R477-6-7. Incentive Awards

  (1) Only agencies with written and published incentive award and bonus policies may reward employees with incentive awards or bonuses. Incentive awards and bonuses are discretionary, not an entitlement, and are subject to the availability of funds in the agency.

  (a) Policies shall be approved annually by DHRM and be consistent with standards established in these rules and the Department of Administrative Services, Division of Finance, rules and procedures.

  (b) Individual awards may not exceed $4,000 per pay period and $8,000 in a fiscal year, except when approved by DHRM and the governor.

  (i) A request for a retirement incentive award shall be accompanied by documentation of the work units affected and any cost savings.

  (ii) A single payment of up to $8,000 may be granted as a retirement incentive.

  (c) All cash and cash equivalent incentive awards and bonuses shall be subject to payroll taxes.

  (2) Performance Based Incentive Awards.

  (a) Cash Incentive Awards

  (i) An agency may grant a cash incentive award to an employee or group of employees that demonstrates exceptional effort or accomplishment beyond what is normally expected on the job for a unique event or over a sustained period of time.

  (ii) Pay for Performance cash incentive award programs offered by an agency shall be included in the agency's incentive awards policy and reviewed annually by DHRM, in consultation with GOMB.

  (A) The policy shall include information supporting the following:

  (1) Sustainability of the funding for the cash incentive program;

  (2) The positions eligible to participate in the Pay for Performance program;

  (3) Goals of the program;

  (4) Type of work to be incentivized; and

  (5) Ability to track the effectiveness of the program.

  (iii) All cash awards shall be approved by the agency head or designee. They shall be documented and a copy shall be maintained by the agency.

  (b) Noncash Incentive Awards

  (i) An agency may recognize an employee or group of employees with noncash incentive awards.

  (ii) Individual noncash incentive awards may not exceed a value of $50 per occurrence and $200 for each fiscal year.

  (iii) Noncash incentive awards may include cash equivalents such as gift certificates or tickets for admission. Cash equivalent incentive awards shall be subject to payroll taxes and shall follow standards and procedures established by the Department of Administrative Services, Division of Finance.

  (3) Cost Savings Bonus

  (a) An agency may establish a bonus policy to increase productivity, generate savings within the agency, or reward an employee who submits a cost savings proposal.

  (i) The agency shall document the cost savings involved.

  (4) Market Based Bonuses

  An agency may award a cash bonus as an incentive to acquire or retain an employee with job skills that are critical to the state and difficult to recruit in the market.

  (a) All market based bonuses shall be approved by the DHRM Executive Director or designee.

  (i) When requesting market based awards an agency shall submit documentation specifying how the agency will benefit by granting the bonus based on:

  (A) budget;

  (B) recruitment difficulties;

  (C) a mission critical need to attract or retain unique or hard to find skills in the market; or

  (D) other market based reasons.

  (b) Retention Bonus

  An agency may award a bonus to an employee who has unusually high or unique qualifications that are essential for the agency to retain.

  (c) Recruitment or Signing Bonus

  An agency may award a bonus to a qualified job candidate to incentivize the candidate to work for the state.

  (d) Scarce Skills Bonus

  An agency may award a bonus to a qualified job candidate that has the scarce skills required for the job.

  (e) Relocation Bonus

  An agency may award a bonus to a current employee who must relocate to accept a position in a different commuting area.

  (f) Referral Bonus

  An agency may award a bonus to a current employee who refers a job applicant who is subsequently selected.

  (g) Geographic Job Market Bonus

  An agency may award a bonus to incentivize an employee to accept and/or continue an assignment in a specific geographic area.