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Using "Nonmonetary Items" as Incentive Awards

Using "Nonmonetary Items" as Incentive Awards

Interest in the use of nonmonetary awards often grows when cash awards budgets tighten. Many agencies have expressed interest in exploring this aspect of the awards authority. It is also important to distinguish between nonmonetary awards and the use of promotional items (See Promotional Items - “Swag” - In the Context of Agency Award Programs). The following guidance is provided to assist agencies in ensuring the integrity of their awards programs.

NOTE:  There is no explicit authority for granting nonmonetary awards
5 U.S.C. 4503 states that the head of an agency may "pay a cash award and incur necessary expense for the honorary recognition" of an employee who makes any of several forms of contribution. 5 U.S.C. 4502(e) authorizes OPM by regulation to permit agencies to "grant employees time off from duty, without loss of pay or charge to leave, as an award."
5 CFR 451.104(a) states that an agency may grant "a cash, honorary, or informal recognition award, or grant time off" to an employee, as an individual or member of a group, on several bases. In addition, 5 CFR 451.102 defines an award as "something bestowed or an action taken".

Criteria for Honorary Awards and Informal Recognition Awards

Honorary Awards
Given their nature as symbolic formal recognition, nonmonetary items (other than U.S. Savings Bonds, as discussed below) presented as honorary awards must meet all of the following criteria:
  • The item must be something that the recipient could reasonably be expected to value, but not something that conveys a sense of monetary value.
  • The item must have a lasting trophy value.
  • The item must clearly symbolize the employer-employee relationship in some fashion.
  • The item must take an appropriate form to be used in the public sector and to be purchased with public funds.
Informal Recognition Awards
Informal recognition awards are intended to recognize contributions of lesser scope that might otherwise go unrecognized. In addition, informal recognition awards typically have more informal approval procedures and presentation settings than honorary awards. Given this combination of lesser-scope contributions and informality, nonmonetary items presented as informal recognition awards must meet the following criteria:
  • The item must be of nominal value.
  • The item must take an appropriate form to be used in the public sector and to be purchased with public funds.
U.S. Saving Bonds A Special Case
A U.S. Savings Bond is a nonmonetary item because it is a Federal contract that must be purchased. With respect to the criteria for use as an honorary award, although a U.S. Savings Bond clearly conveys sense of monetary value, it symbolizes the employer-employee relationship for any Federal employee, its minimum 6-month holding period gives it some lasting value, and it is appropriate to the public sector. Consequently, OPM has concluded that a savings bond may be used as an honorary award or, if of nominal value, an informal recognition award. OPM considers savings bonds a special case, however, and expects that the criteria for using nonmonetary items as honorary awards and informal recognition awards will be applied in all other cases.
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