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Town Hall Meeting with Secretary of the Navy Gordon England on National Security Personnel System

Presenter: Secretary of the Navy Gordon England
July 07, 2004

Wednesday, July 7, 2004

Town Hall Meeting with Secretary of the Navy Gordon England on National Security Personnel System

 

SEC. ENGLAND:  Have a seat.  Well, good afternoon.  We had to get this all synchronized because we do have this television linkup around the world and it happens to be precisely on time.  So I thank you all for being here and for everybody who’s on either the Pentagon Channel watching or the Web site, welcome electronically, so it’s good to have you all here, but particularly everybody’s who here in person.  Thanks for being here. 

 

In my other life, I’m secretary of the Navy, but today I’m not secretary of the Navy.  Today I’m here for NSPS, National Security Personnel System, so another responsibility – another hat I wear for Secretary Rumsfeld who asked me to take on this responsibility earlier this year.  So the day’s topic is not Navy related.  Today’s topic is strictly NSPS and it’s a topic, one, for us to tell you what is happening in terms of what are we doing, in terms of NSPS, where are we and also the compass in terms of where we’re going.  I will tell you at the outset this is not a discussion about NSPS itself, that is we don’t have an NSPS program yet.  This is still getting to the NSPS program. 

 

So what I want to talk to you today about is how we get there.  Now I know everybody will have a lot of questions about the specifics, because everybody wants to know how about pay for performance or how about pay banding or how about all the specifics.  Well, we’re not at the point yet and we won’t be at that point for some time.  And I’ll explain that to you today as we go along.  Now typically after lunch, I speak about 10 minutes.  Today maybe this could be 15, 20 minutes ‘cause I find, first of all, that dialog, I’d much rather address what’s on your mind, so I’d much rather have the dialog, so we will have a lot of time for questions and answers.  And I have some people here to help me because I certainly don’t know all the answers.  I will tell you this, each time I’ve been confirmed, which is now three times in this administration, I have told – I can see some people chuckling, like why would you do that three times, right.

 

[Laughter]

 

But three times and each time I said, I vow to be forthright, honest and direct with everybody and in every situation and that’s what we do and that’s what I do, so you will get direct answers because we don’t all the answers.  I mean, if we just don’t know, then that will be the status of today.  But everything we know, you’ll know today about what our process is to get to the answer. 

 

And I want to introduce a few people.  And particularly, if you’re out on the Web, for Pentagon Channel, so when you send questions in via the Web or in the future, you want to talk to people, you’ll be able to put a face with who you’re talking to.  So this program is being run – I would not say classic Pentagon techniques, but at least one technique that we are using -- that is we have a PEO, so we have a Program Office and we have a Program Executive Office.  We have a PEO, like we do for any major program.  So whether it’s a communication system for the army or a ground combat vehicle or a ship or an airplane for the Air Force, there’s a PEO, a PEO shop.  And we have a PEO shop and Mary Lacey who runs the PEO shop. 

 

So Mary Lacey has 30 years of experience, started as a GS-2 intern, went to University of Maryland.  Worked her way to the position she is now, SES, a lot of experience and she’s had a lot of experience with our employees, with mentorings, with demonstration projects.  So she is very attuned, which is what we want is somebody who is very employee-attuned and with a lot of experience to run the program.  So Mary runs the program. 

 

Ron Sanders is here for OPM because OPM is a partner with us and he co-chairs what we call the OIPT, so the Overarching Integrative Product Team.  We’ll talk a little bit about that later.  I normally ask [inaudible], but both Ron and George are sort of interchangeable and George is out of town.  Today Ron was good enough to sit in.  And also but he fills the slot -- he and George co-chair of this team that overlooks the whole process.  Charlie Abell, principal deputy undersecretary of defense and our personnel organization.  Also OIPT and a senior member of our team. 

 

Now we have a couple more people here also OIPT, Billy Navas from Navy, ASN.  And we have Ray DuBois doing all the defense agencies.  And let’s see, sitting in for Mike -- OK, Dominguez is not here today.  But Mike Dominguez, so you know, each assistant secretary of the services are all part of this OIPT.  Brad Bunn who is our deputy – so Brad also a lot of experience personnel expert and he is responsible today for all the systems that manage our personnel systems.  And Bob Earl who is my special assistant, does a lot of work for me.  So faces that you can think about when you’re talking, you know, on the telephone or the Web. 

 

OK, now let’s talk about this whole process.  First of all, where were we?  Years ago, long before I showed up. DoD started a number of demonstration projects that have been underway, I believe some of them, for over 10 years.  So we’ve had a large number of demonstrations projects throughout this whole enterprise.  This enterprise, by the way, is over 600,000 people – 650,000 people – a large number of people.  We have had these demonstrations going and have learned a lot from the demonstrations.  That is we’ve tried out things.  You know, we’ve tried different ways to run the organization.

 

By the way, you may not know this – we do not have a personnel system today in the DoD.  We have, I believe nine different personnel systems that all operate within this enterprise, so we’ve had different demonstration projects in these different personnel systems.  Frankly, I was surprised. I would have thought there’s sort of one system across a whole department.  But it turns out, there’s not. But we’d like to have one system across the department.  It would certainly make it, I think, easier to manage and better for our employees.  So if you go back, we ran a lot of demonstrations to see how can we improve this system.  How can we accumulate some data.  So all these demonstrations have been ongoing.  And by the way, one of them, Mary Lacey had in her organization, ‘cause she has 26,000 people?

 

[To Mary Lacey]:  Hmm?

 

LACEY:  Had. 

           

            SEC. ENGLAND:  Have had before we [inaudible].  She had 26,000 people.  And so she had demonstration projects and is familiar with some of that data.  So there is a whole background of data that’s available in terms of experience on this program. 

 

            Then after the demonstrations or while there were still going on, during this whole period of time, there was an interest in the Department of Defense to see if we could upgrade and improve this whole personnel system.  We have – first of all, we have nine systems -- like to have one.  But you’d also like to have a system that’s more attune to just a modern system.  We like to be able to hire people quickly.  Do you know, a lot of times we can’t hire people.  By the time we go through our laborious process, somebody takes another job -- you know, nowadays, you go into an employer, you interview, you walk out with a job offer in your hand.  It’s not the case in DoD, I can assure you.  Lengthy time, we’re out of date and a lot of the things we do were just slow, cumbersome.  We’re not very good at what we do in our personnel practices. 

 

            Then along came 9/11 -- great shock to America.  And by the way, I will tell you that my lifetime, this is a third “ism” – I’m probably older than everybody in this room and probably older than everybody watching who’s a government employee -- three “isms.”  I was four years old, fasciism, World War II, then communisim, forty years.  First was four years, the next was 40 years.  Now we’re into the third “ism” -- terrorism and it’s going to last a long time and it’s a totally different kind of threat to America.  Here’s a threat of terrorists.  And one characteristic of this threat, they don’t have an infrastructure.  Cell phones, Internet, voice, send messages – they don’t have large complex organizations like we do -- no bureaucracy at all.  They’re very quick, they’re very agile, they change.  By the way, they change daily.  We know that overseas.  They can change their tactics very quickly.  So it’s a different world we live in.  So 9/11 was a catalyst to say hurry up this process because we were working and we started really working to transform the military when Secretary Rumsfeld came in.  How do we better attune the military?  That actually started in the summer of ’01, was accelerated after 9/11. 

 

So last year, along with this transformation of the military, after a lot of debate, a lot of hearings in the Congress, congress passed a new law.  New law gave DoD the authority to stand up a new personnel system or a modified personnel system.  It’s different.  Let’s call it a different personnel system because it’s still built on all the principals that exist with the current system – I mean, the current principals that we all live by, a merit system, protections and everything is all still there.  But how do we make this system more responsive? 

 

Now notice what’s happened.  What has happened over the years is that we have migrated a lot of military people to civilian jobs.  We have also hired a lot of contractors.  We have also outsourced a lot of work.  So we’ve been doing things, frankly, it appears to me, to work around what has been a cumbersome system that we have in terms of our own personnel.  I mean, we should be able to return those military personnel to military jobs, replace them with our civilian workforce. 

 

We shouldn’t be doing all the outsourcing we’re doing.  But we need a flexible system so we get the same benefits.  We’re basically working around the system.  So now we have an opportunity, I think, to benefit the employees, to benefit the department, and most important, to benefit America at a time when it’s very, very important that we defeat this great threat of terrorism.  And a lot of that falls on this department and also falls on the Department of Homeland Security where I had the privilege to serve for a short period of time. 

 

            So that’s what led up to where we are today.  Now earlier this year, Secretary Rumsfeld asked if I would help manage and oversee this program basically help him put this program in place.  So what we did is we put together teams of people in about four or five different areas to better understand how to go about this process.  All employees – brought in all employees from all over the country, part of teams -- some teams 20 people, some teams 100 people some teams, 50 people – to get an understanding.  We went to the Congress and we said here’s what we’re doing.  Got all the congressional leadership.  We said here’s how we’re going about this to make sure they were comfortable with the process.  So we brought – you know, we brought this as much into the open as we could, so we could get input and that’s part of what this is today, to get input. 

 

            So we formed the teams.  And then over the teams, we’ve put an OIPT – Overarching Integrated Product Team to integrate the work that was going on in all the individual teams.  And so OIPT team you see today still in place.  And with, that we structured a mechanism to get to the NSPS system.  And the mechanism fundamentally is to get input.  That is have dialog, receive input, and consider that input in the design of this system.  So we want this to be a collaborative process.  It’s not negotiating to an answer.  It is getting input from literally thousands of people around the country and around the world so we can understand their views, so we’ve put this system together, we will have a system that best represents our most important asset – our people.  And by the way, you are the most important asset in DoD. 

 

            I mean, when this building is empty -- and I’m here quite often when it’s almost empty – it’s just an empty building.  If you get on one of our aircraft carriers before the people go onboard, it’s $7 billion of value but no value to the nation until you bring sailors onboard.  It’s true with all of our systems.  So it is all about people.  So recognizing people are greatest asset.  We want this system to result in a system that provides an environment where everyday people can excel.  Everyday people come to work and say, wow, it’s terrific to work here, look how much I got accomplished today.  Go home and brag to spouses and kids about this great job you can do for America.  That’s what this is about.  This is going to put that kind of system together.  That’s what want to achieve.  When it’s all over, that we can all do a better job for America. 

 

            So it’s an open collaborative process and with a PEO office in place.  So we’re reaching out.  We’ve been reaching out to our union folks, some of who are here today.   I’ve had a number of them in my office.  We had 31 unions at an offsite meeting.  We’re still having those discussions to understand how they can best give us input, how we can best consider that.  But we will have a process throughout.  Now here’s the schedule, by the end of this year, hopefully – by the way, when I say schedule, we have schedule, but the schedules are event driven, they’re not time driven.  That is when we’re ready, we’ll do it, but not before.  But at least our tentative schedule, by the end of this year, we will publish a set of regulations in the Federal Register.  And those regulations will deal with our HR system, our labor system and our appeals and grievance system.  They will be relatively broad, some more precise, but some broad and they will be published in the Federal Register end of this year. 

 

            So we will have this year a number of focus groups.  We will be having focus groups around the world, literally, getting input in the focus groups and those inputs go into working groups and then the working group folks put together the different alternatives, options that we may have in designing this final system.  Goes into broad regulations by the end of the year, and by the middle of next year about this time next year, we will be putting the first people into this system.  So about this time next year, we start NSPS in terms of actually affecting people.  And then it will take about three years to fully implement across DoD.  Now keep in mind this is a lot of different job classifications, a lot of different skills, a lot of different jobs.  It’s going to be a complex process.  It’ll take a lot of training, a lot of communication.  I mean, it’s a big – it’s a massive job.  It’s like designing a complex weapon system – even more so. 

 

So it’ll take about three years before the whole system’s implemented.  Late in ’08, we should have the whole system in place and implemented.  And now, the first time we implement we will go through about a six-month period and get feedback.  So each time we do this, will be learning experiences so that we can feedback and continue to modify the system to make it better as we go.  And by the way in my judgment, it’s never really finished.  There’ll always be this modification to keep the system up to date and current, compatible with information technology, etcetera.  Obviously, the system needs to continue to grow and adapt. 

 

That’s the schedule.  That’s where we are and that’s the process.  Now we have a lot of people who have been providing us inputs and they’re all being considered by the working groups.  And the whole premise again is to have a highly effective workforce and a workforce that dearly loves to work for the Department of Defense, well-trained, highly competitive and do the work of this great nation.  That’s where we are. 

 

OK, I’m going to stop because what I’d like to do is address your questions.  And I have some folks with me who can help with the answers, because they’re the experts and I’m sort of at the top level of this.  But I would be pleased to address any issues or any questions you may have.  So if anybody has – by the way, we also have a lot of questions came I from the Web and we’ll address some of those, Mary, but we’ll wait a little bit, I think.  So maybe we’ll catch a couple. 

 

How about right here?  Any questions?  Here in the audience?  Yes.  Yes, ma’am. 

 

Q:  Yes, sir.  [inaudible] Wingfield [inaudible] just…

 

SEC. ENGLAND:  Good. 

 

Q:   … just concern, sir.  How will you determine your pilot group, when you begin your test pilot program? 

 

SEC. ENGLAND:  Well, let me tell you, that is a magnificent question.  Because what you’d like to do is get a pilot group that best represents the cross section of the Department of Defense, so that the data you get back from the pilot group, is the most representative data you can gather applicable to all DoD.  So that means you can slice this in a lot of different ways ad we have not decided how to do that yet.  We have a group working to understand how you can best do this because you like to pick up different kinds of functions, different skill mixes across different service organizations.  And by the way, the size, we don’t know the size yet, but I would estimate it’s – I mean, it’s not in the hundreds, it’s in thousands, right, otherwise you can get a representative group.  So I would expect you’re in the tens of thousands.  But I won’t presume the answer because there’s a group working on the answer.  But if you ask my opinion, I would tell you this could be tens of thousands and this could be across as many functions as we can within DoD.

 

[To Mary Lacey]:  Mary, is that right?  Is that right.  It’s the plan.  OK.  Got somebody to check me out here and make sure I’m doing this right. 

 

Yes, sir.  Way in the back. 

 

Q:  As far as the input is concerned, have you gone out to the private sector and gathered the best practices and how are you going to factor that into your deliberations and mesh it with the input from the DoD family? 

 

SEC. ENGLAND:  OK.  We have – Mary, we’re going to let you stand up and address that.

 

LACEY:  We have gone and talked to the private sector and we’ll continue to have those conversations as we’ve developed what the options are for NSPS.  Much of the heavy lifting on that topic will be done in the individual working groups themselves.  Those working groups are going to be made up of folks that have significant experience and expertise in their various human resource disciplines, such as classification, staffing, things like that.  In addition to line managers and others that know what it’s like to live under a system that’s perhaps a little bit different or live under the system that we have right now.  So that’s where that mixing is going to occur of ideas in things that we’ve learned from the various demonstration programs, the private sector, from the academic world as well. 

 

SEC. ENGLAND:  But that’s also why these pilots are very important, because our mission is different in a lot of these private industries.  Different mission and so we need to really understand this and work this and we don’t want to do something – first of all, we’re doing this, you know, this is a little bit like maintaining and airplane while it’s flying.  I mean, everyday, everybody’s coming to work.  So we’re changing the system while we’re working everyday.  So we have to be very careful that we don’t damage the system in any way.  I mean this has to be thoughtful, I think, reasonably slow or at least measured to make sure that we know exactly what we’re doing each step of the way and then do pilots to make sure we don’t get any surprises and if we do, we have time to correct them at the end of the pilot.  That’s why I said this is not schedule driven, it’s event-driven and that’s why it’s important to be event driven.  If you’re not ready for the next step, we learn a lot – and you know, too many inputs out of the pilot and we obviously delay before we go into the next phase.  So we’ll make sure we’re doing it right every step of the way. 

 

  OK, the other corner here. 

 

Q:  Good afternoon. 

 

SEC. ENGLAND:  Good afternoon.

 

Q:  Got a question and I’m not quite sure of how I want to phrase this, so you topped it off and then you said “event driven.”  In this day and time, we’re going through so many different challenges and I wanted to know – I believe my question is going to be directed to OPM – is how is the work-from-home program will play into this new scheme or will it play at all?

 

SANDERS:  It really shouldn’t be affected.  We’re talking about the impact of NSPS on tele-work.  In fact, we’ve got a number of major initiatives under way to make that more accessible to employees.  But it really is independent of the National Security Personnel System.  That has more to do with pay and performance management.  And while there’s some potential spillover, tele-work should remain relatively intact and we continue to facilitate it and favor it. 

 

SEC. ENGLAND:  Good.  Thanks, Ron. 

 

Any other ones?  OK.  Mary, there you go.  Please.

 

Q:  I guess I’ll just speak loudly.  Hi.  I’m Holda Piscaborn (sp) an engineer with Puget Sounds Naval Shipyard.

 

SEC. ENGLAND:  Hi. 

 

Q:  In my cohort of employees of working for the Navy for five years or less, one of our biggest frustrations is focusing so much on real compliance, versus the opportunity to innovate.  And in our case I think we’re more than satisfied with benefits and pay.  But the opportunity to innovate and use the talents of the people that are already there, I’d like to know how that might be addressed. 

 

SEC. ENGLAND:  God bless you.  What a great comment to make. I couldn’t agree with you more.  I mean, that’s what we want.  We want to have a system where people can innovate and contribute to their maximum potential, not to be bound up by a lot of rules and regulations.  By the way, this is my experience in the commercial world.  What we did is we redid the personnel system and we got rid of a lot of the rules.  We got rid of a lot of regulations.  We made it much easier for people to work. 

 

By the way, that’s part of the pay banding, right, where you don’t have to worry about every single classification in our professional ranks, wide band, work within that band, do a variety of jobs, particularly technical people.  By the way, that’s critical to us.  It’s absolutely critical in this day and age that our technical people be able to contribute to their maximum capability because that’s our great challenge.  I mean, we were changing, I think, all the services, more and more technical, more and more challenges from overseas. 

 

You know, we’re not the same dominant technical power we were in the past.  You know, we don’t graduate as many engineers as China, by the way.  Do you realize that?  They have more engineers than we do.  So we’re in a very competitive world.  And unless we maximize the opportunity for every single person, I will tell you, we’ll fall behind.  We will not be able to compete in the future.  We’re not going to be able to compete in the future in the United States unless we literally maximize the opportunity for every single person in America.  It’s a very competitive environment.  And for us, you know, it’s not like you go out of business.  It’s like you the battle.  It’s like people get killed, right, so I mean, it’s a profound difference and that’s why this comment about the commercial – it is different for us.  We have a whole different consequence. 

 

So – but you’re absolutely right.  That’s what we want to do.  And you’re right, the pay, I think, is good.  I think the benefits are good.  What we need to do is provide this environment for people to excel.  That’s what this is all about.  And I just hope we can do it.  I will tell you, to me, it’s crucial we do it.  It’s absolutely – it’s crucial to DoD, but it’s crucial to the country.  It is crucial to the long-term well-being of the country we be successful in doing this.  Otherwise, I’ll tell you, we’re going to fall behind and we cannot afford to fall behind.  So let me tell you, I’m on your side on this.  And by the way, I came out of technical organizations and I am an engineer and so I can relate to all this and thanks for the comment. 

 

Yeah, Ron?

 

Q:  Actually, I got a big mouth.  I’m Ron Hall, the president of [inaudible] department of the [AFL CIO?].  And Secretary England, we represent all of the naval shipyards.  We represent China Lake where you had a demonstration project that, in our opinion, was not a [inaudible] success.  The way we viewed that as people actually transferred out of the system, so they could get away from that, but that’ll be subject for another day. 

 

One of the comments I’d like to make is that we have tried to meet and put input from all of these people that we represent.  And we would appreciate that the folks that are listening today understand that we have hundreds of collective [inaudible] in the private sector and that we would be glad to share the best practices in General Gynamics and Northrup Grumman ship systems and all of the naval shipyards in all the places we’ve got with the groups.  In fact, those are some of the good….

 

SEC. ENGLAND:  Good.

 

Q:  … practices out there is…

 

SEC. ENGLAND:  Good.

 

Q:  … collective bargaining.  We respect the rights of management to make good decisions and we’ll help you as best we can.  As long as we’re an equal partner and we’re treated with respect and we’ll respond in kind.  But we have more than input in the system, sir.  We are the exclusive representatives.  This folks have elected us to represent their wishes.  Under the present law, what you’re doing is against the labor law, except that HR 1588 said this is a sole process.  So by you going directly to the [inaudible] members and bypassing the unions, it doesn’t set a good tone with us. 

 

SEC. ENGLAND:  So is that the question?  I’m trying to get to the question. 

 

Q:  My question is is, why…

 

SEC. ENGLAND:  OK, thank you.

 

Q:  … are doing this [inaudible] so that we can actually tell you the concerns of the workers at Norfolks Naval Shipyard, Puget Sound Naval Shipyard and China Lake Naval Air…

 

SEC. ENGLAND:  OK.  I got the question.  Can I answer it? 

 

Q:  Yes, sir.  

 

SEC. ENGLAND:  OK. 

 

Q:  Please. 

 

SEC. ENGLAND:  Look, we have a law.  Law says provide – get input from people, consult people to help put this system together.  So I will tell you, my [inaudible] going out of our way to do that.  I mean, we are trying to get with everybody, including all the union leaders.  You’ve all had an opportunity to come personally see me, had opportunities for me with the leadership team.  Everybody in this great organization has an opportunity to affect this program.  Union leaders, employees across the board, in every walk of life, they can come affect and provide input into this system.  So we will have opportunities for people.  Look, they can come into to us, Web sites, whatever.  I mean, the world is a horizontal communication world.  It’s not stovepipe, it’s horizontal.  Everybody can communicate with anybody and they have our Web site.  Everybody has the Web site, provide input into the system.  I mean, that’s the way the system is.  They can get on the Web like everybody else, give us their input.  So it isn’t bypassing everybody, it’s making the tools available that everybody in this organization, so they can all participate and be part of this great exercise.  And I will tell you, look at my Web site, there’s 15 principles on there and I’ll tell you the first principal.  Is first principle is provide an environment for everyone to excel.  And the second principle is treat everybody with dignity and respect.  OK, and there’s 13 more.  They’re the first two. 

 

So I will tell you and if you find everyplace I’ve ever worked, is treat everybody with dignity and respect.  And part of that is recognizing everybody as an individual has a right to provide an input directly to me or to anybody else.  I mean, they can provide it directly to you, but they can also provide it directly to me, they are employees in the Department of Defense.  Look, we will work this with every single employee.  That’s our objective.  And the end of the day, we want a system that will excel. 

 

Look, the demonstrations, I mean, they were demonstrations we learn from them.  So it’s not that every demonstration was perfect, that wasn’t the objective. The objective was to learn from the demonstrations, so we could put it to use the next time.  That’s why you have demonstrations.  These are learning experiences that make sure we have it right by the time by the time the system is fully implemented.  So we’re going to have demonstrations.  We’ll learn from a lot more before we start next year.  And even when we start next year, that’s still the beginning – that’s still a pilot – and we’ll learn from that experience.  And these are learning exercises.  They’re not intended to be perfect, they’re intended to be learning exercises. 

 

OK.  Now let’s get – let me interrupt one second.  We have some questions that did come in.  And I’d like to address just a couple and then we’ll come back.  But for all the folks that are out there, watching and on the Web, they also sent in some questions, so I’d like to just let Mary address a few of those.  And by the way, I would encourage everybody on our Web site, let’s see:  www.cpms.osd.mil/nsps/.  So send in questions or comments.  Now look, there’s hundreds of thousands of employees.  It may take awhile to get an answer, but you will get an answer, so you just have to be patient.  We may have to group them and things of that sort.  But feel free, I mean, around the country and around the world throughout this process, go to our Web site, we’ll try to keep you updated, as with everything going on, so you’ll have some feedback directly.  But also ask questions and I promise you, you will get answers.  There may be a delay, but you’ll get answers. 

 

So Mary, how about a few of the first questions.

 

LACEY:   We actually had 20 questions having to do with pay inequities and cost of living.  So let me just read you one of the questions:  Is anything being done to correct pay inequities in NSPS that unfavorably discriminates against federal employees in Hawaii and other non-foreign cost-of-living areas?  Let me just give you a fact-based answer to this.  The NSPS regulatory authority – statutory authority that we have does not give us any relief or change anything about locality pay.  So unfortunately, we’re not going to be able to do anything about the concerns in that arena, just because of NSPS. 

 

We also got quite a few questions Mr. Secretary, about pay banding, in general, pay banding and streamlining it is to be a key feature of NSPS.  Existing pay band systems were designed to address specific concerns or specific activities.  How will NSPS design process ensure banding serves the needs of the entire workforce? 

 

Great question.  We don’t have a specific answer to how we’re going to construct pay banding.  For those of you who aren’t aware of the term “pay banding,” I recommend also that you go to the Web site.  There’s a small tutorial on there and it can also show you how we implemented pay banding in some of the demonstration programs that are already in place.  Pay banding essentially takes the GS scale and collapses it into fewer categories.  So instead of there being one through 15 or you might have four or five bands.  We have not decided what those bands are going to be.  That’s part of what the working groups will be doing.  We’ll be making recommendations for the OIPT to discuss and to bring forward to the senior leadership of the Department of Defense and OPM.  There’s a lot of different ways that have been suggested and a lot of different experiments that have been tried for different types of work environments.  And frankly, I can’t stand here and tell you today which ones are the best.  We’re going to go get all the information we have, take a look at it and have some discussions and decide what the options will be. 

 

SEC. ENGLAND:  Yeah.  By the way, I do want to tell you -- I didn’t comment – OPM is a very valued partner in this and they do partner with us.  Because OPM has this great experience for the work across the whole federal government.  And now regulations when they are published in the Federal Register.  First, they are jointly signed off by Kay Cole James -- Kay Cole James who’s the director of OPM and also by Secretary of Defense Donald Rumsfeld.  So it requires both to sign off before it goes in the Federal Register.  So this is a very, very close partnership we have with OPM in helping to put this program together. 

 

OK?  Do you have one more? 

 

LACEY:   I have another one. 

 

SEC. ENGLAND:  OK. 

 

LACEY:   What safeguards will be implemented to ensure that favored employees do not receive too much pay, while less favored employees receive too little pay? 

 

LACEY:   That’s a difficult question, but let me just say this.

 

SEC. ENGLAND:  Great question

 

UNKNOWN:  There is no system in the world that we could design that would, in and of itself, cause managers to behave – who choose to behave incorrectly to behave correctly.  There’s nothing we can build into a system.  That is a leadership issue.  We expect the managers to behave properly.  And we want a system that is open and sufficiently transparent, so therefore, if we run into that and we see that, that it will be easy to spot and it will be easy for us to deal with in an appropriate way.  But there is no system that guarantees good behavior.  I will tell you that. 

 

SEC. ENGLAND:  But you can have reviews.

 

UNKNOWN:  Absolutely. 

 

SEC. ENGLAND:  I mean, you can have quality checks, so you can review.  And also, by the way -- Mary, if I can add something – I mean, pay for performance is one aspect of this, right, that people get paid for their performance, so a very good performance, they get better raises than people who don’t perform very well, right, so it’s not about longevity, it’s about doing your job. 

 

Now, if you’re going to have pay for performance, then you have to have measurable objectives.  So ahead of time, I’ll tell you what’s great about this system.  What’s great about this system, it’s going to force the managers to manage better.  It will force the managers and the supervisors ahead of time and sit down with you at the beginning of the year and say this is what we want to accomplish.  Here’s the objectives.  They’ll make sure that they can be achieved between the two parties. 

 

Here’s the objectives, say, here’s how we’re going to measure the objectives.  So you actually have a system in place of what’s to be accomplished this year and what’s the measure for that performance, otherwise you can have pay for performance unless you have objectives and measurements against those objectives.  So it has to be specific and quantifiable.  Something you can measure has to be clearly understood. 

 

So I will tell you, I think the system’s terrific because people will know their expectations, what’s expected of them, in terms of that year’s performance or that six months, whatever it turns out to be.  And you have an opportunity to sit down.  I mean, I think the whole department will operate better because people will sit down and actually talk about jobs that need to be accomplished and what’s the schedule to that and what’s the need, etcetera.  So I think this is a terrific aspect of this pay for performance, not just the pay aspect is a fact that-- my judgment – we’ll end up running the department better. 

 

By the way, this is not unusual in my commercial [inaudible] where it’s always been that way.  I mean, I’ve never been in this system and wasn’t paid for performance.  I mean, my whole career has been that way.  Sat down, you actually had to find objectives they were written out, dates expected to be accomplished. You got graded and not at the end of the year, but throughout the year.  You know, the boss will say, Gordon, you know, that was great, but you didn’t do this very well, you ought to be doing this and there’s something didn’t work out.  And I decide, well, I didn’t have that skill, so I went and took a class.  And, you know, the whole work force, I think, gets upgraded, we get more skills understand shortcomings. 

 

Look, I just think it’s very important as you go forward.  This is an opportunity to improve, I think the skill levels, education, everything because when you do this, you can’t just say, oh, well, you didn’t make it.  You have to be able to say, hey, it didn’t work out.  We need to get you enrolled in such and such or whatever and so people maintain their skills as they go along.  It doesn’t fall out of date – always competitive.  I think that’s what we owe everybody and I think that’s the environment people would expect to work in.  But there’s a lot of side benefits to this. 

 

Q:  Mr. Secretary.

 

SEC. ENGLAND:  But we never did get your question, did we?  OK. 

 

Q:  Could I just follow up real quick.  Sort of the flipside of the difficult question that Mary relayed to us and you’ve touched on it – the idea of protections.  First, as you’ve indicated, the merit principles that are the foundation for our civil service cannot be touched.  They can’t be waived, they can’t be changed.  Among those principles is equal pay for work of substantially equal value.  Another of the principles is a prohibition on personal favoritism.  Decisions must be made on merit.  So you have an overlay of principles that protect employees.  Things like veterans preference are protected. Due process is protected.  It cannot be changed. That means notice the right to reply the right to a hearing to the extent that anyone wants to take an adverse action against a federal employee, the right to review.  So while you may not be able to build a perfect system, you can build around it a set of principles that protect people, a set of procedures that protect people and oversight to ensure that no funny business occurs. 

 

SEC. ENGLAND:  OK.  Thank you for being patient. 

 

Q:  Cindy Hilsinger (sp), 11th Wing, Communications Squadron.  I have worked for all four services and have gone through several different personnel systems.  One of the things I wanted to ask is how do you balance the responsibilities of pay banding, which groups several grades and steps together with that of improvement in education ‘cause many of our programs such as Scope Champion and some of the service colleges require a certain grade and step.  So how does the new employee know the way ahead in how to have a clear goal to improve, as you suggested?  If we’re all in the same pay band, how do you get those particular schools? 

 

SEC. ENGLAND:  Well, first of all, I hope you get it from your immediate supervisor.  But let me open it up to Ron or Mary? 

 

SANDERS:  Don’t be fearful of pay banding.  Pay banding is nothing more than a pay range.  The general schedule is a set of pay ranges.  If there happens to be 15 of them, grades 1 through 15.  But frankly, the distinctions between those grades are over five decades old and they’re obsolete.  So the distinctions you were talking about with pay banding are fairly self-evident.  For example, you might have in a particular occupation an entry developmental band – folks who in the trainee status. 

 

The young lady who’s an engineer, one of the advantages of a pay band, for example, is that it allows people to learn and progress and be paid according to their own pace.  Right now the general schedule assumes that every one of us learns in 12-month increments, right?  We got to wait 12 months for each grade promotion in your career ladder whether you learned it or not and whether you already knew it or not.  So the entry developmental ban typically groups folks who were in a trainee status, full performance is another band typically journey level.  And I think you can make those distinctions that you talked about – a crosswalk from the general schedule to a pay band is fairly easy and, in fact, as I said if you were to look at the statutory definitions in the general schedule, some of them are quite laughable.  They really do need to be modernized.  And to take things like individual competencies into account.

 

SEC. ENGLAND:  That answer you? 

 

Q:  [inaudible]  statement is how does one then get sent to those particular schools?  Right now, some of them, you have to be a GS-12 to a GS-13 to even apply for certain programs.  Well, if we don’t have those kinds of grade scales, how does one qualify?  I just want to make sure that the third graders don’t, you know, be trying to shoot baskets against the eighth grades because always the top people always get the top stuff and the people are just coming through won’t have a chance. 

 

SEC. ENGLAND:  No, that’s good.  Now, look, I think that’s a great input.  And again, we don’t have this system developed.  So I don’t know.  They may know the answer.  I don’t know the answer.  I think it’s a great input, though, ‘cause you’re right.  You can’t go have a third-grader playing against the eighth-graders, you’re going to lose every day, right.  So I think it was a good input.  You’re going to —all right.  Go ahead, Charlie.

 

ABELL:  Mr. Secretary, all of the services are involved in the effort with our program executive office here.  And one of the chores that they’ll have to do, as we develop the pay bans and the National Security Personnel System is a crosswalk back to their service regulations to see where those regulations will have to be modified to accommodate the non-GS1 through 15 system as you specified here.  We’ll also be developing, as the secretary said, the process is under which you and your supervisor will negotiate things like this and the service regulations will get modified in series to make sure that you can go to the schools that you and your supervisor agree advance you along the career path. 

 

SEC. ENGLAND:  OK, better.  Charlie, thank you.  Anything else? 

 

Q:  Good afternoon, sir.  Mark Adams (sp) from Chief Naval Operation Staff [inaudible] ’81. 

 

SEC. ENGLAND:  Hi, Mark.

 

Q:  How do you do?  The supervisor plays a very important role in this system.  When we have a military supervisor, what classification kind of member is that military supervisor at NSPS, because they’re not civilian?  So what…

 

ENGLAND:  No, but they have to be well-trained. 

 

Q:  Absolutely, but…

 

ENGLAND:  Well, you’re right. 

 

Q:  … yeah.  And their notions of -- like on the officer rating side, however their profiles or what elements of this does this military supervisor play in this whole…

 

ENGLAND:  Well, you have military – just like we do today, but just like all our supervisors.  And this program is going to be what I call steeped in knowledge.  Look, I think this is a terrific aspect of this.  This forces the department to train supervisors and managers, right?  I mean, they have to be able to manage the human capital resources, not just the capital, the human capital resource.  As an integral part of their job, my hope and expectation is, Mark, that part of their evaluation is how well they do these jobs and that includes the military people and the civilian people, right.  I mean, if you link this together appropriately, we end up with a system that’s much better attuned to our employees.  Because today we don’t do all that kind of training.  I mean, you get to be a supervisor and you’re a supervisor.  And people sort of do work for you, right?  I mean, people don’t spend a large part of their time in managing the human resources.  This system will help us put a better system in place and I think provide a better environment, I hope -- my expectation – we provide a better environment for people to excel. 

 

Look, I will tell you – well, I’ll tell you what I tell the admirals and the generals like you is I tell them their first responsibility.  People talk about what your responsibility is, right, as admirals or generals or colonels.  But their primary response is to provide an environment for every one of their people to excel.  You provide the right environment – I don’t care if it’s military or if it’s civilian, people will accomplish great things and get great job satisfaction out of what they do everyday.  That’s what this is about – great job satisfaction, like everybody go home every night and you brag about the great job they accomplished that day.  That’s what we’re trying to accomplish.  So, look, they had to be training.  Training’s an integral part of this and we will have a training program for those Folks.  Thanks for question.

 

Now someone in the back there. 

 

Q:  I work for the Department of the Army here in the Pentagon.  In reference to your comment on changing the service regulations policies and procedures, do you have a commitment from Congress to change what laws necessary to be changed for you to implement this.  And if you don’t what chance of success do you think you’ll have? 

 

UNKNOWN:  I think the commitment from Congress was on the front end, the legislation that Secretary England referred to actually gives the authority to the secretary of defense and director of the OPM to waive or modify six or seven chapters of Title 5 U.S. Code, the law that currently governs the civil service system.  So the authority is already in place to replace those statutory chapters with jointly issued regulations by OPM and DoD.  

 

ENGLAND:  OK.  Yes. 

 

Q:  What do you think it’s going to cost to implement this change?  What’s it going to cost the taxpayers?

 

ENGLAND:  Well, I think it’s primarily one of training and…

 

Q:  Dollar wise estimation.

 

ENGLAND:  Gosh, I don’t know.  I guess to train all these supervisors.  But I would expect that it’s primarily a training cost and it’s a cost that we should be doing today.  So in my view, I don’t believe it’s going to cost us.  I actually believe it’s going to save us.  I think we will have a system that we are actually dealing with the jobs that specifically need to be done because we will – again, you have to sit down and talk to people.  What you want to accomplish.  So my judgment is going to save us.  I mean, we will have a much more effective workforce than we’ve had in the past.  And effectiveness is efficiency.  So we will have a more effective workforce and I think a workforce that will be more productive just because they like the environment they’re working in.  I mean, the better you can provide this environment, I think the greater your level of efficiency.  So we will have some costs.  Primarily, it’s going to be, in my judgment, training costs ‘cause you have to train them.  Those people should be trained to do these jobs whether we do NSPS or not.  But NSPS will help us make this job better. 

 

OK.

 

Q:  [inaudible] I was wondering if there is a projection for…

 

ENGLAND:  How about a mike in here, so people who are tied in by satellite here can hear also?

 

Q:  Hi, sir.  I was wondering if there was any kind of a reduction in force associated with implementing this system? 

 

ENGLAND:  No.  I believe it’ll be the other way.  Again today we have a lot of military people doing civilian jobs.  The fact is we’re going through a process of mil-to-civilian transfer.  Right now, we’re doing that.  I know we are in my department, we’re physically – because one way of growing the military is have civilians do jobs that the military is doing today and have the military do jobs that only the military can do.  See, in the past, military was pulled in to do all sort of jobs because it was flexible, easy – go get the military people to do the job. 

 

So I expect what will – and by the way, we did a lot of outsourcing – A76 outsourcing.  Now why do people do outsourcing?  We didn’t just decide, gee, I think I’ll do outsourcing.  I mean, people decide they could do better outsourcing than they could do internally.  Now if we can do better internally, and have a much better workforce, and a more responsive workforce, I expect that we will have, you know, more jobs, not less jobs, but more jobs.  So if we do this right, we have a highly skilled, highly motivated workforce with some flexibility, you know, the kind of flexibility we need to deal with the issues of the times and we will be more responsive.  So instead of just automatically looking outside, you will immediately look inside to get the job done.  So we do this right, it should enhance employment for our federal workers and the DoD.  And I think that’s – any comments?  Right? 

 

UNKNOWN:  Exactly right.

 

SEC. ENGLAND:  Right.  I mean today we’re actually expanding that, right? 

 

Q:  Thank you.  Mr. Secretary, perhaps this is better, sir, for Ms. Lacey.  I’m just coming back into the Navy, in effect, as a contractor after a 22-year career and then eight years in corporate HR.  Is there any effort at all or dedicated effort being spent to looking out – almost as a headhunter – to find out if there are people out there and there are – who have military background who may have been part and experience some of a lot of this cumbersome process, who have a different perspective right now and have more to potentially add to the mix?

 

LACEY:  Excellent question.  And I appreciate you identifying yourself. 

 

Q:  [Laughter] 

 

LACEY:  Each of the services in the components has identified a program manager.  Some of them are here with us today.  And their job is to reach out and touch, within their organizations and find folks that not only have a body of expertise that will be useful for us to know about, but are also willing to tell us about it, share with us and engage in discussions.  So some of that information is on our Web site where you can contact the – who to contact and we’re looking for information, so thanks for the input.

 

SEC. ENGLAND:  Have we gotten any other inputs our of our telecast or webs or anything, sort of direct feed in to respond today?  OK, I guess not.  OK.  I just want to make sure in case somebody was out there trying to get in that we were being responsive to our larger audience and not just the audience here today, because this is literally worldwide today.  In Hawaii it’s about 8 o’clock in the morning.  If you wish you were in Hawaii, it’s just after breakfast in Hawaii, which is one of the times we’ve set, so we could cover most of our people around the world today. 

 

OK. Anything else?  Yeah. 

 

Q:  I’m Byron Charlton (sp), Secretary England with the National AFL-CIO.  Of course, we’re always concerned when we hear the term “collaborative process.”  What does that mean when you say a collaborative process, but not negotiated to an answer?  I think that was your quote?

 

SEC. ENGLAND:  Yeah, right.  That’s my quote.  OK.  It’s that your question?

 

Q:  Well, before you answer it, I just like to say collaborative process can mean many things to many people when we say negotiated to an answer.  How do you protect -- if not negotiate into an answer – how do you protect those employees who have served for years of meritorious service when you start to make change in transition.  Is there going to be a subjective process where their due process rights are negated? 

 

SEC. ENGLAND:  OK.  First of all the merit system protections are all still there, so none of that changes.  All that that’s been negotiated in the past is there.  We’re not changing any of that.  We will get – look, we have 700,000 people – 6[00,000] to 700,000.  We’re not going to be able to negotiate with everybody.  Everybody’s in – some people are in unions.  Most people aren’t.  So you can’t have a negotiate with every single person.  So what we’re doing is – I mean, this is going to be fair and equitable across the board.  I mean, every employee represented or not, no matter how small or large the union is, have an opportunity to provide their views and inputs.  And they can provide their view and input and we will try to construct a system that best satisfies all the employees in the Department of Defense. 

 

Now I will tell you, there’s no way that you can satisfy everybody’s desire, right?  So I mean, there are some objectives we have.  I mean, the Congress gave us some objectives.  I mean, we want a system that’s best attuned to the mission, the unique mission we have – protect and defend America.  So first, we have to make sure we do this mission for America.  That’s why we’re here.  If we don’t do that mission, we’re not doing the job.  So the Congress has laid out how they want this to operate.  And we will have mechanisms for people to provide us input.  We’ll have mechanisms for people to discuss.  What I would ask is that people take us upon this in good faith.  I mean work with us to provide mechanisms so we can better understand the needs of the workforce. 

 

At the end of the day, we have one objective and that is to have a great workforce to do a great job for America.  So if everybody has that objective, I mean, this is not going to be hard.  But you can’t – look, you can’t negotiate across 700,000 people.  I mean, at the end of the day, somebody has to sit down and actually make some decisions.  So we will sit down and make some decisions, but we will do that trying to satisfy the needs of as large of the population as we can of our workforce. 

 

Now by the way, maybe some things have to be modified in some areas.  I mean, I will tell you it’s a large country, lots of culture, lots of differences.  Maybe some things we tailor places.  Still to be decided.  I mean, it may not be that, you know, every single thing fits everybody.  But give us the input, so we can understand this and put together the best system we can.  Again, I do believe we have this common objective, whether you’re civilian or military, we have this common objective. 

 

OK, probably time for one last question out there.  If anybody has a burning issue. 

 

Yes, sir?

 

Q:  Mr. Secretary.

 

[Cross Talk]

 

Q:  Sorry? 

 

ENGLAND:  Yeah.  Probably has to be reasonably quick here.

 

Q:  It will be. 

 

ENGLAND:  OK. 

 

Q:  Steve Lankar (sp) for the National Association of Government Employees.  Over the next couple months, the focus groups and the working groups, how transparent will that process be in terms of what information you take in from the DoD workforce and will that be shared with the workforce? 

 

ENGLAND:  I think it’s very transparent.  Let me tell you, every way we can, you will find us being as open in a transparent process as we can make it.  So certainly, I mean, all the focus groups, the objective is to get input, so this is about as open as you can.  There’ll be forums for people to provide input, under facilitators, right, professional people to help facilitate all that for us.  Our working groups will – I mean, they have to work.  I mean, they can’t have everybody in a working group, so the working groups will end up with alternatives.  But we will make this as open a process as we can so people can see what’s going on.  Next few months, is really what that’s all about is how the focus groups and all these groups working together.  So it’ll be focus groups, working groups, broad regulations, detail implementation.  That’s sort of the flow that’s going to be going on between now and next July.  And the regulation point, hopefully, it’s about the end of this year, but you know, again it’s not schedule-driven, but I hope it’s about then, Steve.  So look, I appreciate your inquiring and also appreciate your support.

 

           OK.  Listen, I believe our time is up.  The fact is, the cameras are probably gone off.  I want to thank you.  First of all, I thank you for what you’re doing today every day.  I thank you for what you’re doing for America.  Without it, I mean, we would never be able to win this war on terror without our great civilians and our great military.  Thanks for what you’re doing for America and thanks for helping us with this system.  God bless you all.  Thank you.

 

[Applause.]