NOAA Workforce Management Office

Serving NOAA's Most Valuable Asset - People

NOAA Supervisory Resource Guide

What is the DOC Alternative Personnel System (CAPS)?

Typical Scenario: You have heard of the NOAA Demo, Pay Banding Project, or Alternative Personnel System and want to understand what it is, the human capital management flexibilities it offers, and how it differs from the General Schedule system.

Principle: The DOC Alternative Personnel System was implemented as a Demonstration Project on March 29, 1998, and was authorized by the Office of Personnel Management (OPM) for an initial five year period. The DOC Demonstration Project was designed to test Human Resources Management innovations adopted from previous Federal personnel management demonstration projects to determine whether or not these innovations could be successful within the Department, and in particular NOAA. In 2002, the Department requested OPM approval to extend the expiration date of its demonstration project and to expand the number of participants covered. OPM granted the request and extended the DOC Demonstration Project for an additional 5 years until March 2008. OPM also permitted the Department to expand coverage to additional organizations and to increase the number of participants up to the legal maximum of 5,000. The purpose for extending the Project was to complete the validation of the major innovations, and to implement and evaluate any modifications resulting from any evaluation recommendations. In 2004 and 2005, OPM received authority for an additional expansion of the DOC Demonstration Project through legislation which permitted the Department to add up to 3,500 additional NOAA employees, increasing the total number of NOAA employees to 6,925, as well as expanding the Project to include additional NOAA organizations and locations. Within NOAA, components of OAR, NMFS, NESDIS, OMAO, NOS, NWS, OCAO, OCFO, PAE, PPI, USEC and WFMO are participating. With the passage of the FY 2008 Omnibus Appropriations Act, the Demonstration Project was extended indefinitely with allowances to expand participation to more than the limits set during the Demonstration Project period. With the indefinite extension, the Project is now referred to as an Alternative Personnel System.

Overall Objectives: The purpose of the DOC Alternative Personnel System is to strengthen the contribution of human resources management in supporting the missions of specific operating units of the Department. To accomplish this goal, certain changes in human resources management systems were introduced to include: greater delegation of human resources management authority to line managers; simplifying the position classification system for greater flexibility; establishing a pay-for-performance management and rewards system that will improve individual and organizational performance; offering greater pay setting flexibility; improving recruiting and examining to attract highly qualified candidates; and getting new hires onboard faster.

Rules and Flexibilities: The Demonstration Project provided a means for testing and introducing beneficial change in Government-wide human resource management systems. Authority was gained by the Department from OPM to waive existing Federal human resources management law and regulations in order to propose, develop, test, and evaluate a human resources management system that could shape the future of human capital management in DOC.

No waivers of law are permitted in areas of employee leave, employee benefits, equal employment opportunity, political activity, merit system principles, or for prohibited personnel practices. However, examples of laws and regulations that have been waived under the Alternative Personnel System include:

• qualification requirements, recruitment, and appointment to positions;
• classification and compensation;
• assignment, reassignment, or promotions; or
• providing incentives within the performance management system.

Legal requirements for the scope of demonstration projects are that:

• the length of the project be no more than 5 years (with some extension permitted);
• there be no more than 5,000 employees per project;
• there be consultation with affected employees and unions;
• the Department submit a formal project plan; and
• annual evaluations be conducted.

Now that the project has been extended indefinitely as a Commerce Alternative Personnel System the following applies:

• No new additional waivers of personnel law are allowed;
• Commerces Alternative Personnel System is subject to review as part of the OPM Center for Merit System Accountability Audit Program which studies the human resources management systems of agencies to ensure merit system principles are protected, and the systems support mission accomplishment;
• Annual evaluations are no longer required by the Office of Personnel Management; and
• Minor procedural modifications and additional employee expansions can be made.

Major Differences Between the General Schedule (GS) and the Alternative Personnel System

• General Pay Increases, Locality and Special Rates - All DOC employees covered by the Commerce Alternative Personnel System with an Eligible rating will continue to receive the annual pay adjustment, locality pay, and special rate increases. The minimum and maximum rates of each pay band will be adjusted to reflect these increases.
• Within-Grade or Step Increases - The Commerce Alternative Personnel System replaces grades and steps with broad pay bands. Therefore, within-grade increases will no longer apply. However, under the pay-for-performance system, employees will be eligible for annual performance pay increases within the broad pay bands, and they may also receive performance bonuses.
• Broad Bands and Pay Progression - Progression through a pay band in the Alternative Personnel Sytem is accomplished through annual performance pay increases. By removing the pay barriers between the GS grades that are placed in the same band, high-performing employees may earn higher salaries than they would under the current system. For example, banding of clerical grades GS-7 and GS-8 within the Clerical and Support Career Path, ZS-IV pay band will allow employees who would have reached the top of the GS-7 grade level to have access to the GS-8 pay range.
• Supervisory Pay Differential - Supervisory performance pay provides an incentive for supervisors by increasing the pay potential of high-performing supervisors up to six percent beyond the normal pay cap. Supervisory performance pay is earned through annual incentive increases to base pay using the pay-for-performance system.
• Pay Flexibility - While managers have flexibility to set pay upon appointment to a position or a promotion, certain limits do apply. Be sure to consult your HR servicing specialist to ensure that the pay you would like to offer is within the regulatory limits. Still, this pay setting flexibility provides managers with a valuable tool to be more competitive in recruitment and retention of employees.

How does the role of supervisors and employees change in the performance appraisal process? The pay-for-performance system requires greater interaction between supervisors and employees. Under the Alternative Personnel System, the employee, supervisor, and pay pool manager will all be involved in the development of the performance plan. The supervisor will be expected to play a greater role in coaching employees and will be required to conduct a formal mid-year review with the employee. Employees will be required to provide their supervisor with a list of accomplishments at the end of the rating cycle. The supervisor reviews the list of accomplishments with the employee and uses it to help determine the employee’s rating, score, and resultant performance-based incentive pay increase and/or bonus. Supervisors will be required to recommend and justify performance appraisal recommendations to pay pool managers who have the final authority to approve ratings, scores, incentive pay increases and bonuses within their pay pools.

How are supervisors able to assume the additional tasks required under the Alternative Personnel System? The Alternative Personnel System seeks to improve the supervisor’s ability to effectively manage human resources by increasing delegated authorities, simplifying and streamlining processes and procedures, and providing greater flexibilities in decision making. Some functions, such as position classification and staffing, will require less time, whereas performance management will require more time. Evaluation results through the 7th year of the Demonstration Project show that supervisors typically find the simplified position classification system and the greater pay setting flexibility to be a welcome relief from the traditional processes thereby enhancing the achievement of organizational goals and overall mission. Even so, some Alternative Personnel System supervisors have had the need to balance the amount of time spent on technical versus supervisory tasks. For example, in the beginning, they found it desirable to delegate some technical tasks to subordinate employees on a short-term basis as they become familiar with Commerce Alternative Personnel System procedures and processes.

The Workforce Management (WFM) Office offers training for supervisors on a quarterly basis in Silver Spring, Maryland and Seattle, Washington which is a comprehensive overview of the Project’s authorities, organization, concepts, principles, procedures and automated systems.

The training schedule can be viewed at the WFM website. Alternative Personnel System training is also provided by other WFM Offices as well. Check with your Servicing Workforce Management Office representative.

Employee and Management Reaction to the Alternative Personnel System

Based upon surveys conducted each year, increasingly greater numbers of employees and managers favor participation in the Alternative Personnel System. However, there is an ongoing need to continue providing information to employees and supervisors to increase their understanding of the policies and processes associated with the innovations. Overall, Alternative Personnel System employees and managers, when compared to employees and managers outside the Alternative Personnel System, prefer the position classification, pay setting and pay-for-performance programs over those of the traditional GS system.

Evaluation

OPM required annual evaluations of the Demonstration Project to determine if it was: implemented and operated properly, accomplishing intended goals and purposes, cost effective, not adversely impacting veterans or any employee groups, adhering to merit principles, avoiding prohibited personnel practices, and whether or not the project or portions of the project can be generalized to other Federal agencies. Through year seven, the annual evaluations of the Demonstration Project have concluded that the Project was successfully implemented and operated in terms of the above criteria. Now that the Demonstration Project has been indefinitely extended, annual evaluations are no longer required by OPM. Commerce�s Alternative Personnel System is subject to review as part of the OPM Center for Merit System Accountability Audit Program which studies the human resources management systems of agencies to ensure merit system principles are protected, and the systems support mission accomplishment.

Information Resources: DOC Alternative Personnel System

Page last edited: February 14, 2012

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