Limits on cash awards to federal employees loosened
WASHINGTON — Federal employees have received something of an early holiday present, as the Obama administration has boosted by half the amount that agencies may pay in awards for performance or special accomplishments.
A memo dated last week allows agencies to pay to employees below the senior levels awards equaling up to 1.5 percent of their total salaries for such positions, up from a 1 percent cap the administration imposed in 2011.
Awards programs are "valuable tools to help agencies reward employee performance excellence and reinforce a high-performing culture that will help improve organizational effectiveness," said the joint memo from the Office of Management and Budget and Office of Personnel Management.
It added that agencies should "continue to exercise the authority to provide recognition responsibly."
The 2011 policy, issued during a deficit-reduction effort, also had capped at 2010 levels spending on recruitment and retention incentive payments for high-demand occupations and on suggestion awards, among others.
"While there is no cap set for other awards and bonus programs falling outside of individual performance and individual contributions awards, agencies should continue to use these other programs judiciously and in compliance with applicable regulations," the memo said.
According to OPM, 45 percent of employees below the senior levels received an individual performance-based cash award in 2014, averaging nearly $1,000. Three percent received group-based performance awards averaging about $500, and 21 percent received cash awards for individual special accomplishments averaging about $700.
The total cash value of those three types of awards came to more than $1.2 billion, about 0.8 percent of salary for those positions in that year.
OPM and OMB earlier had raised the cap for awards to career Senior Executive Service members and career employees in other senior level positions from 5 percent to 7.5 percent of salary for those positions.
A separate ban on awards to political appointees remains in effect.
Performance-based awards for career employees are based on job ratings, most commonly done on a five-level scale. According to a Government Accountability Office report in June, of employees below senior levels, 38.6 percent were rated in 2013 at the top level, outstanding, 35.1 percent as exceeds fully successful, 25.5 percent as fully successful, 0.4 percent as minimally successful, and 0.1 percent as unacceptable.
According to a separate OPM report from September, 48.8 percent of the 6,500 career executives were rated as outstanding in 2015, another 41.4 percent as exceeds fully successful, 9.4 percent as fully successful, and 0.3 percent as either minimally successful or unacceptable. The average performance awards for those at the top three levels were about $12,000, $9,000 and $8,400, respectively.