38:0456(46)NG - - NAGE Local R1-144, Federal Union of Scientists and Engineers and Navy, Naval Underwater Systems Command, Newport, RI - - 1990 FLRAdec NG - - v38 p456


[ v38 p456 ]
38:0456(46)NG
The decision of the Authority follows:


38 FLRA No. 46

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES

LOCAL R1-144

FEDERAL UNION OF SCIENTISTS AND ENGINEERS

(Union)

and

U.S. DEPARTMENT OF THE NAVY

NAVAL UNDERWATER SYSTEMS CENTER

NEWPORT, RHODE ISLAND

(Agency)

0-NG-1650

DECISION AND ORDER ON NEGOTIABILITY ISSUES

November 28, 1990

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on a negotiability appeal filed under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute). It concerns 13 proposals regarding the Agency's Performance Appraisal Review System.(1)

For the reasons that follow we find: Proposal 2, which addresses the treatment of "close-out ratings" in deriving annual ratings, is limited to bargaining unit employees, and neither directly interferes with management's rights to direct employees and assign work nor is inconsistent with Government-wide regulations. We find that it is negotiable.

The disputed portion of Proposal 3, which requires that performance standards be fair and equitable, is nonnegotiable because it directly interferes with management's rights to direct employees and assign work.

Sentence one of Proposal 4, which requires that certain information be included in performance plans, neither directly interferes with management's rights to direct employees and assign work nor is inconsistent with a Government-wide regulation and is negotiable. Sentence two directly interferes with management's rights to direct employees and assign work because it would allow employees to negotiate over the content of performance standards and is nonnegotiable. Sentence three, which would preclude management from holding employees responsible for matters beyond their control, also directly interferes with management's rights to direct employees and assign work and is nonnegotiable.

Proposal 5, which addresses the number of rating levels and the criteria for performance evaluation, directly interferes with management's rights to direct employees and assign work and is nonnegotiable.

Proposal 6, which addresses remedial actions to be afforded employees whose performance is less than "Fully Successful," directly interferes with management's right to assign work and is nonnegotiable.

Sentences two and three of Proposal 7, which prescribe a budgetary allocation for awards, directly interfere with management's right to determine the budget of the Agency and are nonnegotiable. Sentence five of Proposal 7, which assigns responsibilities relating to awards to the Personnel Department, directly interferes with management's right to assign work and is nonnegotiable.

Proposal 8, which assigns responsibilities relating to awards to specified officials, directly interferes with management's right to assign work and is nonnegotiable.

Proposal 9, which would require, in certain circumstances, that a Quality Step Increase be awarded, is inconsistent with a Government-wide regulation and is nonnegotiable.

Sentences one and three of Proposal 10, which relate to dividing funds for awards into pools, do not directly interfere with management's right to determine the budget of the Agency and are negotiable. Sentence two of Proposal 10, which relates to the amount of funds to be budgeted for awards, directly interferes with management's right to determine the budget of the Agency and is nonnegotiable.

Proposals 11 and 12, which address the types and amounts of awards that may be given for a particular performance rating, are negotiable. The proposals concern conditions of employment within the meaning of section 7103(a)(14); do not directly interfere with management's rights to determine the budget of the Agency, direct employees and assign work; and are consistent with Government-wide regulations.

Proposal 13, which would require reassignment of certain employees whose performance had been identified as "Unacceptable," is nonnegotiable because it directly interferes with management's right to assign employees.

Sentence four of Proposal 14, which would require counseling and closer supervision for employees whose performance is less than "Fully Successful," has not been shown to directly interfere with management's right to assign work and is negotiable. Sentence five of Proposal 14, which would require training for employees whose performance is less than "Fully Successful," excessively interferes with management's right to assign work and is nonnegotiable.

II. Proposal 2

Item 5(e).(2) Close-out ratings [sic] means a written "summary rating" as defined below and in 5 CFR [§] 430.203, conducted when an employee or supervisor leaves a position after the employee has been under established performance standards for 90 days. All critical elements above Fully Satisfactory (FS) at a close-out rating will serve as rating of record for that element at end of year. Close-out ratings for continuing critical elements are interim appraisals and do not serve as the annual rating of record.

A. Positions of the Parties

The Agency argues that Proposal 2 is nonnegotiable because it interferes with management's rights under section 7106(a) to direct employees and assign work by prescribing the criteria upon which employees will be rated. More specifically, the Agency contends that the proposal would interfere with its "managerial discretion" to determine the weight to be given critical elements in an employee's annual performance appraisal and would cause an upward skewing of ratings by preventing equal treatment of lower and higher ratings. Agency statement of position at 2-3. Additionally, the Agency argues that, by requiring that the "close-out" ratings be more than simply considered in deriving a final rating, this proposal is inconsistent with 5 C.F.R. §§ 430.205(a) and 430.206(f), Government-wide regulations. The Agency further argues that the proposal is outside the duty to bargain because it, "in part, addresses performance appraisals for supervisors[.]" Agency statement of position at 5.

The Union describes the proposal as seeking to allow employees to have the benefit of "work well done" when an employee or supervisor changes position and a critical element does not continue in the employee's new position or under the new supervisor. Union reply brief, Proposal 2. (3) The Union denies that this proposal either interferes with management's rights or is inconsistent with Government-wide regulations. The Union denies that the proposal is intended to apply to the performance appraisals of supervisors. Id.

B. Analysis and Conclusions

1. Management's Rights To Direct Employees and Assign Work

The Authority has held that, in the context of performance appraisal systems, management's rights to direct employees and assign work are exercised through supervising and determining the quantity, quality, and timeliness of employees' work products and establishing employees' work priorities. For example, Patent Office Professional Association and Patent and Trademark Office, Department of Commerce, 25 FLRA 384, 385 (1987) (POPA), aff'd mem. sub nom. Patent Office Professional Association v. FLRA, No. 87-1135 (D.C. Cir. Mar. 30, 1988) (per curiam); National Treasury Employees Union and Department of the Treasury, Bureau of the Public Debt, 3 FLRA 769 (1980) (Public Debt) aff'd sub nom. National Treasury Employees Union v. FLRA, 691 F.2d 553 (D.C. Cir. 1982). Consequently, the Authority has held that the rights to direct employees and assign work encompass the authority to identify critical elements and to establish performance standards. For example, American Federation of Government Employees, Local 3172 an U.S. Department of Health and Human Services, Social Security Administration, Vallejo District Office, 35 FLRA 1276 (1990) (SSA, Vallejo); POPA; and Public Debt.

Proposals governing only the application of performance standards and critical elements generally do not conflict with management's rights to direct employees and assign work. For example, SSA, Vallejo, 35 FLRA at 1281. However, the rights to direct employees and assign work do include the right to determine the aspects of employees' work to be evaluated for the purpose of preparing employee performance appraisals. For example, American Federation of Government Employees, Local 32, AFL-CIO and Office of Personnel Management, 28 FLRA 714, 717 (1987). The Authority has held that a proposal that would prevent management from enforcing its established performance standards effectively alters the contents of the standards and, consequently, conflicts with the rights to direct employees and to assign work. National Treasury Employees Union and Department of Health and Human Services, Office of Hearings and Appeals, 34 FLRA 1022, 1024-27 (1990). Moreover, the right to evaluate employee performance extends to the determination of the rating to be given an employee. American Federation of Government Employees, AFL-CIO, Local 1760 and Department of Health and Human Services, Social Security Administration, 28 FLRA 160, 169 (1987). The Authority has also held that a contract provision that deprives a performance appraisal reviewing official of the discretion to change appraisals interferes with management's right to assign work by preventing the reviewing official from carrying out duties inherent in the work of appraisal review.(4) American Federation of Government Employees, Local 1509, Sioux Falls, South Dakota Veterans Hospital and U.S. Veterans Administration Hospital, Sioux Falls, South Dakota, 23 FLRA 17 (1986).

As written and explained by the Union, Proposal 2 requires that where an employee or his/her supervisor changes positions, the employee will be provided a "close-out rating." Under the proposal, any ratings above the fully successful level that are received on a critical element as a "close-out rating" would serve as the rating of record for purposes of the annual performance appraisal when that particular critical element does not continue in the employee's new position or under the new supervisor.

Nothing in the proposal or the Union's statement of intent specifies what weight must be accorded the "close-out ratings" in a noncontinuing critical element for purposes of determining an employee's annual performance appraisal. Therefore, we reject the Agency's claim to that effect. Additionally, although it is clear from the Union's reply brief that it does not intend the proposal to require that a "close-out rating" of "fully successful" or below become the rating of record for purposes of an employee's annual appraisal, the proposal itself is silent concerning what treatment is to be accorded to the lower ratings. We do not read the proposal as preventing the Agency from according the same treatment to lower "close-out ratings" as the proposal requires be accorded to higher "close-out ratings." Thus, the Agency's contention that the proposal would cause an upward skewing of ratings is unfounded.

Based on the record, we find that Proposal 2 would not directly interfere with the Agency's exercise of its rights to determine the content of critical elements and performance standards, to evaluate employee performance, or to determine the rating to be given an employee. See National Treasury Employees Union and U.S. Department of Commerce, Patent and Trademark Office, 36 FLRA 606 (1990) (proposal that determines the aspects of an employee's job that will constitute work units for counting purposes in agency's performance standards constitutes a procedure negotiable under section 7106(b)(2) and does not directly interfere with management's rights to direct employees and assign work). Additionally, the Agency does not assert and there is no basis for concluding that the proposal would interfere with the performance of duties by appraisal review officials. We reject the Agency's contention that Proposal 2 directly interferes with its rights to direct employees and assign work.

2. Government-wide Regulations

The Authority has construed the term "Government-wide regulation" to include regulations and official declarations of policy that apply to the Federal civilian work force as a whole and are binding on the Federal agencies and officials to which they apply. National Treasury Employees Union, Chapter 6 and Internal Revenue Service, New Orleans District, 3 FLRA 747 (1980) (IRS, New Orleans District). The Authority has emphasized that a requirement that a regulation apply, literally, to all Federal civilian employees in order to constitute a Government-wide regulation under section 7117 would render that provision virtually meaningless, as few, if any, regulations affect every civilian employee of the Federal Government. The Authority has found from the legislative history of the Statute that Congress understood "Government-wide regulation" to constitute a significant limitation on the scope of bargaining and intended the term to include more than the inconsequential number of regulations that might fall within a literal definition. Thus, the Authority has concluded that a regulation is a Government-wide regulation under section 7117 if it is generally applicable throughout the Federal sector. See, for example, Overseas Education Association, Inc. and Department of Defense, Office of Dependents Schools, 22 FLRA 351, 354 (1986), aff'd sub nom. Overseas Education Association, Inc. v. FLRA, 827 F.2d 814 (D.C. Cir. 1987).

Under 5 U.S.C. § 4302, executive agencies, with minor exceptions, are required to establish performance appraisal systems covering employees. The Office of Personnel Management (OPM) is authorized to prescribe regulations governing the establishment and operations of those systems. For example, 5 U.S.C. § 4302(b). Pursuant to that authority, OPM has issued regulations that include those provisions codified at 5 C.F.R. Part 430. See 5 C.F.R. § 430.101 (1990). By its terms, 5 C.F.R. Part 430, Subpart B, applies to Federal general schedule and prevailing rate employees, with minor exceptions,(5) and is binding on the heads of agencies.(6) Based on its nature and scope, we conclude that 5 C.F.R. Part 430, subpart B, which includes sections 430.205(a) and 430.206(f), is a Government-wide regulation within the meaning of section 7117(a) of the Statute.

Having determined that, we now address the question of whether Proposal 2 conflicts with 5 C.F.R. §§ 430.205(a) and 430.206(f). 5 C.F.R. § 430.205(a) provides:

Systems shall provide for preparing a summary rating when an employee changes positions during the appraisal period, if the employee has served for the minimum appraisal period in the position from which he/she has changed; agency Performance Management Plans must describe how these ratings and any other ratings given throughout the appraisal period will be taken into consideration in deriving the next rating of record.

5 C.F.R. § 430.206(f) provides:

(f) Transfer of rating. If an employee moves to a new agency or new organization in the employing agency at any time during the appraisal period, the current performance ratings of record must be transferred . . . . A summary rating must be prepared as required by § 430.205(a) of this subpart, which must be taken into consideration by the gaining agency when deriving the next rating of record.

The Agency asserts that, because the proposal mandates that a "close-out rating" for a noncontinuing critical element become the rating of record for that element, the rating "will not simply be considered in deriving a final rating" as it contends is required by the above-quoted regulatory provisions. Agency statement of position at 4.

In our view, the requirement that a "close-out rating" on a noncontinuing critical element be treated as a rating of record for purposes of "the next rating of record" is not inconsistent with a requirement that the "close-out rating" must be "taken into consideration" in deriving "the next rating of record." Under the regulatory provisions, the determination of how ratings that are based on performance during a portion of the appraisal period are to be "taken into consideration" is left to the agency's discretion. Matters that are within the discretion of an agency and are not otherwise inconsistent with law or applicable rule or regulation are negotiable. For example, National Federation of Federal Employees and U.S. Department of Agriculture, Forest Service, 35 FLRA 1008, 1014 (1990), petition for review filed sub nom. U.S. Department of Agriculture, Forest Service v. FLRA, No. 90-1333 (D.C. Cir. Jul. 5, 1990); National Treasury Employees Union and Department of the Treasury, U.S. Customs Service, 21 FLRA 6 (1986) (Customs Service), aff'd sub nom. Department of the Treasury, U.S. Customs Service v. FLRA, 836 F.2d 1381 (D.C. Cir. 1988); IRS, New Orleans District, 3 FLRA at 759-60. Of course, where the discretion committed to the agency is unfettered, that discretion is not subject to negotiation. Illinois National Guard v. FLRA, 854 F.2d 1396 (D.C. Cir. 1988) (agency could not be required to bargain over matter that was the subject of unfettered discretion vested in agency head by law). Here, the Agency cites nothing to support a conclusion, and it is not otherwise apparent to us, that the determination of how ratings based on a portion of the appraisal period will be taken into consideration is a matter of unfettered discretion.

Based on the foregoing, we reject the Agency's contention that Proposal 2 is inconsistent with a Government-wide regulation.

3. Applicability of the Proposal to Supervisors

The Union states that Proposal 2 is not intended to apply to the performance appraisals given to supervisors. This statement is not inconsistent with the wording of the proposal. Therefore, we conclude that the proposal would only apply to performance appraisals given to bargaining unit employees and reject the Agency's claim that the proposal would apply to performance appraisals provided to supervisors.

4. Conclusion

Based on the foregoing, we conclude that Proposal 2 is negotiable.

III. Proposal 3

Item 7a(1). Individual employee performance plans shall be in writing. Performance elements and standards will be prepared based on the requirements of the employee's position. Generic elements and standards may be used. Performance element standards [sic] shall be fair and equitable. Changes in performance elements during an appraisal period must be consistent with employee's position description. (Disputed portion underlined).

A. Positions of the Parties

The Agency asserts that the disputed portion of Proposal 3 is nonnegotiable because it interferes with management's rights to direct employees and assign work by substantively restricting the Agency's authority to establish performance standards. The Union contends that this proposal does not substantively affect management's rights, but, rather, establishes a "general, non-quantitative requirement allowing management's setting of standards" to be evaluated. Union reply brief, Proposal 3.

B. Analysis and Conclusions

As discussed in conjunction with Proposal 2, management's rights to direct employees and assign work encompass the authority to identify critical elements and to establish performance standards. The Authority has long distinguished between those proposals that determine the content of performance standards and proposals that are limited to the application of performance standards. Proposals in the former group are generally held to interfere with the rights to direct employees and assign work. For example, American Federation of Government Employees, AFL-CIO, Department of Education Council of AFGE Locals and Department of Education, 34 FLRA 1114 (1990) (Proposal 1) (Department of Education). Proposals in the latter group are generally held to be negotiable. For example, SSA, Vallejo, 35 FLRA at 1281.

In Department of Education, 34 FLRA at 1117-18, the Authority found that a proposal requiring that a performance appraisal system be fair and equitable was nonnegotiable because the proposal's requirements were not restricted to the application of the performance appraisal system but, rather, applied to the content of the system. Among the previous decisions on which the Authority relied in finding the proposal nonnegotiable was a decision of the U.S. Court of Appeals for the Eighth Circuit that stated in relevant part:

To allow the Union to negotiate over the meaning of such a broad and subjective term as "fair," for example, would effectively open the door to bargaining over any aspect of performance standards. Contradicting their expressed wish to affect only the application of performance standards, the Union is attempting to gain a foothold in territory that is management's exclusively, i.e., fashioning the content of performance standards.

American Federation of Government Employees, Local 3748 v. FLRA, 797 F.2d 612, 618 (8th Cir. 1986).

As the Authority noted in Department of Education, a proposal requiring only that performance standards be established in accordance with applicable law, for example, 5 U.S.C. § 4302(b), is negotiable. Proposal 3 is similar to Proposal 1 in Department of Education, however, in that it does not merely require the Agency to establish critical elements and performance standards in accordance with law. Rather, Proposal 3 requires that they be "fair and equitable," which are substantially different requirements than those imposed by 5 U.S.C. § 4302(b)(l).(7) As we stated in Department of Education, although the concepts of fairness and equity in performance elements and standards are ideals to which agencies and unions no doubt aspire, proposals that impose them as contractual criteria to govern the content of the elements and standards directly interfere with management's rights to direct employees and assign work. 34 FLRA at 1118.

Based on the foregoing, we find that the disputed portion of Proposal 3 is outside the duty to bargain because it directly interferes with management's rights to direct employees and assign work.

IV. Proposal 4

Item 7(a)(2). Accomplishment of organization objective will be included in performance plan by incorporating goals, program plans or other measures of program results. The performance plan will include the supervisor['s] and employee's conditions and assumptions required to meet the performance plans standards. No employee shall be held responsible for the work performed by other employees, supervisors, managers, contracts etc. for [sic] which they have no control over. If an employee requests his supervisor's performance plan or organizational objective, they shall be provided. (Disputed portion underlined.)

A. Positions of the Parties

The Agency asserts that the disputed portions of this proposal interfere with management's rights to direct employees and assign work by requiring that certain information be included in the performance plan and by insulating employees from accountability for work "which they have no control over." Additionally, the Agency asserts that the first sentence is inconsistent with 5 C.F.R. § 430.204(d)(2), a Government-wide regulation. In support of this latter contention, the Agency asserts that the regulation provides only that accomplishment of organizational goals "should, when appropriate" be included in performance plans while the proposal would mandate inclusion whether or not such was appropriate. Agency statement of position at 9.

The Union states that it is attempting to protect employees from "management's mistakes" and have employees informed about "what management is requiring." Union reply brief, Proposal 4.

B. Analysis and Conclusions

1. Sentence One

The Union describes the intent of the proposal as being to provide employees with "a wider understanding of the why and wherefore of their individual elements," and adopts the Agency's characterization of sentence one as relating to "information." Union reply brief, Proposal 4. Based on the record in this case, particularly the proposal itself and the Union's statement of intent, we interpret the first sentence as prescribing that the specified matters be included in performance plans for informational purposes only. The proposed first sentence would only require the Agency to set forth information concerning the context in which performance standards and critical elements apply. It does not establish criteria that would govern the content of those standards and elements: that is, the level of job performance expected of employees with regard to selected duties and responsibilities of their jobs for purposes of appraising their performance. In our view, a proposal that only requires that information be included in performance plans and does not specify criteria that would govern the content of performance standards and critical elements does not interfere with the Agency's right to determine such content.

The wording of the first sentence reflects the provisions of 5 C.F.R. § 430.204(d)(2), which states:

(2) Accomplishment of organizational objectives should, when appropriate, be included in performance plans by incorporating objectives, goals, program plans, work plans, or by other similar means that account for program results.

In our view, this regulatory provision is ambiguous and can be read as either encouraging the inclusion of the specified matters in performance plans for purely informational purposes or intending that the content of performance standards and elements should reflect "organizational objectives." For that matter, it may encompass both interpretations. Under the latter interpretation, the regulatory provision would effectively specify criteria governing the content of performance standards and critical elements; under the former interpretation, the provision does not specify criteria governing content. There is nothing in the regulation that compels adoption of the latter interpretation to the exclusion of the former interpretation. Based on the Union's statement of intent, we conclude that the proposal requires only that information concerning the specified matters be incorporated in the performance plans and not that the content of the performance standards and elements reflect "organizational objectives."

The Authority has previously held that proposals that merely require an agency to provide information concerning conditions of employment do not directly interfere with management's rights but are negotiable procedures. See, for example, Fort Bragg Association of Educators, NEA and Department of the Army, Fort Bragg Schools, 30 FLRA 508, 535-36 (1987) (Fort Bragg), rev'd as to other matters sub nom. Fort Bragg Association of Educators, NEA v. FLRA, 870 F.2d 698 (D.C. Cir. 1989). For the foregoing reasons, we conclude that the first sentence of Proposal 4 does not directly interfere with management's rights to direct employees and assign work.

We also reject the Agency's claim that the first sentence is inconsistent with 5 C.F.R. § 430.204(d)(2). Proposal 4 would require that information related to the accomplishment of organizational objectives be included in performance plans, according to the Union, for the purpose of providing employees with a better understanding of the reasons for the requirements being placed on them by the performance plan. In our view, the determination of when it is appropriate to include the matters specified in 5 C.F.R. § 430.204(d)(2) in performance plans is left to the Agency's discretion under the regulation. As discussed above in conjunction with Proposal 2, matters that are within the discretion of an agency and are not otherwise inconsistent with law or applicable rule or regulation are negotiable. Here, the Agency makes no showing, and it is not otherwise apparent to us, that the discretion that it possesses under 5 C.F.R. § 430.204(d)(2) is unfettered and cannot be exercised through negotiations. Consequently, we do not find that sentence one is inconsistent with 5 C.F.R. § 430.204(d)(2).

2. Sentence Two

The Union does not explain what is intended by sentence two. As written, the proposal requires that performance plans include "the supervisor['s] and employee[']s conditions and assumptions required to meet the performance plan standards." We interpret the second sentence as requiring that the supervisor and employee mutually agree on the "conditions and assumptions required to meet the performance plan standards" to be included in the employee's performance plan.(8) By subjecting the determination of what is required to meet performance standards to mutual agreement, the sentence effectively permits employees to negotiate over the content of the performance standards. As discussed in conjunction with Proposal 2, management's rights to direct employees and assign work encompass the authority to establish performance standards. For example, SSA, Vallejo, POPA, and Public Debt. Proposals that have the effect of allowing employees to negotiate over the establishment and content of performance standards directly interfere with those rights. For example, National Federation of Federal Employees, Local 1623 and South Carolina National Guard, Columbia, South Carolina, 28 FLRA 633, 636-38 (1987), aff'd as to other matters sub nom. National Federation of Federal Employees, Local 1623 v. FLRA, 852 F.2d 1349 (D.C. Cir. 1988).

Because the second sentence would effectively allow employees to negotiate over the content of performance standards, it directly interferes with management's rights to direct employees and assign work. If the sentence was revised to require that employees be provided with information as to what management expected of them in order to meet performance plan requirements, the sentence would likely be negotiable. See, for example, Fort Bragg, 30 FLRA at 535-36 (proposals that merely require an agency to notify employees of matters concerning their conditions of employment are negotiable procedures); see also U.S. Department of Health and Human Services, Social Security Administration, Chicago, Illinois and American Federation of Government Employees, Local 1346, 35 FLRA 1180, 1185-86 (1990) (under 5 U.S.C. § 4302(b)(2) an agency must apprise employees of the requirements against which they are to be measured for purposes of performance appraisal).

3. Sentence Three

Sentence three is to the same effect as Provision 1 in National Treasury Employees Union, Chapter 237 and U.S. Department of Agriculture, Food and Nutrition Service, Midwest Region, 32 FLRA 62 (1988) (Food and Nutrition Service). That provision precluded management from establishing performance standards that held employees responsible when levels of performance were affected by matters beyond the employee's control. In Food and Nutrition Service, the Authority distinguished between proposals that require management merely to consider matters outside the control of the employee in applying performance standards and those that require that employees be absolved of accountability and responsibility for their work performance in situations where that performance has been affected by matters outside the employee's control. Proposals in the former category concern the application of performance standards, do not directly interfere with management's rights, and are generally negotiable. See, for example, National Federation of Federal Employees, Local 2096 and U.S. Department of the Navy, Naval Facilities Engineering Command, Western Division, 36 FLRA 834, 845-46 (1990) (NAFEC, Western Division). Proposals in the latter category directly interfere with management's rights to determine the content of performance standards and elements and to evaluate employees against them and, consequently, directly interfere with management's rights to direct employees and assign work. See Food and Nutrition Service, 32 FLRA at 63-65. Because sentence three is not limited to identifying circumstances that management should merely consider when evaluating employees, but would prevent management from holding employees accountable for their work performance in the identified circumstances, it directly interferes with management's rights to direct employees and assign work.(9) Compare NAFEC, Western Division, 36 FLRA 834 (1990) (Provision 2, which required management to adjust its performance expectations in light of certain factors beyond the control of employees, directly interfered with management's rights to direct employees and assign work) with SSA, Vallejo, 35 FLRA at 1280-83 (proposal that was limited to identifying certain circumstances that management should consider when evaluating employee performance did not interfere with management's rights).

4. Conclusions

Based on the foregoing reasons, we find that sentence one does not directly interfere with management's rights to direct employees and assign work and is not inconsistent with 5 C.F.R. § 430.204(d)(2). Thus, we conclude that sentence one is negotiable. Sentences two and three directly interfere with management's rights to direct employees and assign work and the Union has not asserted that they are negotiable as appropriate arrangements under section 7106(b)(3) of the Statute. Therefore, we conclude that those two sentences are nonnegotiable.

V. Proposal 5

Item 7c4(b). Definitions of the five summary rating levels are provided below. Definitions are used to convert element ratings to a final summary rating.

RATING  DEFINITIONS 
 Outstanding (O) (level 5)  Rated "Above Fully Successful" on all critical elements.
 Exceeds Fully Successful (level 4)  Rated above fully successful on fifty percent or more of critical elements.
 Fully Successful (level 3)  Rated at least fully successful on all critical elements.
 Minimally Successful (level 2)  Rated "Below Fully Successful" on one or more critical element[s] but did not fall below the Minimally Successful Standard on any element.
 Unacceptable (level 1)  Failed to meet the "Minimally Successful" standard on one or more critical elements.

A. Positions of the Parties

The Agency argues that Proposal 5 interferes with management's rights to direct employees and assign work by establishing the number of rating levels and the quality of performance required at each level. The Union states that this proposal, in large measure, mirrors an Agency proposal.(10)

B. Analysis and Conclusions

It is well-established that proposals that establish the number of rating levels and criteria for performance evaluations are outside the duty to bargain because they directly interfere with management's rights to direct employees and assign work. For example, Service and Hospital Employees International Union, Local 150 and Veterans Administration Medical Center, Milwaukee, Wisconsin, 35 FLRA 521, 531-33 (1990) (VAMC, Milwaukee); American Federation of State, County and Municipal Employees, AFL-CIO, Council 26 and U.S. Department of Justice, 13 FLRA 578 (1984) (Department of Justice).

As the Authority noted in Department of Justice, an essential aspect of management's assignment of work and the supervision and guidance of employees in the performance of their work is the establishment of job requirements for various levels of performance so as to elicit the quality and amount of work from employees necessary to effectively and efficiently fulfill the agency's mission and functions. Consequently, a proposal that would establish the particular levels of performance in individual job elements required to achieve a particular summary rating for overall performance directly interferes with management's rights to direct employees and assign work. Department of Justice, 13 FLRA at 580. Additionally, the determination of the number of performance levels directly affects the degree of precision with which management can establish and communicate job requirements and the range of judgments that management can make regarding performance. In short, the number of such levels is integrally related to the effectiveness of an agency's using performance standards to accomplish the work of the agency in a manner consistent with the exigencies of effective government. Id. at 580-81.

Even if Proposal 5 largely mirrors an Agency proposal or established practice, such fact does not render negotiable a proposal that is nonnegotiable under section 7106(a). See, for example, Fraternal Order of Police, Lodge 1F (R.I.) Federal and Veterans Administration, Veterans Administration Medical Center, Providence, Rhode Island, 32 FLRA 944, 947 (1988) (VAMC, Providence) (proposals that are nonnegotiable under section 7106(a) do not become negotiable based on management actions).

We conclude that Proposal 5 directly interferes with management's rights under section 7106(a) to direct employees and assign work. Therefore, as the Union has not asserted that it is an appropriate arrangement under section 7106(b)(3) of the Statute, it is nonnegotiable.

VI. Proposal 6

Item 7(c)14. "Employees who receive a rating of record below the Fully Successful level must receive sufficient assistance in the form of formal training, on-the-job training, counseling, and close supervision and other appropriate measures to enable them to perform at the Fully Successful level."

A. Positions of the Parties

The Agency contends that Proposal 6 interferes with management's right to assign work because it would require the assignment of formal training. The Agency also argues that because this proposal would require unlimited remedial assistance and therefore prevent management from taking certain disciplinary actions, it interferes with management's rights to assign, reduce in grade and remove employees.

The Union asserts that Proposal 6 reflects a requirement set forth in the Code of Federal Regulations that requires that assistance be provided employees whose performance falls below the Fully Successful level. The Union states that, although the proposal states that the assistance must be sufficient to enable the employee to perform at an acceptable level, a third party may determine whether sufficient assistance was given.

B. Analysis and Conclusions

The OPM regulations governing agency performance appraisal systems provide at 5 C.F.R. § 430.204(i):

(i) Each appraisal system shall provide for assisting employees in improving performance rated at a level below the "Fully Successful" level. Such assistance may include but is not limited to formal training, on-the-job training, counseling, and closer supervision.

As we found in conjunction with Proposal 2, 5 C.F.R. Part 430, Subpart B, which includes § 430.204(i), is a Government-wide regulation. A proposal that paraphrases a Government-wide regulation is within the duty to bargain unless the proposal directly interferes with management's rights or is inconsistent with applicable regulations. National Treasury Employees Union, Chapter 213 and 228 and United States Department of Energy, Washington, D.C., 32 FLRA 578, 583-84 (1988). However, where incorporation of the terms of a Government-wide regulation directly into the contract would have the effect of imposing an independent, contractual requirement on an agency's discretion to exercise its management rights, a proposal doing so directly interferes with those rights. For example, National Treasury Employees Union and Department of the Treasury, Financial Management Service, 29 FLRA 422, 426-27 (1987). Therefore, the question presented is whether Proposal 6, by its terms, directly interferes with any of the management rights set forth in section 7106.

In contrast to 5 C.F.R. § 430.204(i), which requires that agency appraisal systems provide for assistance, which may include training, to employees whose performance is below the Fully Successful level, the proposal requires that formal and on-the-job training be provided if necessary to enable employees to perform at the Fully Successful level. The Authority has consistently held that proposals requiring an Agency to provide job-related training during duty hours are outside the duty to bargain because the assignment of that type of training constitutes an assignment of work. For example, American Federation of Government Employees, AFL-CIO, Local 1625 and Department of the Navy, Naval Air Station, Oceana, Virginia, 30 FLRA 1105, 1111-13 (1988) (NAS, Oceana). By requiring the Agency to provide training that would include job-related training during duty hours when necessary to enable an employee to bring their performance up to the Fully Successful level, Proposal 6 interferes with the Agency's discretion to determine whether such training will be assigned to employees. Consequently, this proposal directly interferes with management's right to assign work and, as the Union has not asserted that it constitutes an appropriate arrangement under section 7106(b)(3) of the Statute, it is nonnegotiable.

In view of this conclusion, it is unnecessary to address the Agency's contention that Proposal 6 interferes with management's right to assign, reduce in grade, and remove employees.

VII. Proposals 7 and 10

[Proposal 7]

Item 9b(1). Proper and equitable performance ratings and resulting payments and awards will be granted to covered employees. If management decides to give awards within any given grouping, then the budget allocations in that grouping will be 1.5% of base aggregate payroll. Responsibility for ensuring that the 1.5% limit is not exceeded and the 1.5% is set aside in a fund to be distributed as awards to employees is delegated to the Activity Head Designees. Because the appraisal cycle ends on 31 July, and award payments must be made no later than 31 October, they may be made from the budgets of either or both fiscal years spanning the periods. The Personnel Department will support the Activity Head Designee[s] in their responsibilities in this matter. (Underlined portions disputed.)

[Proposal 10]

Item 9(e)(4)(d). The money in each Activity Head Designee[']s fund shall be split into two pools[,] one for GS-12 and below and another for GS-13 and above. The funds in each pool shall be obtained from % of payroll for the respective grouping. Awards for GS-12 and below shall be only from their pool and likewise for GS-13 and above.

A. Positions of the Parties

The Agency contends that both proposals are nonnegotiable because they interfere with management's right to determine the budget of the Agency by dictating the allocation of Agency funds for awards and because of their significant cost implications. In this latter regard, the Agency argues that the degree of benefit to employees is disproportionate to the cost to the Agency. As to Proposal 7, the Agency makes the following additional contentions. The Agency asserts that because Proposal 7 concerns performance awards, which the Agency asserts is a "pay issue," the proposal does not concern a condition of employment within the meaning of section 7103(a)(14) of the Statute. To support this contention, the Agency argues that Congress did not intend that section 7103(a)(14) would encompass pay and money-related fringe benefits. The Agency contends that the third and fifth sentences of Proposal 7 interfere with management's right to assign work because they specify duties that are to be performed by "Activity Head Designees" and the Personnel Department. Finally, the Agency asserts that Proposal 7 is inconsistent with Government-wide regulations; specifically, 5 C.F.R. §§ 430.203, 430.204, 430.206, 430.503(c)(1), 430.503(f), and 430.506(a).

The Union states that Proposal 7 does not require that any awards be given but is only concerned with ensuring that funds are set aside for awards. According to the Union, once the decision is made to give awards within a particular "Activity Head Designee's grouping," Proposal 7 would require that "l.5% of employee salaries in that grouping be put aside for awards." Petition at 4; Union reply brief, Proposal 7. The Union asserts that Proposal 7, in large measure, reflects an Agency "proposal" and that the impact on individual Activity Head budgets would not be that great. The Union contends that Proposal 10 does not interfere with the Agency's right to determine its budget.

B. Analysis and Conclusions

1. Management's Right To Determine Its Budget

A. The 1.5 Percent Funding Requirement

The Authority first articulated the analytical structure that it would use to make determinations on whether proposals directly interfered with management's right to determine an agency's budget in American Federation of Government Employees, AFL-CIO and Air Force Logistics Command, Wright-Patterson Air Force Base, Ohio, 2 FLRA 604, 607-08 (1980) (Wright-Patterson), aff'd as to other matters sub nom. Department of Defense v. FLRA, 659 F.2d 1140 (D.C. Cir. 1981), cert. denied, 455 U.S. 945 (1982).

In that decision the Authority stated:

[T]he agency's authority to determine its budget extends to the determination of the programs and operations which will be included in the estimate of proposed expenditures and the determination of the amounts required to fund them. Under the Statute, therefore, an agency cannot be required to negotiate those particular budgetary determinations. That is, a union proposal attempting to prescribe the particular programs or operations the agency would include in its budget or to prescribe programs or operations the agency would include in its budget or to prescribe the amount to be allocated in the budget for them would infringe upon the agency's right to determine its budget under section 7106(a)(1) of the Statute.

Moreover, where a proposal which does not by its terms prescribe the particular programs or amounts to be included in an agency's budget, nevertheless is alleged to violate the agency's right to determine its budget because of increased cost, consideration must be given to all the factors involved. That is, rather than basing a determination as to the negotiability of the proposal on increased cost alone, that one factor must be weighed against such factors as the potential for improved employee performance, increased productivity, reduced turnover, fewer grievances, and the like. Only where an agency makes a substantial demonstration that an increase in costs is significant and unavoidable and is not offset by compensating benefits can an otherwise negotiable proposal be found to violate the agency's right to determine its budget under section 7106(a) of the Statute. [Footnotes omitted.]

The effect of Wright-Patterson was the establishment of a two-part test for determining whether proposals directly interfere with management's right to determine the agency's budget.

Under the first part of the test, a proposal that prescribes the particular programs or operations an agency will include in its budget or prescribes the amount to be allocated in the budget for them is found to violate the agency's right to determine its budget. The first part of the budget test is narrow. It makes nonnegotiable only those proposals addressed to the budget per se, not those that would result in expenditures by an agency and, consequently, have an impact on the budget process. See, for example, Fort Stewart Schools v. FLRA, 110 S. Ct. 2043, 2052-53 (1990) (Marshall, J., concurring) (Fort Stewart); see also Tidewater Virginia Federal Employees Metal Trades Council and U.S. Department of the Navy, Norfolk Naval Shipyard, Portsmouth, Virginia, 37 FLRA No. 79, slip op. at 10-11 (1990) (Norfolk Naval Shipyard). Proposals that simply have cost ramifications cannot be said to inject a union directly into the budget formulation process that is protected from bargaining under the first part of the budget test.

Under the second part of the test, a proposal that does not, by its terms, prescribe the particular programs or amounts to be included in the agency's budget but would result in an increase in costs that is significant and unavoidable and not offset by compensating benefits is found to violate the right to determine budget.(11) Wright-Patterson, 2 FLRA at 608.

The Union describes the proposals' funding requirement as becoming operative only if the Agency decides to give awards within an "Activity Head Designee's grouping." The implication of this statement is that, under the proposals, the Agency retains an option that would allow it to avoid the funding requirements imposed by the proposals. We find that interpreting the proposals as effectively leaving the Agency free to decide simply not to give awards is inconsistent with the first sentence of Proposal 7, which states that "[p]roper and equitable performance ratings and resulting payments and awards will be granted to covered employees." We read that sentence as contemplating that some awards will be given and as contradicting the Union's claim that under the proposal the Agency is free to refrain from giving any awards and, thereby, avoid the funding requirements of the proposals. See SSA, Vallejo, 35 FLRA at 1289 (union's position rejected where the wording of the proposal contradicts the union's claim concerning the objective of the proposal).

Even assuming that the proposals would legitimately leave the Agency with a means of avoiding the requirement that 1.5 percent of base aggregate payroll be allocated in budgets for "Activity Head Designee groupings,"12/ the question of whether the funding requirement violates the Agency's right to determine its budget would still exist. As noted above, under the first part of the budget test a proposal that prescribes the amount to be allocated in an agency's budget for a particular program or operation violates management's right to determine its budget. Insofar as Proposals 7 and 10 prescribe that, in circumstances where awards are given within a particular "Activity Head Designee's grouping," 1.5 percent of base aggregate payroll be allocated in the budget for that grouping, they prescribe an amount to be allocated in the Agency's budget for a particular program or operation. Accordingly, we find that the second and third sentences of Proposal 7 and the second sentence of Proposal 10, all of which integrally relate to the 1.5 percent funding requirement, directly interfere with the Agency's right to determine its budget.

Because we have found that these portions of the proposals are nonnegotiable based on the first part of the budget test, it is unnecessary to address the Agency's argument with respect to the second part of the budget test.

B. The "Pool" Requirement

The first and third sentences of Proposal 10 are limited to requiring that money budgeted for performance awards be divided into two pools within "each Activity Head Designee's fund," one for employees GS-12 and below and the other for employees GS-13 and above. As written, these two sentences can stand independently of the 1.5 percent funding requirement and we address them separately from sentence two of Proposal 10, which is integrally related to that funding requirement.

These two sentences, standing by themselves, prescribe neither a particular program or operation nor an amount of funds to be included in the Agency's budget. In fact, under these two sentences the Agency retains the right to determine the amount of money to be applied to each pool. There is no showing, and it is not otherwise apparent to us, that these two sentences would result in any increase in costs. Consequently, these two sentences do not meet either part of the Authority's test for establishing that a proposal directly interferes with an agency's right to determine its budget. See American Federation of Government Employees, Local 3836 and Federal Emergency Management Agency, Washington, D.C., 31 FLRA 921, 931 (1988).

In fact, these two sentences simply establish a disbursement procedure to apply after the Agency has determined its budget. That is, once the Agency has determined how much money will be budgeted for performance awards, these two sentences would operate to designate what are, in effect, separate accounts for the purpose of administering the expenditure of those funds. Even assuming that the establishment of such accounts is part of the "budget" process, the two sentences merely outline a procedure for the Agency to follow in implementing its decision concerning the amount of funds budgeted for performance awards. The proposal does not directly interfere with the Agency's right to determine the programs and amounts to be included in its budget. Thus, assuming for the sake of argument that the two sentences relate to management's right to determine the budget of the Agency, the two sentences constitute procedures that management officials of the agency will observe in exercising that right and would be negotiable under section 7106(b)(2) of the Statute. See National Federation of Federal Employees, Local 1256 and Department of the Air Force, K.I. Sawyer Air Force Base, Michigan, 31 FLRA 1203, 1205-06 (1988) (K.I. Sawyer AFB) (proposal concerned with the pool of employees who would be considered for Quality Step Increases was "wholly procedural in nature").

2. Pay and Money-Related Fringe Benefits

At the outset, we reject the Agency's claim that performance awards are a "pay issue." An agency's authority under 5 U.S.C. §§ 4502-03 to grant awards encompasses performance awards. See 5 C.F.R. § 430.501(a); 51 Fed. Reg. 8396, 8407. In National Treasury Employees Union and Internal Revenue Service, 27 FLRA 132, 135-38 (1987) (Internal Revenue Service), the Authority concluded that incentive awards payable to employees under 5 U.S.C. §§ 4502 and 4503 do not constitute wages or salaries and are distinguishable from those "money-related fringe benefits" referred to in the legislative history of the Statute in the context of discussions of the scope of bargaining under the Statute and on which the Agency in this case relies. In concluding that incentive awards were not wages or salaries, the Authority relied on the fact that incentive awards are not encompassed under Chapter 53 of title 5, U.S. Code, which governs pay rates and systems generally, and that OPM did not view incentive awards to be properly considered pay within the meaning of that Chapter. The Authority concluded that incentive awards differed from the kinds of "money-related fringe benefits" referred to in the legislative history (retirement, life and health insurance, etc.) in that those matters, unlike incentive awards, are all statutory entitlements of Federal employees.

Additionally, we reject the Agency's argument that pay and fringe benefits, per se, do not concern "conditions of employment" within the meaning of section 7103(a)(14) of the Statute. Under the Statute, parties are obligated to bargain over proposals concerning conditions of employment, provided that the proposals do not violate law, Government-wide regulation, or an agency regulation for which there is a compelling need. Conditions of employment are defined as personnel policies, practices, and matters whether established by rule, regulation, or otherwise, affecting working conditions. 5 U.S.C. § 7103(a)(14). Matters that are specifically provided for by Federal statute are excluded from the definition of conditions of employment. 5 U.S.C. § 7103(a)(14)(C).

The Authority has applied this basic analytical framework to negotiability questions that are presented to it, including those that concern pay and fringe benefits. For example, American Federation of Government Employees, AFL-CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA 377 (1986) (Chairman Calhoun dissenting) (Eglin). Recently, the Supreme Court upheld the Authority's conclusion that proposals concerning pay and fringe benefits concern "conditions of employment" in circumstances where pay and fringe benefits are not specifically provided for by statute. Fort Stewart. In Fort Stewart, the Court held that the Authority's conclusion that a proposal concerning pay related to "conditions of employment" within the meaning of the Statute was a permissible construction of the Statute. The Court rejected contentions that (1) the term "conditions of employment," which is contained in the Statute, does not encompass pay and (2) statements in the legislative history of the Statute, on which the Agency in this case relies, warrant a conclusion that pay and fringe benefit proposals are not "conditions of employment" under the Statute. Thus, under Fort Stewart and Eglin, matters concerning pay and fringe benefits that are not specifically provided for by statute, but are left to the discretion of the agency, are conditions of employment within the meaning of section 7103(a)(14) of the Statute.

3. Management's Right To Assign Work

The Agency asserts that sentences three and five of Proposal 7 interfere with management's right to assign work by specifically defining duties to be performed by Agency officials. Because we have found that sentence three directly interferes with management's right to determine the budget of the agency and is nonnegotiable for that reason, it is not necessary to address the Agency's contention that it is nonnegotiable for the additional reason that it interferes with the right to assign work.

The only explanation that the Union offers with respect to sentence five is that it is "exactly the same" as the Agency's "proposal." Union reply brief, Proposal 7. As written, sentence five appears to have no purpose other than assigning responsibility to the Personnel Department for providing support to the Activity Head Designees in fulfilling responsibilities relating to performance awards. Proposals that require particular individuals or a particular office to perform a designated duty are nonnegotiable because they violate management's right to assign work. For example, National Federation of Federal Employees, Local 1437 and United States Army Armament Research, Development and Engineering Center, Picatinny Arsenal, New Jersey, 35 FLRA 1052, 1060 (1990). Therefore, we find that sentence five of Proposal 7 directly interferes with the Agency's right to assign work.(13) As discussed in conjunction with Proposal 5, above, matters that are nonnegotiable under section 7106(a) do not become negotiable based on management actions. Consequently, even if sentence five reflects an Agency practice or proposal, that fact, alone, does not make it negotiable.

4. Conclusions

Based on the foregoing we conclude that sentences two and three of Proposal 7 and sentence two of Proposal 10 directly interfere with management's right to determine the budget of the agency and, as the Union has made no assertion that those sentences constitute appropriate arrangements under section 7106(b)(3) of the Statute, they are nonnegotiable for that reason. The remainder of Proposal 10 does not directly interfere with management's right to determine the budget of the agency and is within the duty to bargain. Sentence five of Proposal 7 interferes with management's right to assign work and is nonnegotiable for that reason. In view of these conclusions, it is unnecessary to address the Agency's additional argument that the disputed portions of Proposal 7 are inconsistent with Government-wide regulations.

VIII. Proposal 8

Item 9b(2). Activity Head Designees will approve individual employee quality step increases and one-time performance awards following the parameters shown on the conversion table in paragraph 9f. These officials will ensure that ratings and payouts on individual and/or group efforts are fair and equitable.

A. Positions of the Parties

The Agency contends that this proposal interferes with management's right to assign work by requiring that "Agency Head Designees" approve Quality Step Increases and one-time performance awards. The Agency additionally argues that this proposal does not concern conditions of employment because it concerns "wages and monetary fringe benefits." Agency statement of position at 26.

The Union contends that this proposal paraphrases an Agency "proposal." The Union describes this proposal as modifying the Agency "proposal" to require the Agency to ensure that ratings and awards are fair and equitable as contrasted with simply "encourag[ing] similarity." Union reply brief, Proposal 8.

B. Analysis and Conclusions

It is not clear from the record whether "Activity Head Designee" refers to a specific agency official or simply to whatever official has been designated by the Activity Head. Under either interpretation, the proposal directly interferes with management's right to assign work. Applying the former interpretation, the proposal specifies the particular agency official who will be assigned the tasks specified in the proposal associated with granting Quality Step Increases and performance awards. Applying the latter interpretation, the proposal designates the Activity Head as the official responsible for performing the task of selecting the official who will perform specified tasks related to granting Quality Step Increases and performance awards. The designation of a particular management official to perform specified tasks directly interferes with management's right to assign work under section 7106(a)(2)(B) of the Statute.(14) See, for example, Bremerton Metal Trades Council and Naval Supply Center Puget Sound, 32 FLRA 643, 651-52 (1988); (Naval Supply Center Puget Sound); Patent Office Professional Association and Patent and Trademark Office, Department of Commerce, 29 FLRA 1389, 1390-92 (1987), aff'd sub nom. Patent Office Professional Association v. FLRA, 873 F.2d 1485 (D.C. Cir. 1989).

The fact that the proposal's wording is similar to an Agency "proposal" does not render the proposal negotiable in the face of the Agency's assertion that the proposal conflicts with management's right to assign work. Including the proposal in the parties' agreement would prevent the Agency from assigning the subject tasks to an official different from the one designated by the proposal during the life of the agreement. See, for example, Naval Supply Center Puget Sound. Additionally, as we discussed in conjunction with Proposal 5, proposals that are nonnegotiable under section 7106(a) do not become negotiable based on management actions. See, for example, VAMC, Providence, 32 FLRA at 947.

For the reasons discussed in conjunction with Proposal 7 above, we reject the Agency's argument that wages and money-related fringe benefits do not concern conditions of employment within the meaning of the Statute.(15)

Based on the foregoing we find that Proposal 8 is nonnegotiable because it directly interferes with management's right to assign work and the Union has made no assertion that it constitutes an appropriate arrangement under section 7106(b)(3) of the Statute.

IX. Proposal 9

Item 9d(1). If a G.S. employee within a[n] Activity Head Designee[']s grouping is awarded a Quality Step Increase (QSI) for his/her outstanding rating of record[,] all unit employees within the grouping who receive "Outstanding" ratings of record shall be awarded a QSI within the limits of 5 USC [§] 5336.

A. Positions of Parties

The Agency contends that, because Proposal 9 would establish a requirement that a Quality Step Increase be given, it is inconsistent with 5 C.F.R. § 531.504, a Government-wide regulation. The Agency asserts that the decision to grant performance awards and Quality Step Increases, is a matter that is encompassed within management's right to direct employees and assign work and that this proposal interferes with those rights. The Agency argues that Proposal 9 does not concern conditions of employment because: (1) Quality Step Increases are addressed in 5 U.S.C. § 5336 and, consequently, are a matter specifically provided for by Federal statute and (2) Quality Step Increases relate to pay and monetary fringe benefits.

The Union describes this proposal as only seeking equitable treatment for all employees in an Activity Head Designee's grouping if the Agency decides to award a Quality Step Increase to a GS employee within that grouping and that, based on Authority precedent, proposals for performance awards are negotiable.

B. Analysis and Conclusions

Proposal 9 is nonnegotiable because it is inconsistent with a Government-wide regulation. 5 C.F.R. § 531.504 provides that: "A quality step increase shall not be required but may be granted only to an employee who receives [an outstanding rating]." In National Treasury Employees Union, Chapter 245 and Department of Commerce, Patent and Trademark Office, 30 FLRA 1219, 1224-26 (1988) (Department of Commerce), the Authority found that 5 C.F.R. § 531.504 was a Government-wide regulation within the meaning of section 7117(a)(1) of the Statute. The Authority further found that 5 C.F.R. § 531.504 permits an agency to grant a Quality Step Increase to an employee who meets established criteria but prohibits an agency from establishing a requirement that a Quality Step Increase will be granted and that a proposal establishing such a requirement is inconsistent with that regulation. Id. at 1226.

Proposal 9 requires that a Quality Step Increase be given to all GS employees within an Activity Head Designee's grouping who receive an "Outstanding" rating if one employee in the grouping is awarded a Quality Step Increase. Because Proposal 9 establishes a requirement that a Quality Step Increase be awarded in the circumstances stated in the proposal, it, like the proposal in Department of Commerce, is inconsistent with 5 C.F.R. § 531.504.

We reject the Agency's other arguments. First, in NTEU v. FLRA, 793 F.2d 371 (D.C. Cir. 1986), the court reversed the Authority's conclusion that a union proposal concerning incentive awards conflicted with management's right to direct employees and assign work. The court held that management decisions relating to rewarding superior performance did not affect the rights to direct and assign work under section 7106(a)(2)(A) and (B). In Internal Revenue Service, 27 FLRA at 135, the Authority adopted the court's holding regarding the rights to direct and assign work and held that a union proposal concerning incentive awards did not affect these rights. The Authority has continued this latter approach and consistently held that union proposals concerning incentive awards did not affect management's rights to direct employees or assign work. For example, K.I. Sawyer AFB, 31 FLRA at 1206-07. We reaffirm this approach and deny the Agency's request that we reconsider it.

We also reject the Agency's argument that Proposal 9 is excluded from bargaining under section 7103(a)(14)(C) simply because "Quality Step Increases are addressed in 5 U.S.C. § 5336." Agency statement of position at 29. As we discussed in conjunction with Proposal 2, where an agency has discretion under applicable law and regulation over a matter affecting conditions of employment, the Agency is obligated under the Statute to exercise that discretion through bargaining unless the governing law or regulation specifically limits the exercise of the discretion to the agency. See also, American Federation of Government Employees, AFL-CIO, Local 1931 and Department of the Navy, Naval Weapons Station, Concord, California, 32 FLRA 1023, 1060-62 (1988) (Naval Weapons Station, Concord), reversed as to other matters sub nom. Department of the Navy, Naval Weapons Station, Concord, California v. FLRA, No. 88-7408 (9th Cir. Feb. 7, 1989). The Authority has rejected any interpretation of section 7103(a)(14)(C) that would hold that reference to a particular matter in a statute is sufficient to except that matter from the definition of conditions of employment. Rather, where a statute specifically provides for or establishes a particular aspect of a matter, that aspect of the matter is not included within the conditions of employment about which an agency is obligated to bargain. Id.

Under 5 U.S.C. § 5336 agencies are vested with discretion to grant Quality Step Increases. Proposal 9 effectively seeks bargaining over the Agency's exercise of that discretion "within the limits of 5 U.S.C.[§] 5336." However, Proposal 9 does not seek to negotiate over any aspect of Quality Step Increases that is specifically provided for by 5 U.S.C. § 5336. Consequently, we find that Proposal 9 does not concern a matter that is specifically provided for by Federal statute within the meaning of section 7103(a)(13)(C) of the Statute. See K.I. Sawyer AFB.

Lastly, for the reasons expressed in conjunction with our discussion of Proposal 7, we reject the Agency's contention that Proposal 9 is nonnegotiable because it has no obligation to negotiate over pay and money-related fringe benefits. As we have stated above, pay and money-related fringe benefits are treated the same as other conditions of employment and are negotiable to the extent that the Agency has discretion over them under applicable law and regulation. In view of this conclusion, it is not necessary to address whether Quality Step Increases constitute either pay or a money-related fringe benefit.

Based on the foregoing, we reject the Agency's arguments that Proposal 9 is nonnegotiable because it directly interferes with management's rights to direct employees and assign work and does not concern a condition of employment. Nevertheless, we conclude that Proposal 9 is nonnegotiable because it is inconsistent with a Government-wide regulation.

X. Proposals 11 and 12

[Proposal 11]

Item 9(e)(6). Payment of Awards

(a) Employees shall be considered for performance awards using the percentage amounts shown in paragraph 9f below. (b) When awards are made within a pool[,] the amount (i.e. the percentage of base pay) paid to employees at the same grade level who rated "Outstanding" (O) must be at least 2% of base pay, paid to the "Outstanding" rated employee(s), the amount paid to "Exceeds Fully Successful" (EFS) rated employees must be at least 0.75% of base pay and must be less than that paid "O" rated employees, the amount paid to "Fully Successful" (FS) rated employees shall be at least 0.25% and must be the less than the amount paid to "EFS" rated employees. An exception to the rule is permitted in those cases where an employee has been promoted during the performance appraisal period. In such cases the full payment of a performance award may be restricted to a lesser amount, but no less than 2% of base pay for an employee rated "O" and no less than 0.75% for "EFS" and no less than 0.25% for "FS". In all cases awards will be calculated as a (%) percentage of basic pay rather than as an absolute amount when determining whether the proper relationship between award levels exists.

[Proposal 12]

Item 9f. Rating/Payout Conversion

(1) Payout Conversion Table

RATING  WITHIN
GRADE INCREASE 
QUALITY STEP
 INCREASE (QSI)
 PERFORMANCE
AWARD (PA)1/
% OF SALARY
     
  "O"  FULL  YES  2 - 20% 2/
 "EFS"  FULL  NO  0.75% - 10%
 "FS"  FULL  NO  0.25% - 10%
 MARGINAL  ZERO  NO  ZERO
 UNSATIS-FACTORY  ZERO  NO  ZERO

1/ The payment of Quality Step Increases and/or performance awards is optional, the amount of payment is optional within range shown for performance awards.

[2/] All awards [equal to or greater than] $2000 shall be forwarded to the Incentive awards Committee for review and recommendation to the Commander.

A. Positions of the Parties

The Agency contends that Proposals 11 and 12 concern wages and monetary fringe benefits and that, consequently, the proposals do not concern conditions of employment within the meaning of section 7103(a)(14). The Agency contends that the proposals are nonnegotiable for the additional reasons that they interfere with management's rights to determine its budget because they require the expenditure of funds. The Agency contends also that, for the reasons it expressed in conjunction with Proposal 9, these proposals interfere with management's rights to direct employees and assign work. The Agency asserts that these proposals conflict with Government-wide regulations--5 C.F.R. §§ 430.203, 430.204, 430.206(b), 430.503(c)(1), 430.503(f) and 430.506(a). The Agency contends that these proposals conflict with these regulatory provisions because they "would preclude management from rating employees solely on the basis of performance and would partially usurp managerial authority to establish award amounts." Agency statement of position at 34.

The Union describes the proposals as only specifying procedures to apply in granting awards and contends that in using percentages it is only using the same method as used by the Agency "in establishing the basis of its proposal." Union reply brief, Proposals 11 and 12.

B. Analysis and Conclusions

Initially, we conclude, based on the parties' submissions, that the portions of Proposal 12 concerning Within-Grade Increases are not at issue and, consequently, we do not address those portions of the proposal. Rather, our decision as to Proposal 12 is limited to those portions concerning performance awards and Quality Step Increases.

Proposals 11 and 12 do not mandate the granting of awards. Proposal 11 requires only that employees be "considered" for performance awards. Proposal 12 expressly states that the payment of Quality Step Increases and performance awards is "optional." Thus, rather than requiring that an award be given, the proposals are limited to specifying the type of award that may be given for a particular performance rating and establishing a range based on percentage of salary for determining the amount of performance awards.

For the reasons discussed in conjunction with Proposal 7, we reject the Agency's argument that it has no obligation to bargain over pay and money-related fringe benefits, per se. Thus, even assuming that Quality Step Increases and performance awards constitute pay or money-related fringe benefits,(16) that fact, standing alone, would not render these proposals nonnegotiable.

We also reject the Agency's claim that Proposals 10 and 11 directly interfere with management's right to determine its budget. The proposals do not meet the first part of the Authority's budget test, which was discussed in conjunction with Proposal 7. That is, they do not prescribe the particular programs or operations the Agency will include in its budget or prescribe the amount to be allocated in the budget for them. As to the second part of the budget test,(17) the Agency has failed to provide any information relating to the financial impact of the proposals or the "significance" of that financial impact in relation to the budget as a whole. See Fort Stewart, 110 S. Ct. at 2050 (agency failed to meet "the burden of proof" necessary to establish that a proposal entailed a "significant and unavoidable" increase in costs).

We reject the Agency's argument that Proposals 11 and 12 directly interfere with management's right to direct employees and assign work for the reasons expressed in conjunction with Proposal 9. As noted in discussing that proposal, the Authority has adopted the holding of the U.S. Court of Appeals for the District of Columbia Circuit in NTEU v. FLRA that management decisions relating to rewarding superior performance do not affect management's rights to direct employees and to assign work.

We also reject the Agency's assertion that this proposal conflicts with 5 C.F.R. §§ 430.203, 430.204, 430.206(b), 430.503(c)(1), 430.503(f) and 430.506(a). As noted above, these proposals do not mandate that awards be granted but are limited to establishing the types of awards that may be given and the range for determining the amount of any performance awards given. Thus, there is a critical distinction between these proposals and the proposal before the U.S. Court of Appeals for the Fourth Circuit in The Department of the Air Force, Langley Air Force Base v. FLRA, 878 F.2d 1430 (4th Cir. 1989) (per curiam) (unpublished order). In that case the court reversed the Authority's decision in National Association of Government Employees, Locals R4-26 and R4-106 and Department of the Air Force, Langley Air Force Base, Virginia, 32 FLRA 607 (1988), in which the Authority had found negotiable three proposals requiring that cash awards be given to employees based on their performance ratings. The court's conclusion that the proposals conflicted with the cited regulatory provisions centered on the mandatory nature of the awards proposal. Slip op. at 8-9. (18)

These proposals are also distinguishable from Proposal 2 in Norfolk Naval Shipyard, 37 FLRA No. 79, which the Authority found nonnegotiable because it conflicted with a Government-wide regulation. In that decision the Authority found that 5 C.F.R. § 430.503(c)(1) required that determinations by an official making the initial decision to give awards must be subject to review and approval by an official at a higher level as well as by the official(s) with responsibility for managing the performance awards budget of the agency. We found that because Proposal 2 would require approval of performance awards in situations where, under 5 C.F.R. § 430.503, agency officials are authorized to disapprove those awards, Proposal 2 was inconsistent with that regulation.

Proposals 11 and 12 in this case do not mandate that awards be given, and thus do not nullify the review process required by 5 C.F.R. § 430.503(c)(1). In our view, review and approval necessarily include the discretion to disapprove and, thus, to deprive the reviewing officials of the option of disapproving an award would deprive 5 C.F.R. § 430.503(c)(1) of all meaning. Limiting their discretion to determine the amount of the award given would not have that effect, however. That is, under Proposals 11 and 12, a reviewing official who finds the amount of a proposed award to be inappropriate retains the option of disapproving the entire award. In our view, 5 C.F.R. § 430.503(c)(1) operates to effectively reserve to reviewing officials the discretion to disapprove the decision to give an award but not necessarily to determine the amount of the award. Because Proposals 11 and 12 concern the amount of awards and do not mandate that an award be given, they are not inconsistent with 5 C.F.R. § 430.503(c)(1).

We reject the Agency's contention that these proposals violate the cited regulatory provisions by "usurping managerial authority" to establish award amounts. The Agency cites nothing in the regulatory provisions on which it relies to support a conclusion that agencies are vested with sole and exclusive, or unfettered, discretion to determine the amount of performance awards and no such support for that conclusion is otherwise apparent to us. Therefore, we find no basis for concluding that the "authority to establish award amounts" cannot be exercised through negotiations. As we have stated earlier, where an agency has discretion over a matter affecting conditions of employment, the agency is obligated under the Statute to exercise that discretion through bargaining unless the governing law or regulation specifically limits the discretion to the agency. See, for example, Naval Weapons Station, Concord, 32 FLRA at 1060-62; Customs Service, 21 FLRA 6; and IRS, New Orleans District, 3 FLRA at 759-60.

We also reject the Agency's contention that the proposals would conflict with the cited regulatory provisions by precluding it from rating employees solely on the basis of performance. In our view, the Agency's underlying premise that a proposal that is limited to specifying a range of amounts for awards would inevitably result in supervisors considering factors other than job performance in appraising employees is unfounded. We simply do not see how a proposal of such limited effect would produce that result. We express no view as to how we would rule if the proposal prescribed mandatory awards for particular ratings of record. See note 18 above.

Based on the foregoing we find that Proposals 11 and 12 are negotiable.

XI. Proposal 13

Item 10(c)(1). Removal[,] Demotion and Reassignment

(1) Employees whose performance is "Unacceptable" must be reassigned, removed, or reduced in grade, but only after the employee has had an opportunity to demonstrate acceptable performance as required by USC [§] 4302(b)(6) and CPI 432. The written notice of opportunity period must inform the employee in writing of the "Minimally Successful" (MS) performance standard that he/she must reach in order to be retained in the position. In order for the opportunity period to be a true opportunity period, if the employee requests a transfer to another position, he/she is qualified for in the unit and the employee demonstrates there is a personality conflict between him/her and the supervisor, the opportunity period will be in the new position. If the employee states he/she cannot perform to the minimally successful standard, he/she shall be reassigned/downgraded to another unit position if he/she is qualified and a position is available.

A. Positions of the Parties

The Agency asserts that Proposal 13 interferes with management's rights to reduce in grade or pay and remove employees because it would require the Agency, in certain circumstances, to reassign employees in lieu of immediately reducing them in grade or pay, or removing them. The Agency also argues that by requiring the reassignment of employees, the proposal interferes with management's right to assign employees.

The Union describes the proposal as leaving the Agency free to determine whether a position is available for which the employee is qualified. The Union denies that this proposal interferes with management's rights.

B. Analysis and Conclusions

The right to assign employees under section 7106(a)(2)(A) encompasses the right to make assignments of employees to positions. For example, American Federation of Government Employees, AFL-CIO, Local 987 and U.S. Department of the Air Force, Warner Robins Air Force Logistics Center, Robins Air Force Base, Georgia, 35 FLRA 265, 269 (1990) (Robins AFB). This right entails determining the particular qualifications and skills needed to perform the work of the position, including such job-related individual characteristics as judgment and reliability, and which employees meet those qualifications. Id. Also embodied within the management right are judgments as to the relative qualifications of various employees considered for an assignment. See American Federation of Government Employees, AFL-CIO, Local 738 and Department of the Army, Combined Arms Center and Fort Leavenworth, Fort Leavenworth, Kansas, 33 FLRA 380, 382 (1988); compare National Treasury Employees Union, Chapter 137 and United States Customs Service, Region IV, 34 FLRA 650, 655-56 (1990) (arbitrator's award did not directly interfere with management's right to determine the relative qualifications of employees selected for assignment). Proposals that establish a procedure for selecting an employee for reassignment from two or more employees whom management has determined to be equally qualified for an assignment is negotiable as a procedure under section 7106(b)(2). Robins AFB, 35 FLRA at 270.

The proposal here would require that, under the specified circumstances, an employee whose performance is "Unacceptable" and who has been determined qualified for another available position will be reassigned to it. Neither the proposal, as written, nor the Union's statement of intent acknowledges management's right to determine whether the employee is equally qualified with other employees who might be eligible for assignment to the position. Thus, the proposal does not permit the Agency to determine the employee's qualifications relative to those of other employees, but requires reassignment based on the employee's qualifications standing alone. Therefore, we conclude that Proposal 13 directly interferes with management's right to assign employees and is nonnegotiable. See American Federation of Government Employees, AFL-CIO, National Immigration and Naturalization Service Council and U.S. Immigration and Naturalization Service, 27 FLRA 467, 480-83 (1987). We note that, unlike Proposal 14 in this case, the Union has made no arguments that could reasonably be construed as raising section 7106(b)(3) as an issue in this proposal. In view of our conclusion it is unnecessary to address the Agency's other argument.

XII. Proposal 14

Item 10e(1). Training and Development

(1) Identification of training requirements to improve performance is a significant element in the appraisal process. The performance appraisal process shall clearly identify areas where training and development may be appropriate. Whenever it is determined that an employee's performance is less than "FS" supervisors are responsible for assisting the employee(s) in bringing his/her performance to the "FS" level. This will be accomplished through counseling, and closer supervision. It shall also include on-the-job training and/or formalized training.

(2) Performance appraisals conducted as part of the employee's individual training plan or other specialized training plan will be considered in the annual performance rating process. Such appraisals are categorized as interim appraisals and are not the rating [of] record. (Underlined portions disputed.)

A. Positions of the Parties

The Agency withdraws its contention that the first disputed sentence is nonnegotiable contingent on the understanding that "there is no assumption, implicit or explicit, that an employee's less than Fully Successful performance can necessarily be brought to the Fully Successful level as a result of management assistance." Agency statement of position at 39. The Agency contends that the remaining disputed portion of the proposal is nonnegotiable because it interferes with management's right to assign work. The Agency argues that under that right it retains the "discretionary authority" to determine the appropriate remedial measures to be taken in the face of an employee's performance deficiencies. Id. at 38. The Agency also cross-references the argument that it made in conjunction with Proposal 6 that a proposal requiring that formal training be provided an employee conflicts with management's right to assign work.

The Union describes the proposal as seeking assistance from supervisors for employees faced with the potential "adverse action" of job loss. Union reply brief, Proposal 14. The assistance sought is closer supervision, counseling and training. The Union notes that the proposal does not specify the type of training or the "time and manner" of the training to be given. Id. The Union argues that "[i]n adverse actions training should not be considered as excessive interference in management rights." Id. Additionally, the Union asserts that the first three sentences of its proposal are identical to an Agency "proposal" that provides as follows:

"(1) identification of training requirements to improve performance is a significant element in the appraisal process. The performance appraisal process shall clearly identify areas where training and development may be appropriate. Whenever it is determined that an employees's performance is less than "FS", supervisors are responsible for assisting the employee in bringing his/her performance to the "FS" level. This will be accomplished through counseling, closer supervision, on the job training, and/or formalized training, as appropriate."

Id.

B. Analysis and Conclusions

At the outset, we accept the Agency's withdrawal of its objection to the third sentence of Proposal 14. In this regard, we do not read the proposal, as written, or the Union's statement of intent as requiring that management be held responsible for guaranteeing success from its efforts to assist employees in improving performance.(19) We will not address that sentence further in this decision.

Other than its claim that the right to assign work encompasses the discretionary authority to determine which remedial actions are to be accorded an employee whose performance has been identified as deficient, the Agency offers no support for its contention that the fourth sentence is nonnegotiable. Rather, it focuses on the negotiability of proposals that require that job-related training be given during duty hours. It is the fifth sentence, not the fourth sentence, that addresses training. The Agency does not demonstrate, and it is not otherwise apparent to us, that a provision that simply prescribes counseling and closer supervision as remedial actions for an employee whose performance is deficient directly interferes with the Agency's right to assign work. Consequently, we reject as unsupported the Agency's claim that the fourth sentence directly interferes with management's right to assign work.

As we discussed in conjunction with Proposal 6, the Authority has consistently held that proposals requiring an agency to provide job-related training during duty hours are outside the duty to bargain because the assignment of that type of training constitutes an assignment of work. For example, NAS, Oceana, 30 FLRA at 1111-13. The Union states that the proposal does not specify the "time and manner" of the training to be provided. However, we do not conclude that the proposal is limited to requiring only training that would be conducted while the employee is off duty.(20) As written, the proposal is not so limited and the Union's statement concerning the nonspecificity of the proposal does not amount to an acknowledgment that the proposed training is to be limited to training available while the employee is off duty. In fact, the Union does not deny that the training required by the proposal directly interferes with management's rights but, rather, argues that the interference is not excessive. Because the proposal requires that the Agency provide job-related training during duty hours, it directly interferes with management's right to assign work. Thus, the fifth sentence of Proposal 14 would be nonnegotiable unless it constitutes an "appropriate arrangement" under section 7106(b)(3).

We construe the Union's arguments that the proposal does not excessively interfere with management's rights and its contention that the proposal is intended to ameliorate the possible "adverse action" of job loss that could result from a bad performance appraisal as an assertion that this proposal constitutes an appropriate arrangement within the meaning of section 7106(b)(3).(21) Therefore, we will apply to this proposal the analysis that we use for determining whether a proposal constitutes an "appropriate arrangement" under section 7106(b)(3). See National Association of Government Employees, Local R14-87 and Kansas Army National Guard, 21 FLRA 24 (1986) (Kansas Army National Guard).

As the Union states, the detrimental effects of an adverse performance appraisal can include job loss. Under governing law and regulations, an employee who receives a rating of "Unacceptable" in a critical element is subject to being reassigned, reduced in grade, or removed. See 5 U.S.C. § 4302(b)(6); 5 C.F.R. §§ 430.204(j) and 432.104. An employee who receives a rating of record of less than "Fully Successful" is subject to having a within-grade increase withheld. 5 C.F.R. §§ 531.403, 531.404 and 531.409. As described by the Union, Proposal 14 is intended to provide assistance for employees in improving performance that has been determined to be less than Fully Successful. We conclude that Proposal 14 seeks to address the anticipated adverse effects of the exercise of management's rights to direct employees and assign work as implemented through the performance evaluation process. Consequently, we conclude that the fifth sentence of Proposal 14 constitutes an "arrangement" within the meaning of section 7106(b)(3).

In order to determine whether the proposed "arrangement" contemplated by Proposal 14 is "appropriate" within the meaning of section 7106(b)(3), we must examine whether the negative impact on management's right to assign work is disproportionate to the benefits conferred by the proposal on employees. See Kansas Army National Guard, 21 FLRA at 31-33.

As noted above, the potential impact on an employee who receives a less than Fully Successful performance rating can include denial of a within-grade increase, reduction in grade, and removal. It is axiomatic that these actions are among the most serious that can occur in an employee's Federal career. Thus, the nature and extent of the reasonably foreseeable impact on employees of a less than "Fully Successful" performance rating is severe.

While poor performance is often viewed as entirely within the control of employees, the "fault" is not necessarily entirely that of the employee. We cannot rule out the possibility that the nature and quality of supervision and training provided an employee can contribute to one degree or another to the level of employee performance. We believe that recognition of this fact is implicit in the requirement that appraisal systems must provide for assistance, such as training, counseling and closer supervision, to employees in improving performance determined to be at a level below "Fully Successful." 5 C.F.R. § 430.204(i). Thus, we do not assume that poor performance is a matter that is solely within the control of employees, but acknowledge that management shares some responsibility for assisting employees in attaining acceptable performance.(22) See Shuman v. Department of Treasury, 23 M.S.P.R. 620, 632 (1984) ("an employee who is not given adequate instructions regarding the manner in which she is expected to perform the duties of her position has not been provided with adequate opportunity to demonstrate acceptable performance"). However, we also recognize that employees generally bear the greater share of the responsibility for sustaining acceptable performance.

The management right affected by the proposal is the right to assign work. As written, the fifth sentence of Proposal 14 requires that an employee whose performance has been determined to be less than Fully Successful must be provided training, among other things. While the Agency may retain the discretion to determine the type, time and manner of the training, the proposal requires that some sort of training be provided. Thus, under the proposal, the Agency must provide training even in circumstances where training is not a reasonable or appropriate remedial action for the employee's particular performance deficiency.

Clearly, a requirement that the Agency assist employees in improving their performance is of significant benefit to employees. The Agency also has an interest in assisting employees in improving performance rated at a level below the "Fully Successful" level. If such assistance were of no benefit to the Agency, we do not believe that Congress and OPM would have required that it be given. See 5 U.S.C. § 4302(b)(5) and 5 C.F.R. § 430.204(i). Nevertheless, we believe that an unconditional requirement that a particular type of assistance be given without allowing for consideration of whether, in the particular circumstances involved, that type of assistance is a reasonable or appropriate response to the performance deficiencies involved is, in general, of little benefit to employees in ameliorating a wide range performance deficiencies. Such an unconditional requirement places an unnecessary burden on the Agency.

In our view, the negative impact on management's right to assign work caused by an absolute requirement that training be provided employees whose performance is less than Fully Successful, where that requirement does not allow for consideration of the merits of that particular choice of remedial action in the face of the circumstances involved, outweighs the benefits to be afforded employees. We conclude that the fifth sentence of Proposal 14 excessively interferes with management's rights to assign work. Compare Naval Weapons Station, Concord, 32 FLRA at 1035-37 (provision seeking training for employees whose positions were being eliminated that allowed the agency to determine whether training was needed was found to be negotiable as an appropriate arrangement).

Based on the foregoing we conclude that sentence four of Proposal 14 is within the duty to bargain. Sentence five, however, excessively interferes with the right to assign work and is not negotiable.

XIII. Order

The Agency must negotiate on request, or as otherwise agreed to by the parties, concerning Proposal 2; Proposal 4, sentence one; Proposal 10, sentences one and three; Proposal 11, Proposal 12; and Proposal 14; sentence four.(23) The petition for review is dismissed as it relates to Proposal 3; Proposal 4, sentences two and three; Proposal 5; Proposal 6; Proposal 7; Proposal 8; Proposal 9; Proposal 10, sentence two; Proposal 13; and Proposal 14, sentence five.




FOOTNOTES:
(If blank, the decision does not have footnotes.)
 

1. In an amendment to its original appeal the Union withdrew items 5(g), 6(d)(11), 9(e)(4), 9(e)(5), and 9(e)(6)(c) & (d) from the appeal. Those items are not considered in this decision. In its statement of position, the Agency withdrew its allegation that Proposal 1 (Item 3) was nonnegotiable. Therefore, we will not consider that proposal further.

2. The section numbering of the proposals in this decision duplicates that contained in the Union's petition, as amended. Any apparent inconsistencies simply reflect the Union's submissions.

3. The pages in the Union's reply brief were unnumbered. Therefore, our citations to that reply brief reference the proposal numbers and not page numbers.

Under 5 C.F.R. § 430.206(c) "[r]atings of record . . . shall be reviewed 4. and approved by a person(s) at a higher level in the organization than that of the appraising official."

5. See 5 C.F.R. § 430.202.

6. See, for example, 5 C.F.R. §§ 430.201(a), 430.204, 430.205, 430.206, 430.209.

7. 5 U.S.C. § 4302(b)(1) provides:

(b) Under regulations which the Office of Personnel Management shall prescribe, each performance appraisal shall provide for--

(1) establishing performance standards which will, to the maximum extent feasible, permit the accurate evaluation of job performance on the basis of objective criteria (which may include the extent of courtesy demonstrated to the public) related to the job in question for each employee or position under the system[.]

8. "Performance plan" is defined as "the aggregation of all of an employee's written critical and non-critical elements and performance standard(s)." 5 C.F.R. § 430.203.

9. In its reply brief the Union states that "if the position description does not include accountability over other persons or contractors an employee must not be held accountable for their work." Neither the proposal itself nor the Union's statements support a conclusion that the Union is seeking only to impose a procedural requirement that an employee's position description be amended to accurately reflect work assigned. Rather, as written, the proposal would bar holding employees accountable for work performed by other employees, supervisors, managers, contractors, etc., over which the employee has no control. Compare American Federation of Government Employees, Council of Social Security District Office Locals and Department of Health and Human Services, Social Security Administration, 11 FLRA 608 (1983) (proposal limiting performance appraisal to those duties in employees' position descriptions held negotiable because agency could achieve consistency by amending the position descriptions).

10. The Union does not elaborate on the context of the Agency's "proposal." However, the record indicates that proposals that are the subject of this case arose in the course of negotiations concerning "implementation of the Department of the Navy Performance Appraisal Review System (PARS)." Agency statement of position at 1. Thus, it appears that the Agency "proposal" to which the Union refers is the Agency's proposed Performance Appraisal Review System.

11. We express no view on the continued viability of the second part of the test or on whether the "compensating benefits" portion of the test should include monetary benefits only. See, for example, Norfolk Naval Shipyard, 37 FLRA No. 79, slip op. at 12 n.2.

12. The record does not state precisely what an "Activity Head Designee grouping" is. However, it appears to be some sort of entity within the Agency's administrative and/or operational structure.

13. Chairman McKee and Member Talkin find that this sentence is distinguishable from Provision 3 in VAMC, Milwaukee, 35 FLRA 521, which they found did not violate management's right to assign work. Unlike Provision 3, sentence 5 would appear to have the purpose of identifying the office responsible for performing a specific function. Also, here, the Agency has specifically raised the requirement that a particular office perform designated tasks as a grounds for asserting that sentence five is nonnegotiable.

14. Chairman McKee and Member Talkin note that this proposal is distinguishable from Provision 3 in VAMC, Milwaukee, 35 FLRA 521, based on the fact that in this case the Agency specifically raised the requirement that a particular official perform designated tasks as a ground for asserting that this proposal is nonnegotiable and it appears that this proposal is intended to restrict the Agency in its designation of a particular management official to perform specified tasks.

15. Also, as discussed in conjunction with Proposal 7, we note that the Authority has held that performance awards do not constitute wages, salaries, or money-related fringe benefits.

16. As discussed above, the Authority has held that performance awards do not constitute wages, salaries or money-related fringe benefits.

17. As noted above, we express no view on the continued viability of this part of the test.

18. The Authority has discretion to determine whether to adopt court rulings in subsequent cases raising the same issue, especially when those cases may be subject to review in other circuits. See United States v. Mendoza, 464 U.S. 154 (1984). Because the same issue, mandatory awards, is not present here, it is unnecessary to determine whether we would adopt the court's ruling concerning 5 C.F.R. §§ 430.203, 430.204, 430.206(b), 430.503(f) and 430.506(a) in this case, and we express no view on those aspects of the court's ruling here.

19. In contrast, Proposal 6, as written, establishes the employee's attainment of the Fully Successful performance level as the benchmark for gauging the adequacy of the assistance provided by the Agency to the employee.

20. In fact, for employees who are non-exempt under the Fair Labor Standards Act (FLSA), time spent in training during regular working hours is "hours of work" for purposes of computing overtime compensation entitlement and time spent in training outside regular working hours is considered "hours of work" if the agency directs the employee to participate in the training and the purpose of the training is to improve the employee's performance of the duties and responsibilities of his/her current position. 5 C.F.R. § 551.423.

21. Although the Union did not raise these arguments until its response to the Agency's statement of position, it has been the Authority's practice in such circumstanc