NSPS pay raise cheat sheet


If you’re one of the 187,000 employees under the Defense Department’s performance-based pay system, figuring out how much your raise is going to be next year is sort of like doing your taxes — only worse. There’s no Turbo Tax equivalent for the National Security Personnel System.

Luckily (we think), the helpful folks at the Pentagon have just come out with a fact sheet that attempts to bring clarity to the complex pay formula that’s used to determine raises.

The raise is divided into three parts: an general salary increase, which is equal to 60 percent of the across-the-board pay raise provided to federal employees under the General Schedule; a local market supplement, which is equal to the GS locality pay rates; and a performance-based payout, which can be added on to base salary, paid as a bonus or some combination of the two.

For 2009, the General Schedule across-the-board pay raise is 2.9 percent, so NSPS employees who receive a performance rating of 2 or higher (out of 5 levels) will receive 60 percent of that total as a general salary increase. That amounts to 1.74 percent.

Still with us? Next, add to that the locality portion, which ranges from 0.49 percent in the Raleigh-Durham area of North Carolina and 0.62 percent in the rest of U.S. locality zone to 1.41 percent in San Francisco and 1.88 percent in the Washington-Baltimore metro area.

OK, here’s where the fun really begins. The final piece of the NSPS trilogy is the performance-based component, which is paid to employees who earn a performance rating of 3 or higher. The actual amount depends on the rating level earned, the amount of shares each employee receives and the dollar value of each share. The Defense Department hasn’t announced how much each share will be for 2009, so coming up with actual performance increases is impossible right now.

However, the Pentagon issued a theoretical example of how the raise could play out for an employee in the Washington area who earns a rating of 3, or valued performer, which is the most common given. Under this scenario, the employee would receive a 6.3 percent pay raise in January, in addition to a cash bonus of $1,080. That’s far above the 4.78 percent pay raise GS employees in the Washington area will receive.

Still, we can’t help but wonder whether there are NSPS employees out there who would trade a couple thousand dollars a year in potential salary and bonuses for the assurance of getting the same raise as every other federal employee — without the numbers-crunching headaches.


About Author

No Comments

  1. Pingback: Federal news, government operations, agency management, pay …

  2. While the NSPS pay raise may be larger than the GS, what is forgotten and not addressed is the lack of step increases for NSPS employees. That same Wash DC GS employee who goes from a Step 2 to a Step 3 this year will receive an additional increase in salary of 3.2 percent bringing their total pay raise to 7.98% and more importantly it is factored into their retirement. While the NSPS employee receives no step increase and the bonus is not factored into their retirement as well.

  3. This sounds great too a US Postal Service Manager like myself. The only thing we have a chance at receiving is an annual merit. This has amounted to about 3% of our salary lately. Our powers too be agreed years ago to eliminate COLA and Locality pay, and then they wonder why their employees are running for the hills to other agencies. What a joke!!!!!!!!

  4. Mr. Kaufman
    It appears that someone continues to pull the wool over your eyes. The 2.9 percent raise as you put it for General schedule employees each year which does vary is a cost of living adjustment not a pay raise. All general schedule employees recieve their raises in the way of STEP increases througout the year as their time in service increases. The comparison of NSPS pay increase to the GS cost of living allowance continues to fool everyone into thinking the new sysem is fair. I can assure you it is not and only intended as an overal cost savings tactic by the government.

  5. What most people need to understand is that you will NEVER get the potential. The money for all employees in an organization comes from the same ‘pot’ of money. The UPPER managers will change the performance ratings of their employees if the ‘pot’ of money gets too low so they can get what they want. I have already witnessed this myself. You will definitely lose money. The government is not spending all this time and resources in this if it does not save THEM money. It is not for the employee to benefit – it is for them. Do NOT listen to the potential hype. The money will never be there for the potential to ever be reached…. What they also fail to mention is they can even take away from your salary. How many people have voluntarily been told that one yet? Probably not many….


  6. Alas, they have confused you as well.

    The sequence of calculation is 1) take your current base salary (not counting locality pay), 2) add 60% of the approved General Pay Increase of 2.9% (3.9% less 1% for the Pay Pool; that’s the “NSPS Rate Range Adjustment”) — that gives you your New Base Salary, then 3) add the NSPS Pay Band Adjustment or the “Performance Salary Increase” generously granted by the Pay Pool (The other 40% of the General Pay Increase went into the Pay Pool, from which it’s doubtful you’ll see all, if any of it back. No, Virginia, the supervisor — or the supervisor’s supervisor — no longer control what the employee gets, and with the exception of the supervisor’s supervisor or the supervisor’s supervisor’s supervisor who’s in the Pay Pool, none of those folks have a clue as to what the employee does or why that’s at all important.) But I digress. We’ve added the “performance salary increase” to the old base salary plus the 60% of the 2.9%. ONLY THEN, 4) do we factor in the “New Local Market Supplement” (which is the old locality pay plus the 1% they took off the 3.9% General Pay Increase up above). Now you have your “New Total Salary.” It’s not clear how that could possibly come out to 6.3%, but, unfortunately, I don’t have a 5th Grade math whiz to explain it any more clearly.

    Of course, you may also have a cash bonus (which somehow also comes out of the 40% of the General Pay Increase — less local market supplement — that went into the Pay Pool kitty). Please don’t ask how the “performance salary increase” and the cash bonus are figured, because that’s now done completely automatically by a new Enhanced Workbench Tool — that nobody outside the Pay Pools have seen before and nobody understands how it works.

    Seriously!! This is not a Late Night comedy routine. It’s a beta test with real money!

  7. The DoD agency I was in last year just completed their first rating year under NSPS. No one that I know was happy with their pay out. I heard rumors filtering out from conversations between first line supervisors and chiefs that the pay pool ratings were scewed too much and centered around the 4’s and not the 3’s as is desired using the modeled NSPS normal curve. Because of that, pay pool ratings were required to be “revisited” to fit more of a normal curve with a mean of 3. I am not surprised since there was a similar outcome for the chiefs mock pay pool the year before – most ratings were clustered around the 4’s and there were even multiple 5’s.

    I have left that DoD agency and moved to another DoD agency with a union. Boy, am I glad I did. We federal employees are not stupid. We know when something doesn’t quite smell right. When I had emailed my former DoD agency NSPS representative about another NSPS issue that followed me to my new place of work, he agreed with my statement that NSPS is causing the loss of “valued employees”. He said that “we have noted all the folks that are abandoning ship”.

    Thanks for nothing, Rumsfeld.

Reply To capri_50 Cancel Reply