Feds’ bonuses to grow slightly in 2017, after 6-year freeze

Many federal employees will have a little something extra to be thankful for next year.

After a six-year freeze, agencies are getting approval to raise their limits on spending for employee awards in fiscal 2017.

The boost is a slight one, but agencies can now spend up to 1.5 percent of aggregate salaries for all non-Senior Executive Service employees at the end of the year on rating-based performance awards and individual contribution awards. The previous limit was just about 1 percent.

“The Office of Personnel Management and the Office of Management and Budget recognize that awards programs are valuable tools to help agencies reward employee performance excellence and reinforce a high-performing culture that will help improve organizational effectiveness,” OMB Director Shaun Donovan and OPM acting Director Beth Cobert wrote in a Nov. 22 memo.  “Agencies should communicate to their managers and supervisors the important role that awards can have in recognizing and rewarding results and exceptional service to American citizens.”

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The caps apply for awards given to employees between Oct. 1, 2016 and Sept. 30, 2017.

The latest guidance only applies to non-SES, senior level and senior professional or scientific employees, including those on the General Schedule or wage grade. It does not apply to political appointees, as President Barack Obama’s 2010 freeze on discretionary awards and bonuses spending will continue, the memo said.

It also does not apply to SES members or senior level and senior professional and scientific employees. OMB and OPM in August directed agencies to raise their spending limits on performance awards for those senior executives. Spending on those bonuses rose by nearly 3 percent.

Caps on awards spending had been frozen since 2010, when governmentwide budget cuts forced the Obama administration to put a hold on pay and performance awards and incentives.

Donovan and Cobert also reminded agencies to consider any collective bargaining obligations or agreements that they’ve made before this memo was issued.

Recognizing a governmentwide shortage in cybersecurity talent, OPM in January gave agencies permission to break a five-year freeze on spending for recruitment, relocation and retention (3R) incentives. The administration then recognized that agencies may need to offer more monetary incentives to attract top cyber talent to fill several thousand positions.

Department chief human capital officers and human resources directors at the time had to describe what critical needs they wanted to fill and how additional resources would help them address those gaps.

That January 2016 guidance no longer applies, OMB and OPM said, because the 2010 spending limits no longer apply.

“While there is no cap set for other awards and bonus programs falling outside of individual performance and individual contribution awards, agencies should continue to use these other programs judiciously and in compliance with applicable regulations,” the memo said.