Does the Federal Incentive Awards Program Improve Productivity?

The federal government uses incentive awards and quality step increases (QSI) to encourage employees to improve their work performance and, consequently, government operations, by recognizing work exceeding normal performance requirements.

A questionnaire sent to federal employees revealed that many felt unmotivated by their agencies' incentive programs and believed that the workers most deserving of cash awards were often passed over. Other comments identified the failure of awards programs to increase productivity and the feeling that improvements in efficiency were not recognized with awards. An analysis of incentive awards programs revealed that some workers receiving awards were rated as below-average performers. These problems exist because agency programs overlook the following basic components: linkage to agency goals, systems for setting work expectations and measuring performance, motivation of managers to use awards programs, timely and relevant awards separated from the basic salary rate, and an annual evaluation of program results. Most employees questioned believed that an improved incentives system would improve their performance. In most agencies surveyed, GAO found an excessive use of the QSI as the most commonly granted form of cash recognition, rather than the generally preferable promotion. The Civil Service Reform Act of 1978 helps associate incentive awards and employee performance, although the Act provides only the framework for change; the responsibility for accomplishment lies with supervisors and managers.

Recommendations

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