CLASSIFIED ANNEX HUMAN RESOURCES MODERNIZATION & COMPENSATION TASK FORCE REPORT ON THE PROPOSED PERSONNEL AND COMPENSATION SYSTEM FOR THE CENTRAL INTELLIGENCE AGENCY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88-01192R000100130001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 27, 2016
• Document Release Date: November 21, 2012
• Sequence Number: 1
• Publication Date: June 25, 1987
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2012/11/21: CIA-RDP88-01192R000100130001-9
CLLSSIFIED ANNEX
FItIHNN RF.'SOtIFCES AWERNIZATION & COMPENSATION TASK FVRCE
REPO~T ON IME
PROPOSED PERSONNEL AND COMPENSATION SYSTEM
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There are, in general, two types of costs associated with each of the 16
features in the proposed personnel and compensation system. The first, is the
startup costs required to develop and initially implement the system feature.
The second, is the ongoing or annual cost to provide the improvements offered
by the system feature. The projected costs of each system feature for FY 1988
through FY 1992 are summarized below. In addition to the costs shown in this
summary, the Office of Personnel, the Office of Finance and the Office of
Information Technology have undertaken a long-term project to upgrade and
consolidate the personnel and payroll system. This multiyear project,
estimated to cost between $10 million and $20 million, has been undertaken
independent of this effort. This major upgrade of the personnel and payroll
systems should accommodate the features that we have proposed in this report.
(Dollars in Thousands)
Cost of conversion to occupationally FY88 FY89 FY90 FY91 FY92
defined bands (prorated steps) 2,500 3,500 2,700 --
The actual costs of administering the proposed system are assumed to be
the same as those under GS. In converting the Agency to occupationally
defined bands, however, we propose that employees be paid for the pro rata
share of their next step increase. These costs would have been incurred
anyway as permanent step increases over a three year period in the (. It was
decided that an upfront cash payment of the pro rata step amount would have
the benefit of holding down long-term payroll costs while being equitable to
employees.
In the proposed approach, costs for payment of the pro rata step increase
would be spread over approximate1 three years on the basis of anticipated
conversion of approximately employees in FY 1988 to the new system, with
the remaining population to be converted over the following two years.
(Dollars in Thousands)
Implementation of the incentive FY88 FY89 FY90 FY91 FY92
pay program. 4,200 10,000 16,500 17,500 17,500
A major cnent of the proposed system is an incentive pay-Program
that would be designed to recognize and reward current performaried with`-iv
increases in base pay and with cash performance bonuses.
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Costs for this feature of the proposed system are postulated on the
assumption that approximately 50 percent of the population would be eligible
for an incentive award greater than current GS in-steps, and that all
employees performing at a fully satisfactory level or better would do at least
as well as under the GS.
Cost pro'ections for the performance award system assume that
approximately employees would be converted in FY 1988. The remainder of
the Agency tion would be placed in the new system over the next two
fiscal years.
Total Population Incentive Pay Costs
Cost computations for full population projected as follows:
1 2
(million $)
Operating Assumptions
New system salary costs
19
19.4
-Constant population
level
Bonus cost
19.3
20
-Attrition/EADs at
FY 1986 levels
Less expected GS costs
20.5
20.3
-Promotion=10 percent
or range minimum
Less SA/QSI costs
1.5
1.5
Net total population
16.5
17.6
FEAT[ E5 3 and 4-P
I
APPRAISAL SYSTEM DESIGN AND ft:
(Dollars in Thousands)
FY88 FY89 FY90 FY91 FY92
Consulting services 35 15 15
To develop a modified performance appraisal system it will be necessary
to engage the services of external contractors who are experts in the field.
These experts would provide advice and direction, review and comment on work
completed at the direction of the Task Force, and participate in the
development of administrative and implementation procedures. System design
and development costs for FY 1989 are estimated to be 35K. In FY 1989 and FY
1990 consultants would be used for advice and guidance regarding system
maintenaioe and modification.
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Automation support
(Dollars in Thousands)
FY88 FY89 FY90 FY91 FY92
150 -- -- -- --
Each employee would receive an occupation-specific career handbook
outlining the career development, training, performance management, and pay
administration procedures relevant to that occupation. Recruiters, human
resource planners, and career counselors would use the books as reference
guides to identify Agency skills needs. Career handbooks also would be made
accessible via CRT with the goal of gradually reducing the number of printed
handbooks as more employees gain terminal access. The initial costs for
printing these books should be' within the P&PD annual budget and updates would
be in looseleaf form to minimize updating cost.
Career advancement would be predicated on growth in skills outlined in
the career handbooks. Annually, supervisors would evaluate employees on
skills proficiencies using an automated procedure that would cost $150,000 in
FY 1988 for developmental and employee training costs.
(Dollars in Thousands)
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TRABW G IN D4PL4 DG SYS1D4 FY88 FY89 FY90 FY91 FY92'
FEATtTit 1 - 6
Training for managers would consist of: one-day sessions in groups
of 25. Approximately Agency managers (Headquarters, domestic, and
overseas) would be tr
ai .
Briefing for Headquarters employees in each of the occupational
categories would consist of half-day sessions in groups of 50 to 150, with 70
as the average size.
To brief ~ employees at Headquarters,
would take two teams each about 13 weeks.
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Additional information about the new system would
through the Learning Centers.
Costs spread out over two years are:
?
Contractors
150K
?
Travel Per Diem
3508
?
Training Materials
5R
?
Facilities
35K
PERT= 7--00XWATIQI SjxiC TRAIIW1G:
Occupational training
(Dollars in Thousands)
FY88 FY89 FY90 FY91 FY92
----- 2,000 2,000 2,000 2,000
Until the training profiles are identified by the occupational Panels,
precise dollar estimates for increased training under the new system can not
be clearly defined. As an illustration, however, if-training were increased
by 20.percent for each occupational group and implementation were spread out
over three to five years, the additional dollar costs for internal OTE
training could.be~estimated at $2 million per year.
Training Improvements
(Dollars in Thousands)
FY88 FY89 FY90 FY91 FY92
-- 1,500 1,500 1,500 1,500
Under the proposed system, the availability of training would be expanded
to provide our dispersed and mobile work force with a variety of self-study
packages ..that could, for example, be taken home and played on he& ..VCRs or
computers. More material would be delivered by computer-based instructional
programs,,, core `.
ondence courses, internally televised onurs~V,;t'ds~:w~l:l.
c oursses - tit by traveling teams. The estimated annual cyst of `this feature
is $1.5 million.
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Within budgetary constraints, senior managers will have the flexibility
to place employees into the expert track. There are no direct additional
costs associated with expanding opportunities for expert. However, there
would be additional costs associated with incentive programs that are proposed
for managers and experts through the SIS level.
(Dollars in Thousands)
Management-Expert incentives FY88 FY89 FY90 FY91 FY92
1,300 3,000 3,100 3,200 3,300
A Management-Pert Incentive Program (MEIP) has been structured that
would permit participants to be awarded an additional bonus that, when
combined with the normal incentive bonus, could be as much as 15 percent of
base pay for those managers and experts who demonstrate the greatest
proficiency. This program is budgeted at a fixied amount. This amount will
drive the size and number of awards that could be made. Fbr the purpose of
ing cost estimates, it was assumed that there would be approximately
personal services growth.
this population was assumed to be superior or outstanding, and would be
eligible for combined regular and MEIP incentives averaging 8 to 10 percent.
Cost projections for this program assume a phase in of the program over
two years, with the costs to grow at a rate not to exceed the rate of Agency
program participants with an average salary of $60,000. Fifty percent
SIS bonus program
(Dollars Intiousanlds) _ w..
FY88 FY89 FY90 FY91 FY92
1,750 1,750 1,960 2,020 2,080
The proposed bonus distribution plan is designed to bring the Agency more
closely into alignment with private-sector executive compensation practices.
We propose to extend bonus eligibility of'our SIS population to recognize a
larger number of superior performers by expanding the bonus pool from 3
percent of SIS payroll to 4 or 5 percent. This is in accordance with a
recommendations that the SES Advisory Board is going to make to the Director
of CFM. The average value and maximum value of SIS bonuses are assumed to be
the same as today.
FEATURE 1O -Pj:
j -ter
We do not anticipate a significant change in the total number or cost of
promotions under the proposed system.
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(Dollars in Thousands)
Flexible benefits FY88 FY89 FY90 FY91 FY92
development and implementation 950 140 14Q 140 140
This initiative would allow introduction of a flexible benefits program
by FY 1990. Open season for this program would coincide with the normal
benefits open season in November of 1989. The major cost of a flexible
benefits plan is the cost of the benefits provided, however, such a plan could
be designed to develop any desired cost level.- This..budget initiative assumes
that,, except for the additional"costs of.. developmentaind _imPlem.on, no
new funds would be required in FY 1988 and-FY'1989 for Benefits'1XCA
Contributions (900=1,210). This initiative addresses only. the
developing and implementing a new flexible benefits 'program.
Costs for FY 1988 include:
? 150K for new enrollment software.
? 300K for claims-processing software modifications.
? 100K for payroll system modifications.
? 150K for 30-percent software margin.
0 50K for approximately 200 hours-of consultant time.
? 200K for first-year communications expenses.
Costs for FY 1989 and outyears include:
40K for software modifications 'and -maintenance.
? 50K for miscellaneous administrative costs.
? 50K for ongoing coamunications activities.
FEAT[TRE 12--R TI1 TOOLS:
(Dollars in Thousands)
Increase carryover limits FY88 FY89 FY90 FY91 FY92
and leave conversion for.non-SIS 2,700 2,700 2,700 2,700 2,700
officers
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This initiative provides four options to the current annual leave program:
? Increased annual leave carryover limits for non-SIS officers.
The additional cost is $300K per year.
? Leave in excess of the individual leave carryover limit, that other-
wise would be forfeited due to exigencies of the service, would be
converted to its cash value. On the basis of past forfeiture levels,
the additional cost per year is estimated to be $2,400K.
? SIS officers would be allowed to convert annual leave balances over
500 hours to its cash value. This option results in long-term
savings to the CIA by paying out accrued leave balances in
current-year dollars instead of end-of-career dollars.
? Conversion of excess annual leave to individual sick leave or sick
leave bank. This option results in no cash outlays by the CIA.
(Dollars in Thousands)
CIA-sponsored guaranteed loans FY88 FY89 FY90 FY91 FY92
500 500 500 500 500
This feature provides a means for providing educational assistance to the
children of CIA employees. The recommended option is a CIA-sponsored
Guaranteed Student Loan Program. Cost estimates are on an average loan value
of $3,,000 per year, 85 loans per month, and a 10-percent default rate.
FEATURE 14--W= YO~ICB OM OM
Retention bonuses Bonuses could range from $2,000
to $10,000 per year per person.
Early retirement options
Actual costs would be contingent
on the frequency with which the
options are used. However, using
a hypothetical case to develop
rough order of magnitude costs we
estimate that each ivdividual who
selects an early retirement option
would cost CIA approximately' `
$1.25,000.
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This feature establishes a number of tools for managing organizational
turnover and dissatisfaction. The first is a retention bonus program aimed at
retaining key individuals in critical high-turnover occupations. The second
is a series of three special retirement provisions:
? Early retirement for certain SIS officers.
FFATM is-- d-,teas`
? Early retirement for selected key people in expert positions.
? Unreduced benefits for those involuntarily or optionally retired
under reductions in force.
.(Dollars in Th
Salary administration support FY88 FY89 FY90 FY91 FY92
200 100 --
To enable managers to..effectively'allocate incentive pay to eoployees
under their control, automated support is -required to identify the population
within the incentive pool and to ensure that projected inontivepay
distributions are within the allocated:fNlev'els. Ekternal contractor
support would be required to develop the software that would be needed for
this system. System specifications would be developed by the Office of
Personnel based on the design features for the system developed by the Task
Force and approved by Agency management. Current Agency hardware would be
used for the system. This design and implementation effort would require
approximately two man years of contractor support.
(Dollars in Thousands)
Salary schedule maintenance FY88 FY89 FY90 FY91 FY92
-- 50 -- 50
On a periodic basis, the Office of Personnel would review the Agency
salary structure to determine its currency with the market. Tb support this
effort, external contractor support would'be required to develop the necessary
market, information that would be used to recommend salary structure-
adjustments to Agency management. OP personnel would be used"toaccomplish
the Agency portion of the biannual reviews.
pwam '1f--PIMECT '1O S:
Diagnostic cost models
(Dollars in Thousands)
FY88 FY89 FY90 FY91 FY92?
150 ?100 100
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The projection of personnel costs in the new pay system is based on
assumptions that must be revalidated periodically. If not, personal service
costs might escalate out of control.
A computer model has been developed that anticipates personal service
costs based on a series of assumptions. Additional cony ter modeling tools
would need to be developed for senior management to use in the planning and
budgeting process. The tools also would enable the line manager to project
future salary costs based on actual data on within level increases, promotion
rates, and cash awards.
?ne model would be required that would assist the line managers in
understanding the dynamics of the new pay system. The model.:be able to
isolate individual organization components and accept the actual data from the
new pay system and project new personnel costs based on actual data on head
count, attrition data, DOD, and separations.
(Dollars in Thousands)
Succession and assignment planning FY88 FY89 FY90 FY91 FY92
-- 2,000 1,200 --
The Employee Profile System and Automated Performance Appraisal System.
would provide the data base for implementing Agency-wide automated succession
and assignment planning capabilities. System design and development costs of
$180,000 included in the costs for the Career Development feature would be
incurred in FY 1988 with hardware acquisition, training, and implementation to
be phased into FY 1989 and FY 1990 at a cost of $1.8 and $1.0 million
respectively for access by 70 workstations.
Total cost (all options)
FY 1988 FY 1989 FY 1990 FY 1991 FY 1992
'Thousand $ 16,555 27,625 32,415 29,610 29,720
Percent of total 1.9 3.2 3.7 3.4 3.4
personal services
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