The Government Just RUINED Federal Performance Bonuses

Added: 2026-06-10

[00:00:00]A federal agency that has lost workers struggling with burnout and operating on a reduced budget, well, they have another little surprise coming their way because you understand the concept of a performance award for strong performance. Yeah, that's pretty much out the window. The government is scaling back on its performance awards.

[00:00:23]I hate to say it, but it's true. And this is coming specifically from the HHS, but it can quickly spread to other agencies. And this whole thing kind of kicked off with an email on May 12th from the CDC. They told their managers that financial awards for workers who received top scores on their performance evaluations are undergoing a reduction in dollar amounts. HHS confirmed this is not just CDC, this will be happening agency-wide. So, to be clear, the award pool stays the same. Nothing has changed about that, but performance awards will comprise 40% of the award pool. The other 60% are going to incentive awards.

[00:01:10]So, this is something that's typically called a special act award.

[00:01:15]Now, performance awards, as you probably know, are tied to your performance. You have your annual evaluation. You will get between a one and a five. A five means outstanding, a one means that you're trash and you should leave the agency. They're probably putting you on a performance improvement plan.

[00:01:31]That's how it typically works. Most federal workers, I would say, earn between a thousand to twenty-five hundred dollars every year after the fiscal year, if you were able to attain a solid rating, depending on your agency. The special act or service award, that's a lump sum cash award that's meant to recognize a short-term achievement. So, let me give you an example really quick. Let's say you are an HR specialist. So, you're in the 0200 series and your job, I don't know, could be classifications, could be whatever.

[00:02:04]Maybe you're you're reimbursing individuals when they travel. So, you're in the system, you notice a glitch.

[00:02:10]You're not an IT worker, you have no authority over IT whatsoever, but you go ahead and you start writing down exactly what's happening, what you believe to be the issue, and you submit that information so that they can fix it.

[00:02:24]And if that, let's say, causes the agency to recuperate some of the money, maybe they were giving too much money when they were reimbursing travel, you save the agency thousands of dollars, perhaps. You could potentially get a service award, a special act reward for something like that. And really, these could be given out throughout the year.

[00:02:42]You don't have to wait till the end of the fiscal year to go ahead and give one of these out. So, why make the shift though? By shifting the money in the cash bonus bucket from performance awards to special act awards, well, there's two good advantages that managers could potentially have. Number one, they don't have to wait till the end of the year, the end of the fiscal year. They could do it whenever they want. So, they can reward good performance at any given time. And the second is, okay, so maybe you don't have the ability to give somebody a five anymore. You cannot actually say, "Hey, you're outstanding."

[00:03:13]What can you do? Well, you can recognize them with a one-time award. There's no requirement for you to have a certain performance rating, you can just issue out the award, provided that it's approved. I think the intent is for supervisors to really identify and incentivize people to eliminate fraud, waste, and abuse because this is HHS. They manage They manage They manage a massive portion of the federal budget when it comes to Medicare, Medicaid, public health grants. So, they're a primary target for these initiatives. I'm not saying this is not going to spread, could spread to other agencies. DOD could adopt it, VA could adopt it, but starting with HHS makes a little bit more sense. Now, how much less will high performers get? It's actually a lot less.

[00:03:54]The CDC said that workers with an outstanding rating, they would typically get 4% of their basic pay. So, 4% of their base pay. If you made $100,000 a year, you would see $4,000 before taxes.

[00:04:09]That would be your performance award.

[00:04:10]But now they're shifting it from 4% to 2 and 1/2%.

[00:04:16]It's about a third less than anticipated. So, if you get a four or if you exceed fully successful, that would make it so you would only get less than 1%. You would barely see I mean, you might not even notice it if you weren't paying attention to your paychecks. That small increase could go unnoticed. But you probably already know the deal by now. People receiving fours and fives, that will be an anomaly.

[00:04:41]Threes are the baseline. There could be entire offices where nobody receives a five. That will be the new normal. And this approach really it falls short of OPM guidance. The OPM director just last year, not too long ago, he said that all agencies should set aside 60% of their bonus pools for workers that achieve a four or a five on their performance ratings. HHS is saying no.

[00:05:09]OPM says 60%, HHS is saying 40%. So, clearly not being done here.

[00:05:16]One CDC worker described the decreased performance awards as attempt to demoralize us further.

[00:05:24]This is a common reaction because these are the same people that are dealing with staffing shortages, crippling workloads. So, they're burnt out. They feel disrespected by a lot of the shifts and changes that have occurred over the last 18 months. And now you're saying not only will less people receive higher ratings, but the people that do manage to have those higher ratings, they're going to receive a lot less money. For most civil servants, for most federal workers, the the performance award, you know, it's kind of like a mutual agreement that has existed for decades.

[00:06:02]So, it's almost like you broke the trust with something like this. And then, even if your team performs perfectly, let's say you got an all-star, you have the A team over there, only a small capped percentage can actually get those top ratings. The rest are going to be pushed down. Why? Is it because of their performance? No, it's because of the quota. The quota has been exceeded, that's the reason why. Now, while this is happening, the CDC is also cracking down on telework and remote work. So, you know the whole debacle when it comes to reasonable accommodations? A part of a new HHS policy was actually to rescind reasonable accommodations for people that were managing their medical condition and still trying to work at the same time. HHS is now facing a backlog of reasonable accommodations. It is not just them, it's the majority of agencies. They have a huge backlog when it comes to reasonable accommodations.

[00:06:52]At the HHS, it's 9,000.

[00:06:54]9,000.

[00:06:56]That's the backlog. So, it looks like it would probably take between 6 to 9 months, and that's if you're optimistic.

[00:07:04]6 to 9 months to hear back on what your status is when it comes to reasonable accommodations. And then, until that point, you're still doing I mean, you're going to be expected to do what any other federal worker does, come into the office. For most people, it's to sit in the cubicle. Now, in addition to this, we have more federal jobs being pushed into the category of at-will. We can fire you for any reason at any time, just about. And this comes with the new classification schedule policy and career. This is something that was that was called schedule F during President Trump's first term. The name has changed, but it's the still it's the same plan.

[00:07:42]Now, we're hearing that agencies are getting closer to make that conversion and change people's classifications. If you want to know a little bit more about that, I want you to check this video out next. Stay updated by signing up to the free newsletter down below. Thank you so much for watching. I'll see you in the next one.