As America’s director of national intelligence, Mike McConnell is seeking to use corporate pay-for-performance methods to help attract candidates to the burgeoning intelligence community — whose members are found across 16 federal agencies. He comes by the approach naturally, from the 11 years he spent at consultancy Booz Allen Hamilton before taking the key intelligence post early last year.

At a recent press briefing, McConnell described provisions of this new National Intelligence Civilian Compensation Program (NICCP), which will cover untold thousands of government employees. Indeed, the size of this intelligence community is untold. It is classified information. In addition to covering employees within the Central Intelligence Agency, the Federal Bureau of Investigation, the Defense Department, and the armed services, though, the plan will serve personnel from the departments of State, Treasury, Energy, Homeland Security, and from the Drug Enforcement Administration, the National Geospatial-Intelligence Agency, the National Reconnaissance Office, and the National Security Agency.

While pay for performance is hardly a novel concept in Corporate America, compensation for most federal employees is the product of a tenure-based system born at the end of World War II. The new method, says McConnell, will improve recruitment and retention of the nation’s intelligence analysts, and attract a better workforce.

“Think of it as a merit-based system that rewards high performers,” he said during the briefing. “It has the flavor of the private sector in that you get superior performance. One of the ways that it’s often described is that you get the behavior that you reward.”

To plan the program, McConnell created an advisory board that will recommend salary ranges for intelligence analysts at each of the agencies. It will then be up to directors of the 16 operations to carry out those recommendations and agency supervisors to set basic rates of pay and expected performance intelligence analysts should meet. The program follows a basic performance-based compensation approach, for which agency supervisors would manage employee performance, set expectations, provide feedback, and eventually rate workers based on how the year’s performance matches expectations.

With half the intelligence community’s civilian workforce tenured less than five years, McConnell and Ronald Sanders, his chief human capital officer, argue that the NICCP is an efficient choice. Drawing from his corporate experience, McConnell said that he looked to programs enacted at Booz Allen when designing the NICCP. McConnell joined Booz in 1996, after previous stints as a Navy admiral and as director of the National Security Agency.

“It actually became a competitive advantage of the company,” he said. “We would share information and coordinate across boundaries…. We also had a process that recognized superior performance.”

The intelligence community’s inability to attract and retain talented minds from Generation Y has also been a top concern. Intelligence officials hope that the new system will help attract and retain younger members of the workforce, who demand fast-tracking in exchange for performance, and that it will also hold poor performers accountable.

A recent survey of intelligence employees conducted by the intelligence community revealed that accountability is a rare feat. Only 28 percent of civilian employees said they feel that steps are taken to hold poor performers accountable, and only 28 percent think that their pay is linked to their performance.

Booz Allen, a strategy and technology consulting firm, recently said it would sell its U.S. government and global commercial businesses to private equity firm Carlyle Group for $2.54 billion. The deal, which would split the consultancy in two, is expected to close in mid-late 2008.

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