Workforce Wonk

By Alyah Khan

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Obama weighs cap on federal employee bonuses

Federal employees who were concerned about President Barack Obama’s decision last November to freeze their pay for the next two years might have something new to worry about.

According to an undated draft memo obtained by the Washington Post, senior Obama administration officials are directing agency leaders to cap bonuses for Senior Executive Service employees at 5 percent of aggregate salary and non-SES employees at 1 percent.

John Berry, director of the Office of Personnel Management, and Jeffrey Zients, chief performance officer and deputy director for management at the Office of Management and Budget, wrote the memo on restricting individual performance awards in 2011 and 2012, citing the need to “manage budget resources carefully.”

The memo states that when Obama made the decision to freeze employee pay, he asked OPM and OMB to evaluate the cost and effectiveness of the government’s system for performance awards and incentives. The review identified a number of “concerning trends,” including employees viewing awards as entitlements, Berry and Zients wrote.

The revelation troubles federal employee groups, according to a report by Charles Clark in Government Executive.

William Bransford, general counsel of the Senior Executives Association, said in that article, "our concern is that it not last more than two years." Also in the GovExec article, John Gage, president of the American Federation of Government Employees, said "The whole deficit reduction thing is like lemmings over the cliff, and I think cutting working people's pay, even if it's SES, is wrong."

The draft memo, which the Post published May 17, also appears to override the policy Berry outlined in a Dec. 30, 2010, memo. In that memo, Berry said the president’s two-year pay freeze would not extend to “performance awards and bonuses; recruitment, relocation, and retention incentives; and premium payments such as overtime pay.”

OMB has so far declined to comment on the leaked memo. But as a number of legislative proposals targeting the size and pay of the federal workforce await congressional action, could the proposed cap on bonuses further damage feds' morale?

What are your thoughts on capping employee bonuses? Do you think the federal government’s performance award system is fair? Why or why not?

Posted by Alyah Khan on May 20, 2011 at 8:32 AM

Reader comments

Tue, Nov 15, 2011

Since the greedy union took over the way bonuses were given it has been nothing but crooked. When I retired 15 years ago from Social Security, you nominated yourself for a bonus and, whether or not your work performance merited it, you got it. No consideration given to your ability to perform your job and no input by your supervisor. Just tell "them" what you wanted a check was in the mail. I have no idea if this is still the practice.

Thu, Aug 4, 2011

Politicians make me sick. Like this is going to solve our $14T deficit. Why do Democrats always want to redistribute wealth? It's hard enough for federal agencies to retain good employees. Every day they're looking for ways to screw these people. If it's not COLA it's step increases or eliminating pensions or bonuses. It will probably be their running headline during re-election "stop wage abuse in the government! elect me!". Considering everyone is unemployed, it's a sure winner.

Mon, Jun 27, 2011

Any cap on bonuses should preserve the ability of management to reward higher performers; if the award pool is capped at 1%, then allow individuals to recieve NTE 2%--that way the bonus can be steered toward producers. If they cap the individual bonus at the same size as the pool, then it's only a punishment tool (i.e., can't take from one and reward to the other)

Tue, Jun 21, 2011 PA

Just another disappointment in the current administration. What does congress and the executive branch sacrifice? It's great to define sacrifices when you aren't impacted.

Tue, Jun 21, 2011

I totally agree to remove the SES 5% percent bonus. They absolutely make too much money. Allow blue collar employees to get their bonuses and cost of living increases. We deserve every penny of it for our hard work & dedication.

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