OMB, OPM to Limit Fed Employee Bonuses

The government is limiting the amount agencies can spend on performance bonuses for employees and a freeze of all bonuses for political appointees in an effort to curb government spending, according to a memo by Office of Personnel Management Director John Berry and Federal Chief Performance Officer Jeff Zients.

Agencies must cap total spending on awards to senior-level employees to five percent of the aggregate pay the agency spends on those positions. The amount for all other employees will be capped at one percent using the same formula that is based on numbers from fiscal year 2010.

“In many cases, awards are broadly and inconsistently allocated and some Federal employees have come to expect awards as part of their compensation,” Berry and Zients wrote. “At the same time, recent survey results show that a large number of both agency managers and employees do not perceive the current employee performance management/award systems to be fair or accurately reflect differences in performance levels.”

“Agencies are encouraged to leverage existing award programs to reward employees who identify improvements that result in documented, validated cost savings and productivity improvements. An emphasis on awards of this nature is particularly important in light of the fiscal challenges we are facing,” the memo continued.


Full memo and FAQ.

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