Performance
Awards (Rating-Based Awards) FAQs
Performance awards (or rating-based awards) are
lump-sum cash awards given to recognize performance as
reflected in a rating of record. Some frequently asked
questions about performance awards include:
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What
is a performance award? |
| Performance awards are lump-sum cash awards
based on ratings of record of Level 3 (Fully Successful or equivalent)
or higher. Rating-based performance awards are included among the various
types of awards available under part 451 of title 5, Code of Federal
Regulations. Agencies can use the rating of record as the sole basis for
granting a performance award. |
 
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|
Can
agencies not covered by part 430 of title 5, Code
of Federal Regulations, pay performance awards? |
| Yes. The provision
at section 451.104(a)(3) of title 5, Code of
Federal Regulations (CFR), regulates the
statutory authority to pay performance-based cash
awards by specifying the use of a rating of
record under the provisions of 5 CFR 430 as the
sole justification for such an award. However,
since the statutory authority permits any agency
to pay a performance-based cash award to a
General Schedule employee based on a rating of Fully
Successful or better, agencies that are not
covered by the provisions of 5 CFR 430 can still
use their official agency performance rating as
the justification for the award. |
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|
Under
a "pass/fail" appraisal program, is any
employee who receives a "pass" rating
eligible for a cash performance award? |
| Technically, yes. A
"pass" rating in a two-level appraisal
program is a Level 3 (Fully Successful or
equivalent) summary level. The law at section
4505a of title 5, United States Code, which
covers General Schedule employees, states that
"an employee whose most recent performance
rating was at the Fully Successful level
or higher (or the equivalent thereof) may be paid
a cash award." Eliminating the higher
summary levels also eliminates the further
performance distinctions that many agencies had
applied in granting rating-based performance
awards. Although not required, it was not
uncommon for agencies to restrict the use of
rating-based awards to employees with ratings of
record above Level 3. Under a two-level appraisal
program, agencies need to develop additional
criteria for selecting employees who should
receive cash performance awards and for granting
awards of different amounts. Technically,
agencies will be free to continue to use just a
Level 3 rating of record as the legal
criterion for granting a cash award. However, the
Office of Personnel Management advises agencies
to make some record of the additional performance
distinctions they make to select award recipients
and thereby prevent perceptions of awards being
arbitrary or capricious.
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Are
rating-based performance awards subject to the
$10,000 and $25,000 approval thresholds? |
| Yes. Under sections 4502(a) and (b) of title 5,
United States Code, and the implementing regulations, such awards always have
been subject to the Office of Personnel Management and Presidential approval,
respectively. Section 4505(a), of title 5, United States Code, further
restricts performance awards to no more than 10 percent of the employee's
annual rate of basic pay, excluding any locality-based comparability payment,
except that a rating-based award may exceed 10 percent if the agency head
determines that an employee's exceptional performance justifies such an award.
However, in no case may a rating-based award exceed 20 percent of the employee's
annual rate of basic pay, excluding locality-based comparability payments. |
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|
Will
an agency be able to grant a performance award
for a non-recurring contribution? |
| Performance awards,
as the terminology is used, refer to cash awards
granted on the basis of the rating of record,
which generally summarizes the employee's
performance over an extended period of time,
i.e., the full appraisal period. The more
important flexibility now in the regulations is
that the contribution that may merit a special
act or service award is no longer defined as a
"non-recurring" contribution. This new
flexibility should make it easier for agencies to
design award programs that recognize the
successful or improved accomplishment of work
projects that by their nature can be considered
"recurring contributions." |
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