Section 2: Performance Management System Performance Awards

Paragraph

1. Purpose
   
2. Authority and References
   
3. Definition
   
4. Coverage
   
5. Appraisal Period
   
6. Exclusions
   
7. Performance Awards
   
8. Funding for Performance Awards
   
9. Procedures
   
10. Documentation, Records and Reports
    
11. Exceptions and Waivers

1. PURPOSE. To establish the policy and procedures for the Federal Highway Administration's (FHWA) Performance Awards program under the Performance Management System (PMS), as authorized in Title 5, Code of Federal Regulations (CFR), Part 451. Information concerning the Incentive Awards program can be found in FHWA Personnel Management Manual (PMM) Chapter 9, Section 1.

2. AUTHORITY AND REFERENCES.
   1. Public Law (P.L.) 103-89,

   2. Title 5, United States Code (U.S.C.), Chapters 43, 45, 53, and 55,

   3. Title 5, CFR, Parts 293, 430, 451, and 532,

   4. Department of Transportation (DOT) Departmental Personnel Manual (DPM) Letter 430-4, dated October 12, 1995, Department of Transportation Performance Management Framework, as amended, supplemented, or superseded, and

   5. FHWA PMM Chapter 5, Section 2, Performance Evaluation, Performance Management System.

3. DEFINITION. A Performance Award under the PMS is a lump-sum cash payment granted to an individual employee serving in a PMS position based on his or her current rating of record as authorized by 5 U.S.C. 4503 and 4302.

4. COVERAGE. The PMS shall apply to all General Schedule employees grades 15 and below, all prevailing rate (Wage Grade) employees regardless of grade, former Performance Management and Recognition System (PMRS) employees covered by P.L. 103-89, and other employees not excluded as specified in 5 U.S.C. 4301(2) including student aids and temporary employees serving under appointments exceeding 120 days.

5. APPRAISAL PERIOD. The PMS performance appraisal period is normally 12 months. The minimum period for which performance may be appraised is 90 days. The FHWA PMS performance appraisal period is from October 1 through September 30 each year.

6. EXCLUSIONS. Performance Awards are separate and distinct from Superior Accomplishment Awards. Superior Accomplishment Awards are authorized by 5 U.S.C. 4506 to reward employees for superior or especially meritorious suggestions, inventions, accomplishments or special acts. For information on Superior Accomplishment Awards, refer to PMM Chapter 9, Section 1.

7. PERFORMANCE AWARDS. All eligible PMS employees receiving a current rating of record of either "Outstanding" or "Meets or Exceeds Requirements" may be granted a Performance Award, based on the recommendation of their supervisor and the approval of their Performance Awards Pool Manager. The performance award may be granted at any time during the year, provided that it is within 12 months of the current rating of record, and is based on sustained superior achievements accomplishing performance objectives of the position, as documented in the performance plan, for at least the minimum rating period (90 days).

8. FUNDING FOR PERFORMANCE AWARDS.
   1. Funds for Performance Awards to be paid in a given fiscal year shall be computed for each organization based on the PMS employee population payroll in effect on September 30, which is the last day of the rating period (as well as the last day of the previous fiscal year).

   2. At a minimum, there will be individual Performance Award pools within the FHWA for: the Office of the Administrator and Washington Headquarters Staff Offices (including the Offices of Civil Rights, Public Affairs and Program Quality Coordination); the Office of Chief Counsel; the Intelligent Transportation Systems (ITS) Joint Program Office; each Associate Administrator; each Regional Administrator; the Federal Lands Highway Office; and Career Training Programs. Within these organizations, unit managers may further delegate the management of Performance Award pools, and may officially define Performance Award pools at lower organizational levels.
      (1) Official designation as Performance Award pools should be reserved for organizational levels with a sufficient number of employees to ensure a reasonable Performance Awards budget, such as the division level in the field and the office level in Washington Headquarters. Performance Award pools may also consist of mixed organizational levels (for example: a regional office and several small divisions making up one pool, the larger divisions in the region being designated as separate pools).

      (2) Each organization will report its official Performance Award pool designations to the Office of Personnel and Training by August 31 each year, so that performance award funds for the following fiscal year may be computed, and pools may be documented as required. Performance awards funds computed for one organization will not be transferred to another.

   3. Each performance award pool will be funded at no more than 1.4 percent of the estimated amount of covered PMS employees' basic pay for the fiscal year. Each performance award pool may be funded at a percentage lower than 1.4 percent in order to meet any limitations established by the Office of the Secretary or the Office of Personnel Management for the funding of general pay increases, within-grade increases, and performance awards. Other funding limitations may be set by the DOT Appropriations Act. The same funding percentage will be applied to all pools within FHWA in a given fiscal year.

   4. The salaries of all PMS employees on intermittent tours-of-duty who are ineligible to receive performance awards are excluded from the performance awards pool funding. The salaries of all PMS employees on intermittent tours-of-duty who are eligible to receive performance awards are included in the performance awards pool funding. Eligibility for performance awards is determined in accordance with paragraph 9a of this directive.

9. PROCEDURES.
   1. After the PMS employees in an award pool have been assigned a rating of record for the PMS appraisal period, a determination may be made as to their eligibility for a performance award. The following PMS employees will not be eligible for Performance Awards:
      (1) employees receiving a rating of Fails to Meet Requirements;

      (2) employees not occupying a PMS position on September 30, the end of the PMS rating period;

      (3) employees on leave-without-pay (LWOP) or in a non-pay status during the rating year and who were not in a pay status for at least the minimum 90 day appraisal period;

      (4) employees newly appointed to the Government within 90 days of the end of the appraisal period; and

      (5) employees who for any other reason could not be rated under the PMS performance appraisal system.

   2. All eligible PMS employees may be considered for a Performance Award based upon individual performance, and a determination will be made of whether a Performance Award will be granted, and the amount of any such award, as follows:
      (1) an employee with a rating of record of "Outstanding" or "Meets or Exceeds Requirements" may be granted a Performance Award not exceeding 10 percent of the employee's annual rate of basic pay, upon the recommendation of the supervisor and the approval of the pool manager. Whether a Performance Award is granted is at the discretion of the supervisor and the pool manager. There is no entitlement to a performance award, regardless of the rating of record.

      (2) in rare instances reflecting extremely unusual performance, the Federal Highway Administrator may review and approve employees for larger awards based on unusually outstanding performance. These awards may exceed 10 percent but no more than 20 percent of their annual rate of basic pay. Such an award requires a thorough award justification, and only employees who receive ratings of Outstanding can be considered for Unusually Outstanding Performance Awards. In those rare situations where such an award is considered, the supervisor should consult the Office of Personnel and Training (HPT-23) at the end of the rating cycle for further guidance. Any Unusually Outstanding Performance Award which is granted (less an amount equal to 5 percent of the employee's basic pay, which is assessed against the employee's specific award pool for an Outstanding performance award) will be paid from FHWA's overall award pool. The remaining funds in the FHWA award pool will then be allocated to each individual award pool on a pro-rata basis.

   3. Award amounts based upon individual performance will be determined by the supervisor and the pool manager. The determination will be based upon the supervisor's assessment of the value of the employee's work accomplishments during the rating year, relative to the goals of the organization, the grade level of the position, the impact on mission accomplishment, and the relative contribution of other employees in the unit. There is no prescribed method for determining award amounts, nor any requirement for consistency in award amounts for similar ratings within the same grade level. Maximum discretion is left to the supervisor and the pool manager, as long as the basis for an award determination is job-related and is documented on the Performance Award Nomination Form, FHWA-1552A or elsewhere on the Performance Appraisal Form, FHWA-1552. The pool manager is responsible for approving all performance award amounts, and making any adjustments necessary to stay within the approved funding for the Performance Award pool.

   4. Under certain circumstances, pool managers may set aside a portion of the Performance Award budget for the unit to recognize Team Performance Awards. This provision may be used when the unit is formally organized in teams, the work is structured in an interdependent fashion, and the team evaluation features of the performance appraisal system are used. Use of Team Performance Awards is limited to units and employees who identify team performance objectives in their performance plans, and are rated against the team rating factors on the appraisal form. The set-aside provision should be limited to that portion of the award pool computed from covered salaries of employees actually eligible for Team Performance Awards. Within that subpool, the set-aside percentage should be determined, subject to the approval of the pool manager, based upon the relative importance and preponderance of team versus individual performance objectives.
      (1) Any organization planning to use this Team Performance Award provision should develop and coordinate with the Office of Personnel and Training (HPT-10) a plan for approving and distributing Team Performance Awards. The plan should ideally be implemented and communicated to affected employees at the beginning of the rating period, but no later than 90 days prior to the end of the appraisal period.

      (2) The use of this provision is optional, and is not required under any circumstances, regardless of how the unit is organized or the work structured.

   5. DOCUMENTATION, RECORDS AND REPORTS. The Official Personnel Folder (OPF) must include the Performance Award documentation for PMS employees. All performance ratings of record and award determinations will be entered into the Integrated Personnel and Payroll System which will generate a Notice of Personnel Action (Form SF-50) to document the Performance Award. Performance Awards that exceed 10 percent of an employee's basic rate of pay shall have the performance appraisal and additional justification for the award placed in the employee's Employee Performance File.

   6. EXCEPTIONS AND WAIVERS.
      1. Organizations may request exceptions to the provisions of this chapter, or waivers of specific requirements under this chapter. Requests will be approved or denied by the Director, Office of Personnel and Training, with the concurrence of the Executive Director. Exceptions or waivers may be for such purposes as, but not limited to, pilot testing new approaches which show promise for improved results, or for meeting local conditions that cannot be accommodated under the existing provisions of this chapter.

      2. Requests for exceptions to or waivers from the provisions of this chapter should be submitted to the Director, Office of Personnel and Training, and should include justification for the proposed exception or waiver, a description of the time frames for which the exception or waiver would apply, and an evaluation plan for assessing the results. Additional information may be requested as needed.

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