Gov Career

By Phil Piemonte

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The incredible shrinking bonus

As you probably have heard by now, the Obama administration has drawn a line in the budgetary sand that caps the total amount agencies can spend on individual performance awards.

According to guidance in a memo issued by the Office of Personnel Management and the Office of Management and Budget, the total an agency can spend for individual performance awards for its senior executive service, senior-level, scientific, and/or professional employees can be no more than 5 percent of those employees’ aggregate salaries. For all other employees, including General Schedule employees, it can be no more than 1 percent of those employees’ aggregate salaries.

In other words, for SES employees, for example, all their bonuses added together cannot exceed 5 percent of all their salaries added together. The cap, effective immediately, applies to fiscal 2012 as well.

At the same time, there is “there is no cap on the percentage of employees receiving awards or the number of individual awards granted,” according to the memo. And, as the memo states: “Like the overall number of awards, no specific limit is being placed on the amount of any single individual award.”

Translation: A lot of people could get small awards, a few people could get big awards, or some combination of those two. And while the most equitable thing would apply the same level of restraint across all the individual awards, that might be too much to wish for in the real world.

With the federal pay climate the way it is, one thing is clear: Those who hold the purse strings on these awards will have to exercise some careful decision-making in the months ahead.

But even if the awards end up being distributed as fairly as possible, the bonus cap—like other recent federal austerity measures—may end up begin just one more thing to deter the best job candidates from choosing a federal career.

Posted by Phil Piemonte on Jun 14, 2011 at 4:02 PM

Reader comments

Tue, Jun 21, 2011

This truly will not have an effect on my branch. They never give awards. 22 years and nobody ever received award. I would be ashamed to be branch chief.

Thu, Jun 16, 2011 Ammo Joe

We're all screwed if he get's another four years.

Thu, Jun 16, 2011 SG

So, let me see if I understand this. The SES employee can get no more than 5% of his salary..and mid level SES annual salary is about $165,300. I won't swear my math skills are great but that appears to be over $8200. And the rest of us, averaging $50,000 per year, get 1% or maybe $500? While it's not small amount, it's hardly comparable to the 5% the SES receives (or can receive). I don't want to hear that they deserve the bigger bonuses because of their grades - if not for the lower graded employees, they wouldn't be able to accomplish their jobs.

Wed, Jun 15, 2011

It's too bad that the lower grade employees get nothing, but Upper Management get retention bonuses, performance awards, incentive awards and the highest grades. They forget who makes them look good !!! How about sharing the loaf of bread.

Wed, Jun 15, 2011

Performance Bonus? What's a bonus? Haven't ever heard of anyone I know of getting one. Must be all the higher ups getting them because the lower level doesn't. Or maybe I'm just a common dirtbag that comes to work on time every day, works all day long with a 1/2 lunch break, then goes home only to repeat this cycle Mon - Fri. that doesn't really count in the grand scheme of things.

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