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Published: 2007

Total Pages: 178

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Federal agencies are accelerating their efforts to build contemporary personnel systems to foster leadership and to enhance employee performance. These alternative personnel systems (APSs) have the potential to significantly improve agency performance through changes in the way civilian employees are paid and evaluated. In particular, performance-based and market sensitive pay systems have proven successful in the private sector and are essential elements of successful APSs. In 2004, through the National Defense Authorization Act, Congress gave special recognition to the importance of the civilian Department of Defense (DOD) workforce, and signaled its intent for DOD to build an effective infrastructure for aligning human capital management with agency mission requirements, by authorizing the development of an APS for the Department of Defense, the National Security Personnel System (NSPS). Under the Act, the Secretary of Defense and the Director of the Office of Personnel Management were given joint responsibility for prescribing regulations for NSPS. In keeping with OPM's overarching leadership role in the strategic management of the Government s human capital, including assessing the management of human capital by Federal agencies, OPM is providing this analysis of DOD's implementation of its new authorities. It describes the assessment methodology, the assessment framework, and the results of the analysis. We believe the analysis will be a valuable tool in helping DOD s ongoing implementation of its APS. Through it, OPM also responds to Congress s expectation the agency will fulfill its oversight of alternative personnel systems, in accordance with our statutory mandate.