OPM asks agencies to review use of some bonuses

Office of Personnel Management Director John Berry has directed agencies to review their use of recruitment, relocation and retention incentives to make sure such payments are effective.

"These are important tools to support the civilian workforce, but we also must ensure this money is being used effectively," Berry wrote in a May 27 memorandum to chief human capital officers and agency human resources directors. "The cost of using any of these pay flexibilities should be weighed against the benefits to be gained."

Currently, agencies are required to review retention payments on an annual basis, but not relocation or recruitment bonuses. The OPM chief asked agencies to review all three types of incentive payments annually and adjust their policies accordingly.

Berry's directive drew praise from John Palguta, vice president for policy at the nonprofit Partnership for Public Service.

"Any flexibility, including the flexibility to provide recruitment, relocation and retention incentives, can be put to very good use, but any freedom has to have a balance," Palguta said. "There's not enough money to throw at every issue we have."

Berry's announcement was particularly timely, Palguta said, because the economic crisis has made government employment much more attractive and increased the number of applicants for federal jobs.

Agencies that paid recruitment bonuses to compensate candidates for taking a pay cut to work for government might no longer have to do so because federal jobs are more stable and offer better benefits than those in the private sector, Palguta said. A survey conducted in late 2008 by the Partnership showed that students named government and public service work as their top career choices.

Berry noted in the memo that President Obama in April asked his Cabinet secretaries to review their operations for both efficiency and effectiveness. In 2007, agencies spent $207 million on recruitment, relocation and retention bonuses, with $127 million going to retention bonuses.

Palguta said that if reviews determined that those bonuses were no longer necessary for agencies to meet their human capital needs, it would free up money for other priorities such as training and development programs. During a meeting with reporters on Wednesday, Berry said one of his priorities was developing significantly stronger training programs for managers as part of a governmentwide effort to reform the federal pay system.