demonstration
employees no longer received WIGs.
    Part 334, section 334.102: Temporary Assignment of Employees
Outside the Agency.
    Part 335.103: Covering the length of details and temporary
promotions.
    Part 351.402(b): Competitive Area--To the extent that occupational
family is the competitive area.
    Part 351.403: Competitive Level--To the extent that pay band is
substituted for grade.
    Part 351.504: Credit for Performance--Retention standing to the
extent that service credit will not be modified based on performance
rating.
    Part 351.701: Assignment Involving Displacement--To the extent that
bumping and retreating will be limited to no more than one pay band
except for 30 percent compensable veterans who can retreat to the
equivalent of 5 GS grades.
    Part 430: Subpart B, Performance Appraisal for General Schedule,
Prevailing Rate, and Certain Other Employees--Employees under the
demonstration project will not be subject to the requirements of this
subpart.
    Part 432: Performance Based Reduction In Grade and Removal
Actions--Modified to the extent that an employee may be removed,
reduced in band level with a reduction in pay, reduced in pay without a
reduction in band level and reduced in band level without a reduction
in pay based on unacceptable performance. Also modified to delete
reference to critical element (all elements are critical). For
employees who are reduced in band level without a reduction in pay,
sections 432.105 and 432.106(a) do not apply.
    Part 432, sections 104 and 105: Addressing unacceptable performance
and proposing and taking action based on unacceptable performance--In
so far as references to ``critical elements'' are deleted (all elements
are critical), and adding that the employee may be ``reduced in grade,
or pay, or removed'' if performance does not improve to acceptable
levels after a reasonable opportunity. In addition, requirements waived
to the extent that a reduction in band level is taken based on skill
utilization criteria when there is not a reduction in pay.
    Part 511: Classification Under the General Schedule--To the extent
that grades are changed to broadbands, and that white collar positions
are covered by broadbanding.
    Part 530, subpart C: Special Salary Rate Schedules for Recruitment
and Retention.
    Part 531, subparts B, D, and E: Pay Under the General Schedule--
Determining rate of basic pay, within-grade increases, and quality step
increases.
    Part 531, subpart F: Locality Based Comparability Payments--This
waiver applies only to the extent necessary to allow (1) demonstration
project employees, except employees in Pay Band V of the Engineers and
Scientists Occupational Family to be treated as General Schedule
employees, (2) basic rates of pay under the demonstration project to be
treated as scheduled annual rates of pay, and (3) employees in Pay Band
V of the Engineers and Scientists Occupational Family to be treated as
ST employees for the purposes of these provisions. This waiver does not
apply to ST employees who continue to be covered by these provisions,
as appropriate.
    Part 536: Grade and pay retention--This waiver applies only to the
extent necessary to (1) replace ``grade'' with ``pay band''; (2)
provide that pay band retention provisions do not apply to movements to
a lower pay band as result of receiving a performance pay increase that
is less than the amount of the general pay increase; (3) provide that
pay retention provisions do not

[[Page 11691]]

apply to conversions from General Schedule special rates to
demonstration project pay, as long as total pay is not reduced; (4)
provide that an employee on pay retention may receive between 0 and 50
percent of the amount of the increase in the maximum rate of basic pay
payable for the pay band of the employee's position. This waiver does
not apply to ST employees unless they move to a GS-equivalent position
under the demonstration project under conditions that trigger
entitlement to pay retention.
    Part 550.703: Severance Pay--This waiver applies only to the extent
necessary to modify the definition of ``reasonable offer'' by replacing
``two grade or pay levels'' with ``one band level'' and ``grade or pay
level'' with ``band level''.
    Part 550.902: Hazardous Duty Differential--This waiver applies only
to the extent necessary to allow demonstration project employees to be
treated as General Schedule employees. This waiver does not apply to
employees in Pay Band V of the Engineers and Scientists Occupational
Family or ST employees.
    Part 575, subparts A, B, C and D: Recruitment and Relocation
Bonuses; Retention Allowances; Supervisory Differentials--This waiver
applies only to the extent necessary to allow (1) employees and
positions under the demonstration project to be treated as employees
and positions under the General Schedule and (2) employees in Pay Band
V of the Engineers and Scientists Occupational Family to be treated as
ST employees for the purposes of these provisions. This waiver does not
apply to ST employees who continue to be covered by these provisions,
as appropriate.
    Part 591, subpart B: Cost-of-Living Allowances and Post
Differential-Nonforeign Areas--This waiver applies to the extent
necessary to allow (1) demonstration project employees to be treated as
employees under the General Schedule and (2) employees in Pay Band V of
the Engineers and Scientists Occupational Family to be treated as ST
employees for the purposes of these provisions. This waiver does not
apply to ST employees who continue to be covered by these provisions,
as appropriate.
    Part 752.401(a)(3): Adverse Actions--This waiver applies only to
the extent necessary to (1) replace ``grade'' with ``pay band'' and (2)
provide that a reduction in pay band level is not an adverse action if
it results from the employee's pay being exceeded by the minimum rate
of his or her pay band.
    Part 752.401(a)(4): Adverse Actions--This waiver applies only to
the extent that adverse action provisions do not apply to conversions
from General Schedule special rates to demonstration project pay, as
long as total pay is not reduced.

Appendix A: Occupational Series by Occupational Family

I. Engineers and Scientists

0101  Social Science
0180  Psychology
0190  Anthropology
0401  Biology
0403  Microbiology
0405  Pharmacology
0408  Ecology
0410  Zoology
0413  Physiology
0414  Entomology
0415  Toxicology
0440  Genetics
0601  General Health Science
0602  Medical Officer
0610  Nurse
0630  Dietitian & Nutritionist
0644  Medical Technologist
0662  Optometrist
0701  Veterinary Medical Science
0801  General Engineering
0808  Architecture
0830  Mechanical Engineering
0855  Electronics Engineering
0858  Biomedical Engineering
1301  General Physical Science
1306  Health Physics
1310  Physics
1320  Chemistry
1520  Mathematics
1529  Mathematical Stat
1530  Statistician

II. E&S Technicians

0181  Psychology Aid/Technician
0404  Biological Science Technician
0499  Biological Science Student Trainee
0620  Practical Nurse
0640  Health Aid & Technician
0645  Medical Technician
0646  Pathology Technician
0647  Diagnostic Radiologic Technologist
0649  Medical Instrument Technician
0802  Engineer Technician
0809  Construction Control
0818  Engineering Drafting
0856  Electronics Technician
1311  Physical Sciences Technician
1521  Mathematics Technician

III. Administrative

0018  Safety & Occupational Health Management
0028  Environmental Protection Spec
0080  Security Administration
0201  Civilian Personnel Management
0205  Military Personnel Management
0301  Misc Administration & Program
0332  Computer Operation
0334  Computer Specialist
0340  Program Management
0341  Administrative Officer
0342  Support Services Administration
0343  Management/Program Analysis
0346  Logistics Management
0391  Telecommunications
0501  Financial Administration & Program
0510  Accounting
0511  Auditing
0560  Budget Analysis
0905  General Attorney
1020  Illustrating
1035  Public Affairs
1040  Language Specialist
1071  Audiovisual Production
1082  Writing & Editing
1083  Technical Writing & Editing
1084  Visual Information
1102  Contracting
1105  Purchasing
1152  Production Control
1222  Patent Attorney
1410  Librarian
1412  Technical Information Services
1601  General Facilities & Equipment
1640  Facility Management
1670  Equipment Specialist
1710  Educational & Vocational Training
1801  General Inspection, Investigation and Compliance
1910  Quality Assurance
2001  General Supply
2003  Supply Program Management
2010  Inventory Management
2050  Supply Cataloging
2181  Aircraft Operation

IV. General Support

0086  Security Clerical & Asst
0302  Messenger
0303  Misc Clerk and Asst
0304  Information Receptionist
0305  Mail and File
0312  Clerk-Stenographer/Reporter
0318  Secretary
0322  Clerk-Typist
0326  Office Automation Clerical/Asst
0335  Computer Clerk/Asst
0344  Management Clerical/Asst
0525  Accounting Technician
0561  Budget Clerical/Asst
0675  Medical Records Technician
0679  Medical Clerk
1016  Museum Specialist & Technician
1060  Photography
1087  Editorial Asst
1106  Procurement Clerical/Tech
1411  Library Technician
1499  Library and Archives Student Trainee
1531  Statistical Asst
2005  Supply Clerical/ Tech
2102  Transportation Clerk/Asst

[[Page 11692]]

Appendix B: Project Evaluation and Oversight

Intervention Impact Model--DoD Lab Demonstration Program
    1. Compensation

BILLING CODE 6325-01-P

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Appendix C. Performance Elements.

    Each performance element is assigned a weight between a specified
range. The total weight of all elements in a performance plan is 100
points. The supervisor assigns each element some portion of the 100
points in accordance with its importance for mission attainment.
    All employees will be rated against at least the five generic
performance elements listed through ``e'' below. However, only those
employees whose duties require supervisor or manager/leader
responsibilities will be rated on element ``f''. Supervisors will be
rated against an additional performance element, listed at ``g'' below:
    a. Technical Competence. Exhibits and maintains current technical
knowledge, skills, and abilities to produce timely and quality work
with the appropriate level of supervision. Makes prompt, technically
sound decisions and recommendations that add value to mission
priorities and needs. For appropriate career paths, seeks and accepts
developmental and/or special assignments. Adaptive to technological
change. (Weight Range: 15 to 50)
    b. Working Relationships. Accepts personal responsibility for
assigned tasks. Considerate of others views and open to compromise on
areas of difference, if allowed by technology, scope, budget, or
direction. Exercises tact and diplomacy and maintains effective
relationships, particularly in immediate work environment and teaming
situations. Always willing to give assistance. Shows appropriate
respect and courtesy. (Weight Range: 5 to 15)
    c. Communications. Provides or exchanges oral/written ideas and
information in a manner that is timely, accurate and cogent. Listens
effectively so that resultant actions show understanding of what was
said. Coordinates so that all relevant individuals and functions are
included in, and informed of, decisions and actions. (Weight Range: 5
to 15)
    d. Resource Management. Meets schedules and deadlines, and
accomplishes work in order of priority; generates and accepts new ideas
and methods for increasing work efficiency; effectively utilizes and
properly controls available resources; support organization's resource
development and conservation goals. (Weight Range: 15 to 50)
    e. Customer Relations. Demonstrates care for customers through
respectful, courteous, reliable and conscientious actions. Seeks out
and develops solid working relationships with customers to identify
their needs, quantifies those needs, and develops practical solutions.
Keeps customers informed and prevents surprises. Within the scope of
job responsibility, seeks out and develops new programs and /or

    f. Management/Leadership. Actively furthers the mission of the
organization. As appropriate, participates in the development and
implementation of strategic and operational plans of the organization.
Develops and implements tactical plans. Exercises leadership skill
within the environment. Mentors junior personnel in career development,
technical competence, and interpersonal skills. Exercises due
responsibility to oversee technical/acquisition/organizational
positions assigned to them. (Weight Range: 0 to 50)
    g. Supervision/EEO. Works toward recruiting, developing,
motivating, and retaining quality team members; takes timely/
appropriate personnel actions, applies EEO/merit principles;
communicates mission and organizational goals; by example, creates a
positive, safe, and challenging work environment; distributes work and
empowers team members. (Weight Range: 15 to 50)

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[FR Doc. 97-6167 Filed 3-10-97; 8:45 am]
BILLING CODE 6325-01-C