Federal agencies should more tightly target performance awards for SES members and senior level/senior scientific and technical employees, OPM and OMB have said in a joint memo.
Memo M-16-22 is the latest in a series of guidance carrying out a late 2015 executive order revamping policies for SES, SL and ST employees, including setting a general cap of 7.5 percent of salary for such employees to be used for performance awards and 1 percent to be used for individual contribution awards.
Regarding performance awards, the memo says, “agencies should allocate awards made under the new recommended limit to be able to reward and retain more top performers by providing substantial monetary awards for the very best SES and SL/ST performers; and, allowing more variance of award amounts among rating levels, which is a common attribute of pay-for-performance systems.”
While the specific impact might not be known until the next ratings cycle is finished, it adds, agencies “should start discussing the philosophy of how the agency expects to apply the new 7.5 percent limit, solicit input and ideas, and generally communicate what changes can be expected.”
The memo also encourages agencies to “use all authorized categories of awards, as appropriate, to recognize the accomplishments of their executives throughout the year, including time-off and individual contribution awards (e.g., special act, suggestion, invention, etc.).” These can be used to recognize contributions toward an agency’s mission even by employees not rated at the highest levels, although such awards are not to be used as a “substitute or an enhancement” of performance-based awards, it adds.
