Rewarding an Employee

How Do I Reward an Employee?

Typical Scenario:

You have an employee who has done a particularly good job on an assignment or has performed exceptionally well throughout the year. How can you reward that person?


Employees who contribute to meeting organizational goals or who improve the efficiency, effectiveness, and economy of the Government can be rewarded. Awards should be used as a tool to recognize past performance as well as motivate employees to continue high performance.

Where Do I Start?

Contact your servicing human resources management specialist who can explain the numerous options and provide a detailed listing of available awards, as well as information on eligibility, criteria, and procedures on submitting requests and determining proposed award amounts. You may also wish to consult the guidance provided on the Employee Recognition Page, for specific information on all the award programs offered.

Rules and Flexibilities:

Government-wide requirements and USDA policy provide a variety of programs that may be used to recognize and motivate employees.

Basic Steps:

After you have identified the contribution to be recognized, the next step is to determine the appropriate type of award for the employee: monetary or non-monetary. Each type of award has its own specific criteria and documentation requirements.

Monetary awards offer you an array of recognition possibilities that are flexible enough to recognize and reward differences in individual performance. Using cash awards requires exercising sound judgment. Mistakes that result in undeserving employees receiving recognition, or deserving employees going unrecognized, will undermine both your credibility and the credibility of the program. In granting a cash award, you must ensure that the award is based solely on merit and that the award amount is proportionate to the level of the employee's contribution. In doing so, you will ensure that awards granted in your organization are viewed as reasonable and justified. Once you have selected the appropriate award, you should recommend an award amount. Award amounts vary widely and should be proportional to the value of the contribution made. They also may be limited by available funds.

Non-monetary awards are more varied and unique than cash awards and offer two major advantages over cash awards: they help meet employees' needs for recognition, growth and responsibility; and can be relatively inexpensive. Non-monetary awards range from small merchandise awards to the oldest form of recognition in the Department, the Honor Awards. The technical requirements are equally varied, ranging from awards with no documentation (e.g., certificates of appreciation) to awards requiring your signature (e.g., Honor Awards or External Awards) before being submitted to the Department.


Performance Award - - A one-time lump-sum cash award based on the employee's rating of record of “Superior” or “Outstanding” for the most recent appraisal period. These awards are used primarily with five-level rating systems which distinguish levels of performance above fully successful. For more information, refer to 5 PM Handbook

Special Act or Service Award - A one-time lump-sum cash award based on a special contribution or service. Unlike a performance award, this award is normally for a single contribution or series of connected actions within a short time frame, and often can be documented in terms of tangible benefits. For more information, see Chapter 6, Performance Management Handbook.

Quality Step Increase - An increase in pay (additional step increase) which may be granted to an employee with a rating of record of "outstanding" for the most recent appraisal period (for a five-level rating system). For two-level rating systems, individual bureaus develop their own criteria, since an "outstanding" level does not exit. (A regularly scheduled within-grade increase is not a performance award, but it does require a certification that the employee's performance is at least "fully successful."). For more information, see Chapter 5, Performance Management Handbook.

Special Operating Unit Award - Individual bureaus may establish award programs which are appropriate to their particular interests in recognizing certain groups of employees. There are a large variety of programs, ranging from recognition for scientific accomplishments to employee of the year. These award programs can be cash or non-monetary. For more information, see Chapter 7, Performance Management Handbook.\

Cash-in-Your-Account Award - A small cash award designed to recognize employees for going the extra mile in getting the job done. These awards do not recognize overall performance, but rather specific instances of exemplary performance. Awards range from $50 to $500, in $50 increments. For more information, see Chapter 12, Performance Management Handbook.

Suggestion Award - Under the Suggestion Program, employees are granted an award for formal suggestions which have been evaluated and adopted. The amount of the award is determined by the amount of tangible and intangible benefits of the idea.


On-the-Spot Award - A small merchandise award which is granted as a means to recognize employees for those day-to-day efforts which contribute "in a special way" to getting the job done. For more information, see Chapter 11, Performance Management Handbook.

Time Off Award - An award which allows managers to grant employees time off from duty, without loss of pay or charge of leave. These awards are normally used as an alternative to Special Act or Service Awards. An employee may receive up to 40 hours of time off for a single contribution or up to 80 hours for multiple awards during a leave year. For more information, see Chapter 13, Performance Management Handbook.

Honor Award - The highest forms of honorary recognition awarded are Gold and Silver Medals which the Department bestows for distinguished and meritorious service. The Bronze Medal is the highest form of honorary recognition that a Secretarial Officer or operating unit head grants for superior service. For more information, see Chapter 10, Performance Management Handbook.

Certificates of Appreciation - Certificates granted to employees or non-employees who have made outstanding contributions or who have performed significant services to the Department.

Length of Service Recognition - Pins and certificates are available to recognize employee career service. An employee must have at least ten years of service and the pins and certificates can be presented in 5-year increments.

External Awards - Awards sponsored by other agencies and non-Government organizations given to Federal employees. The Performance Management Handbook lists external awards alphabetically, by month and by category. Also included is a single page on each award listing the following: Sponsor, Purpose, Eligibility, Criteria, Due Date and Type of Recognition. Chapter 15, Performance Management Handbook.

Where Do I Begin:

Contact your SHRMO representative who can explain the numerous options and provide a detailed listing of available awards, as well as information on eligibility, criteria, and procedures on how to submit requests and determine proposed award amounts. You may wish to consult the Performance Management Handbook for additional instructions.

Required Forms:

Most award requests are documented on the CD-326, Recommendation for Recognition. Honor Awards are documented on the web-based Honor Awards Nomination System. For more information

Time Frames:

Requests for awards based on an employee's annual performance rating (Performance Award or Quality Step Increase) should be submitted not more than 90 days after the end of the rating cycle which serves as the basis for the award. This applies to employee's on a 5-level appraisal cycle only.

Time frames for submission of Honor Award nominations are detailed in instructions issued each year, typically in March.

Requests for other awards listed above should be submitted as soon as the contribution or accomplishment has been identified.

Good Management Practices:       

  • To recognize performance over an extended period (a performance cycle), use a Performance Award or Quality Step Increase. 
  • To recognize singular or more isolated contributions, Special Act, Time Off, On-the-Spot and Cash-in-a-Flash Awards are more suitable.
  • Most of the awards listed above can be granted for individuals or groups. Group awards are particularly useful in encouraging and recognizing teamwork.
  • Studies show that awards are more effective if granted as soon as possible after the event being recognized. The timely submission of an award request is the important first step in this process.
  • Keep in mind that there are very few management concepts that are as solidly grounded as the idea of positive reinforcement - rewarding behavior you want repeated. The power of positive reinforcement cannot be underestimated.


Identify performance to be rewarded

Identify appropriate award

Determine eligibility

Ensure funding availability for cash awards

Document award on a CD-326

Submit award nomination as soon as possible

For Additional Information

Contact your SHRMO.

Information on all types of incentive awards may be found in the Performance Management Handbook. The handbook is available online

Other Departmental policy on incentive awards includes:

DAO 202-454, Suggestion Program


Career SES employees are eligible for certain awards that are not available to other employees.

They are:

Bonuses, ranging from 5 percent to 20 percent of base pay. Bonuses are given for performance that is fully successful or higher. They are initiated at the time of the annual performance appraisal, and are subject to an available "bonus pool," as well as certain limits on the numbers awarded. Recommendations are reviewed by the Departmental Executive Resources Board and final decisions are made by the Secretary.

SES Special Act or Service Awards. Although Senior Executives are eligible to receive Special Act or Service Awards, either individually or as part of a group, such recognition is rare because of the SES Bonus program. Recognition is usually incorporated in the end-of-the-year appraisal. Senior Executives may be awarded a Special Act or Service Award only after review and approval of the CFO/ASA. SHRMOs submit requests through the Department's Director for Human Resources Management.

Presidential Rank Awards are the highest performance awards available for career SES employees. The two categories are Distinguished Executive (35 percent of base pay) and Meritorious Executive (20 percent of base pay). A call for nominations and criteria for consideration are distributed to managers each fall. The Departmental Executive Resources Board considers the nominations and makes recommendations to the Secretary, who decides which nominations will be forwarded to OPM . OPM convenes panels of citizens appointed by the President to review the nominations, and the final award determinations are made by the President.