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This Directive was canceled August 5, 2004.

Order
Subject
Personnel Management Manual: ATTACHMENT 2 PMM
Classification Code  
M3000.1B    


Bonus Amount Criteria


Under current regulations, recruitment, relocation, and retention bonuses are calculated as a percentage of the employee's annual rate of basic pay, not including locality pay. In most cases, the amount of any bonus may not exceed 25 percent of the employee's annual rate of basic pay, and the bonus amount is not considered part of the employee's rate of basic pay for any purpose.

In determining the appropriate amount for a particular bonus, the recommending official needs to consider the nature and extent of the recruitment problems that have been encountered in trying to fill the position, as well as the unique qualifications of a particular candidate or employee. For example, a larger bonus, i.e., one that is at or near 25 percent, should be reserved for filling positions that present the most difficult recruitment problems, or for retaining an employee who is uniquely qualified to retain in a certain position. Paying too much to fill a position that is not as difficult to fill could set an unwarranted expectation or precedent for other candidates and could adversely affect the morale of current employees who did not receive a bonus.

When the amount of a bonus is based on the special qualifications of a particular applicant, the highest bonuses should be reserved for the most highly qualified individuals. For example, if an applicant has qualifications, which far surpass those of other candidates, and if the applicant has a high degree of expertise and experience in his/her field, then a bonus at or near 25 percent may be appropriate.

The following guidelines may be used to help to set bonus amounts in specific cases:

(1) 5 to 10 percent

Bonuses in this range are appropriate in situations where it is routinely difficult to recruit qualified candidates for particular positions. A bonus in this range is appropriate in situations where a well-qualified candidate may be available, but may not accept the position in the absence of the bonus. Example: Recruitment bonuses for Professional Development Program (PDP) new hires are authorized at this level.

(2) 11 to 15 percent

Bonuses in this range are appropriate for positions which are difficult to fill, and where labor market factors are likely to negatively affect the ability of FHWA to recruit qualified applicants now or the future. In addition, there should be a demonstrated need to fill the position or to retain a particular individual in order to accomplish important program work or maintain customary levels of service. Example: Candidates for bonuses in this range should be well-qualified, and have experience, which is directly applicable to the position. Also, the position being filled should have the characteristics described in this paragraph.

(3) 16 to 20 percent

Bonuses in this range are appropriate for positions which have proven difficult to fill, for example, because of the location of the position, and/or because competition with other employers for candidates in a particular field is especially intense. In addition, there is a critical need at the operational level for this type of position to be filled quickly, or to remain filled. Example: Bonuses at this level are appropriate for candidates for the type of positions described in this paragraph who bring an exceptional level of expertise and/or training, when compared with that offered by other applicants, to a critical job vacancy.

(4) 20 to 25 percent

Bonuses in this range are appropriate for positions which present the most difficult recruitment problems, such as those which are located in metropolitan areas with the highest cost-of-living rates and the tightest labor market conditions. This includes positions which may have been advertised several times in the past, and for which there have been very few highly qualified applicants. These should be positions for which there is an extremely critical and compelling need at the agency level to fill the position with a uniquely qualified candidate, or to retain a uniquely qualified candidate. Example: A bonus in this range is appropriate for candidates who possess a very high degree of expertise in their field, are unique experts in their field, or who possess technical skills that are clearly superior to those of other candidates and applicable to the job being filled. Also, there is an extremely critical and compelling agency need to fill the position with a candidate of this caliber.

Vacancy Announcements

When initiating the recruitment process for a position which has proven difficult to fill in the past, a unit manager may want to indicate in the vacancy announcement that a recruitment or relocation bonus may be available to a selected candidate who meets applicable criteria specified in 5 CFR Part 575. This should only be done with the prior approval of the official with delegated authority to approve bonus payments. The language in the announcement should not create an undue expectation for a bonus or of a bonus in a specific amount.

Sample language may be a note in the vacancy announcement to this effect:

"A recruitment or relocation bonus may be authorized for a selected candidate who meets the applicable criteria specified in 5 CFR Part 575."

Page last modified on October 19, 2015
Federal Highway Administration | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000