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A Closer Look at Nonmonetary Awards

The first in a series of articles addressing nonmonetary awards

Interest in the use of nonmonetary awards is always growing, particularly as cash awards budgets tighten. Workforce Performance is launching a series of occasional articles on this subject with a look at the underlying authority for granting nonmonetary awards and some of the ground rules that affect their use.

• What Are Nonmonetary Awards?
• Government Use of Nonmonetary Awards
• For More Information

What Are Nonmonetary Awards? Plaques. Mugs. Savings bonds. Medals in presentation cases. Jackets. Corsages and boutonnieres. Briefcases. Gold-embossed, leatherbound books. Calculators. Career service certificates. Engraved crystal sculptures. Pen-and-pencil desk sets. Lapel pins. Balloons. Paperweights. Notepads. Nonmonetary awards to Federal employees have taken these and many other forms under the broad agency authority in the incentive awards chapter of title 5, United States Code. In fact, the authority for granting nonmonetary awards deserves a closer look, as the only kinds of awards that are specifically authorized by statute are cash and time-off. The statutory language underlying nonmonetary awards is the very general authority given to agency heads to: "...incur necessary expense for the honorary recognition of an employee." (5 U.S.C. 4503)

The nonspecific nature of that language has proved useful for authorizing a multitude of programs that provide employee incentives and recognition in a variety of forms other than cash and time-off. In fact, OPM's desire to leave the possibilities as broad as possible led to our defining "award" in Government-wide regulation as "something bestowed or an action taken."

Government Use of Nonmonetary Awards. Agency interest in using these awards stems from their growing use in organizations everywhere. It's often said that you can get a "better bang for your buck" by using symbolic items and gestures to communicate that employee contributions are valued and appreciated.

One dilemma for Government agencies, however, is that we are just that - public sector organizations. The popular human resources literature describes many examples of innovative, nonmonetary incentives that are simply not appropriate in a Government setting.

A chief reason why some popular awards, such as vacation travel, automobiles, and expensive sports and leisure merchandise are not appropriate is because our awards are paid for not with private corporate revenues but with public monies. Even though the awards are not cash, some costs are involved and must be managed. In the past, some agencies have been subjected to severe Congressional scrutiny of their nonmonetary award programs, including their costs.

Generally, agencies make appropriate use of their honorary recognition authority by:

• granting formal, honorary awards for significant achievements;
• providing informal recognition items; and
• holding ceremonies and recognition events.

OPM supports agencies' creative use of these broad authorities. Nonetheless, as steward of the incentive awards program, OPM is concerned about the credibility and integrity of incentives and recognition in all their forms. We plan to use this series of articles to share ideas and guidelines, but only rarely any strict rules.

For More Information. Future articles in this series will address issues dealing with informal recognition, honorary awards, award ceremonies, administrative issues, tax implications, and other related topics. You can call, write, or fax us questions or suggestions about Federal sector nonmonetary awards. We will answer as many of your questions as possible in future issues of Workforce Performance.

Originally published on April 1996