[Federal Register Volume 71, Number 119 (Wednesday, June 21, 2006)]
[Proposed Rules]
[Pages 35561-35562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-9797]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 71, No. 119 / Wednesday, June 21, 2006 / 
Proposed Rules  

[[Page 35561]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 451

RIN 3206-AL06


Awards

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management is issuing proposed 
regulations regarding the employee awards program. These revisions 
clarify the use of performance-based cash awards by providing that such 
awards programs, as designed and applied, must make meaningful 
distinctions based on levels of performance. This proposed change is 
designed to ensure that better performers receive greater recognition.

DATES: Comments must be received on or before July 21, 2006.

ADDRESSES: Send or deliver written comments to Jerome D. Mikowicz, 
Acting Deputy Associate Director for Pay and Performance Policy, Office 
of Personnel Management, Room 7H31, 1900 E Street, NW., Washington, DC 
20415; FAX: (202) 606-4264; or e-mail: [email protected].

FOR FURTHER INFORMATION CONTACT: Barbara Colchao, (202) 606-2720, FAX: 
(202) 606-4264, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: OPM is proposing to amend the incentive 
awards regulations in part 451 of title 5, Code of Federal Regulations, 
to ensure effective application of the merit system principles and 
related appraisal and incentive awards requirements and authorities. 
This amendment would clarify that agencies using the incentive awards 
authorities in chapter 45 of title 5, United States Code, to grant 
employees performance-based cash awards on the basis of a summary 
rating of record of ``fully successful'' or above must ensure that such 
cash awards reflect meaningful distinctions based on levels of 
performance. In other words, when agencies grant rating-based awards, 
employees with higher performance ratings must be granted larger cash 
awards, as a percentage of basic pay, than those with lower ratings.
    This amendment is consistent with the merit system principle at 5 
U.S.C. 2302(b)(3), which states, in part, ``appropriate incentives and 
recognition should be provided for excellence in performance.'' 
Further, the requirements in 5 U.S.C. chapter 43 regarding appraisal of 
employee performance state that the results of performance appraisal 
shall be used as a basis for rewarding employees ``whose performance so 
warrants.'' Taken together, these requirements are not reasonably met 
by providing uniform amounts as performance-based cash awards 
irrespective of differences in summary performance ratings.
    OPM is mindful that many agencies already use established 
performance-based awards programs that fully comport with the proposed 
regulatory requirement. Nonetheless, the importance of linking rating-
based rewards to measured performance in a way that supports the merit 
system principle warrants this amendment to the awards regulations.
    In addition, OPM is proposing to clarify that a rating of record 
used as the basis for a performance-based cash award must be at the 
fully successful level (or equivalent) or higher. The statute at 5 
U.S.C. 4505a already establishes this threshold for rating-based cash 
awards granted to General Schedule employees and to other employees in 
certain circumstances.
    These amendments to the incentive awards regulations would make no 
changes in regulations governing Senior Executive Service performance 
awards granted under 5 U.S.C. 5384 and 5 CFR 534.405.

Waiver of 60-Day Comment Period for Proposed Rulemaking

    Pursuant to 5 U.S.C. 553(b)(3)(B), I find that good cause exists to 
waive the 60-day comment period for general notice of proposed 
rulemaking. Limiting the comment period for the proposed regulations to 
30 days will enable OPM to issue final regulations at the time when 
most agencies are making their awards decisions, which will give 
practical effect to these regulations.

E.O. 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
as a significant regulatory action in accordance with E.O. 12866.

Regulatory Flexibility Act

    I certify that these regulations would not have a significant 
economic impact on a substantial number of small entities because they 
would apply only to Federal agencies and employees.

List of Subjects in 5 CFR Part 451

    Decorations, Medals, Awards, Government employees.

Office of Personnel Management.
Linda M. Springer,
Director.
    Accordingly, OPM is proposing to revise part 451 of title 5 of the 
Code of Federal Regulations as follows:

PART 451--AWARDS

    1. The authority citation for part 451 continues to read as 
follows:

    Authority: 5 U.S.C. 4302, 4501-4509; E.O. 11438, 33 FR 18085, 3 
CFR, 1966-1970 Comp., p. 755; E.O. 12828, 58 FR 2965, 3 CFR, 1993 
Comp., p. 569.

Subpart A--Agency Awards

    2. In Sec.  451.101, paragraph (e) is revised to read as follows:


Sec.  451.101  Authority and coverage.

* * * * *
    (e) An agency may grant performance-based cash awards on the basis 
of a rating of record at the fully successful level (or equivalent) or 
above under the authority of 5 U.S.C. 4505a and the provisions of this 
part to eligible non-GS employees who are covered by 5 U.S.C. chapter 
45 and this part and who are not otherwise covered by an explicit 
statutory authority for the payment of such awards, including 5 U.S.C. 
5384 (SES performance awards).
    3. In Sec.  451.104, paragraph (a)(3) is revised and a new 
paragraph (h) is added to read as follows:


Sec.  451.104  Awards.

    (a) * * *
    (3) Performance as reflected in the employee's most recent rating 
of record (as defined in Sec.  430.203 of this chapter), provided that 
the rating of record is at the fully successful level (or equivalent) 
or above, except that performance

[[Page 35562]]

awards may be paid to SES members only under Sec.  534.405 of this 
chapter and not on the basis of this subpart.
* * * * *
    (h) Programs for granting performance-based cash awards on the 
basis of a rating of record at the fully successful level (or 
equivalent) or above, as designed and applied, must make meaningful 
distinctions based on levels of performance.

[FR Doc. E6-9797 Filed 6-20-06; 8:45 am]
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