Agencies stop tying bonuses to annual appraisals

Fewer federal agencies are giving employees bonuses on the basis of their annual performance evaluations, instead rewarding outstanding performance through group awards and on-the-spot cash incentives, according to a new report.

The report, issued by the Office of Personnel Management, said many agencies are "delinking awards and performance appraisals." An OPM spokeswoman said that means agencies are linking awards "more to specific work or specific activities. By separating awards from the annual performance review process, it tends to send a message about what work is more meaningful," she said.

In a 1999 survey, only 31 percent of federal employees agreed that recognition and rewards are based on merit. Only 26 percent said their agencies clearly define "good performance."

According to OPM, the average annual performance rating for federal employees rose throughout the 1990s. Most federal workers are now ranked in the top two tiers ("exceeds fully successful" or "outstanding") of the standard five-tier performance appraisal system.

In its report, "Incentive Awards: The Changing Face of Performance Recognition," OPM reviewed 15 agencies' performance management systems. OPM had looked at each of the agencies in 1996 and 1997 and wanted to see what changes the agencies have made since then.

In addition to delinking awards and appraisals, agencies are increasingly using Web-based systems to administer recognition programs. Some agencies have reformed their incentive programs more than others.

The Commerce Department, for example, rewrote its performance management handbook last year and created an online system that allows managers to nominate employees for awards via the Web. The department has also boosted the amount of its on-the-spot awards, known as "Cash in a Flash," to $1,000.

The Veterans Affairs Department lets employees help decide who should receive time-off, on-the-spot and other awards.

Managers at several agencies must wait until the end of the year to reward excellent employees because incentive budgets are not set until late in each fiscal year.

The Army, the Justice and Treasury departments, and the National Archives and Records Administration reported that they have not made major changes to their incentive programs in recent years.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.


When you download a report, your information may be shared with the underwriters of that document.