OMB Reinforces Cap on Bonuses


Citing an ongoing “need to manage budget resources carefully,” the White House budget office joined with the Office of Personnel Management on Friday in directing all agency heads to stick with existing limits on individual performance awards.

“Agencies are encouraged to be prudent in their awards spending,” wrote Office of Management and Budget Director Sylvia Mathews Burwell and then-acting OPM Director Elaine Kaplan in a memo that continues a two-year-old policy of limiting total spending on awards to Senior Executive Service and senior-level scientific and professional employees to no more than 5 percent of their aggregate salaries.

The cap is set at 1 percent for other agency employees. Agencywide spending on awards for fiscal 2014 may not exceed levels of fiscal 2012, the memo said, noting that if the ongoing congressional budget talks result in a continuation of sequestration under the 2011 Budget Control Act, then performance awards would be reduced for both categories commensurately.

“Given the current fiscal environment and the budget constraints agencies will operate under in fiscal 2014, it is critical that agencies’ use of performance awards be managed in a manner that is cost-effective and leads to increased employee performance and organizational results,” the officials wrote.

Group awards and awards to acknowledge suggestions for agency improvements are frozen at 2010 levels, and “agencies are encouraged to leverage existing award programs to reward employees who identify improvements that result in documented, validated cost savings and productivity improvements,” the memo said.

The guidance does not apply to political appointees but continues President Obama’s Aug. 3, 2010, memorandum that freezes awards to such appointees in accordance with OPM guidance.

Recruitment, retention and relocation bonuses are not capped, but the guidance directs that such expenditures be confined to 2010 levels. Time-off awards, though not capped, should be used “judiciously,” the guidance said.

In exercising their discretion, agencies are reminded to discuss all awards issues in labor-management forums and honor collective bargaining agreements.

(Image via bikeriderlondon/

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:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


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