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NTEU Wins Key Decision in Fight to Protect NPAA Payouts

When NTEU and the IRS sat down to negotiate revisions to the National Performance Appraisal Awards (NPAA), both parties agreed that the award pool program needed to be simplified. NTEU had a plan that protects employees; the IRS took a much different approach.

Below is an in-depth look at the two proposals, the process and the decision:

IRS

The IRS proposal took aim at eliminating the organizational structure of existing pools (Appendix A level) and all geographic distinctions, a structure that had been in place for 18 years. The current awards agreements states that employees with an annual appraisal rating of 4.6 or above are guaranteed to receive an award. Under the agency plan, employees in each of the major occupational series in a division would be forced to compete nationwide with all others in that division and series to be in the top 55% to qualify a performance award.  However, NTEU’s analyses of the awards pool data revealed that while the number of award pools would be greatly reduced under this proposal, thousands of employees who are still eligible for an award would no longer receive an award, as more awards would be given to employees in locations where managers give higher appraisal scores. 

NTEU

To reduce the potential impact to eligible employees, NTEU proposed that all NPAA pools that currently have a critical job element (CJE) cut-off score of 4.6 or above in each pool be combined into “Consolidated Pools” by division and series and all other pools lower than a 4.6 would remain the same (i.e., maintain the current job series, division and geographic pool components). 

NTEU argued that award pools that have reached a 4.6 CJE cut-off score show no evidence of a rating bias/low rating culture.  NTEU’s proposal retained both the organizational and geographic components that have been part of the program for 18 years, a fact not lost on the factfinder, and which was specifically created to address differences in ratings that still exist in different parts of the IRS. By having geographically discrete pools, the negative impact of such rating cultures is minimized. Still, NTEU’s proposal significantly reduced the number of pools from 822 to 199 but does not cause currently eligible employees to lose out on an award. 

Hearing

During the factfinding hearing, NTEU presented evidence that a purely division-wide pool structure would result in performance awards concentrated in certain areas of the country because of geographic “rating culture” differences. This means that more than 2,000 employees who currently receive an award each year and would still be eligible for an award would lose out to other employees where the performance ratings are higher. NTEU’s bargaining team and the chapter leaders who testified discussed how the IRS’s proposal would cause an adverse impact on employees, particularly lower-graded employees who rely on a performance awards each year to pay bills or take time off to spend with their families. NTEU’s testimony also established that the loss of performance awards would have an adverse effect on morale and productivity. 

Decision

The factfinder framed the issue around three interests NTEU and the IRS share:

1. the awards program must be fair and objective;

2. the pool structure must be simplified by reducing the number of pools; and

3. annual disputes over changes to award pools due to reorganizations and realignments must be resolved.

The factfinder found NTEU’s proposal better met these three interests.

In concluding that NTEU’s proposal was the more reasonable proposal, the factfinder found that the elimination of the geographical component (as proposed by the IRS) renders the resulting award pools overbroad in scope and raises questions of fairness and objectivity of ratings and evaluations.  The IRS’s proposal ignored the significant “regional character” of the business units, particularly with regard to different job duties within a state/territory, and the resulting pools would unfairly group many bargaining unit employees with different job duties into the same (nationwide) award pool.  He also found convincing NTEU’s argument that the preservation of the award pool structure’s geographical component protects bargaining unit employees from differences in rating cultures.

The factfinder recognized NTEU’s willingness to meet the agency’s interest in reducing the number of award pools while also retaining the integrity of an award pool structure. The factfinder also recognized the need to automate the awards process so the IRS can quickly and easily make necessary changes due to realignments.