# Presentation: 744406

## Effective Compensation Alternatives:

**Recruitment Bonuses**
**Relocation Bonuses**
**Retention Allowances**
**“****The 3Rs”**
***Strategic Compensation Conference 2001***
*August 28, 2001*

## The 3Rs

**What are they?**
**To what extent are they being used?**
**What changes might be made in the future?***** ***

## Recruitment Bonuses (5 U.S.C. 5753 and 5 CFR part 575, subpart A)

**Lump-sum bonus for a newly appointed employee or former employee with a 90-day break-in-service.**
**Used for positions that would otherwise be difficult to fill.**
**Up to 25 percent of basic pay.**
**May be paid to GS, SES, SL/ST, FWS, and others.**

## Recruitment Bonuses

**Employees must fulfill a service agreement of at least 6 months with repayment penalties if agreement not fulfilled.**
**May be used in combination with superior qualifications appointments, special salary rates, and advances in pay.**
**May be paid prior to the employee entering on duty.**

## Recruitment Bonuses

**Approved on a case-by-case basis. May be targeted to groups of employees in certain circumstances.**
**Paid in accordance with the agency’s recruitment bonus plan.**
**Second level review required (unless agency plan allows exceptions, e.g., job fairs).**
**Subject to the aggregate pay limit (level I of Executive Schedule).**

## Relocation Bonuses(5 U.S.C. 5753 and 5 CFR part 575, subpart B)

**Lump-sum bonus for current employees who must relocate to accept a position in a different commuting area.**
**Position must be otherwise difficult to fill**
**Up to 25 percent of basic pay. **
**May be paid to GS, SES, SL/ST, FWS, and others.**

## Relocation Bonuses

- **Employee must fulfill a service agreement (of any length) with repayment penalties if agreement not fulfilled.**
- **May be paid for temporary or permanent duty station changes.**
- **Employee must establish a residence in the new commuting area prior to payment.**
- **Subject to the aggregate pay limit (level I of the Executive Schedule).**

## Relocation Bonuses

- **Approved on a case-by-case basis.  May be approved for groups of employees subject to a mobility agreement or in a major organizational unit that is being relocated. (Employee must have a fully successful rating.)**
- **Second level review required.**
- **Paid in accordance with the agency’s relocation bonus plan.**

## Retention Allowances(5 U.S.C. 5754 and 5 CFR part 575, subpart C)

**Continuing payments (i.e., biweekly) to an employee--**
**with unusually high or unique qualifications**
**OR**
**when the agency has a special need for the employee’s services that makes it essential to retain the employee,**
**IF**
**the employee would be likely to leave the Federal service in the absence of an allowance.**

## Retention Allowances

**Up to 25 percent of basic pay.**
**May be paid to GS, SES, SL/ST, FWS, and others.**
**Employees must be likely to leave the Federal service (for any reason, including retirement).**
**May be paid to employees receiving a special salary rate.**
**Paid in accordance with the agency’s retention allowance plan.**

## Retention Allowances

**Must be reviewed and recertified annually.**
**Flexible—may be terminated if conditions no longer warrant payment.**
**Cannot be paid if employee is fulfilling a previously authorized recruitment or relocation bonus service agreement.**
**Subject to the aggregate pay limit (level I of the Executive Schedule).**

## Group Retention Allowances

**Authorized by regulation in June 1998.**
**Allows agencies to authorize retention allowances for a group or category of employees.**
**May not be used for SES, SL/ST, and similar “executive” employees.**
**Up to 10 percent of basic pay or up to 25 percent with OPM approval.**

## Group Retention Allowances

**Same criteria as individual retention allowances **_**except**_**--Agencies do not have to determine whether each individual employee in the group is likely to leave.**
**Must be reasonable for the agency to presume that there is a high risk that a significant number of employees in the defined group would be likely to leave the Federal service in the absence of an allowance.**

## Group Retention Allowances

**A high risk that a significant number of employees in the group are likely to leave may be based on extreme labor market conditions, high private sector demand, significant pay disparities, etc.**
**Group should be narrowly defined.**

## Group Retention Allowances

**All other regulatory conditions apply.**
**Agency retention allowance program may use combination of group and individual retention allowance authority.**
**Example—State Department IT employees.**

## 3 Rs Usage Data

**FY 1999, FY 2000, and 1st half of FY 2001**
**By type of payment, occupation, agency, grade**
**Usage rates**
**Average value**** **

## Recruitment Bonuses

## Recruitment Bonus Usage Rates

## Recruitment Bonuses by GS Grade Groups

## Agency Usage of Recruitment BonusesOctober 1998 - March 2001

## Recruitment Bonuses by OccupationOctober 1998 - March 2001

## Recruitment Bonuses by Percentage of Basic Pay

## Relocation Bonuses

## Relocation Bonus Usage Rates

## Relocation Bonuses by GS Grade Groups

## Agency Usage of Relocation BonusesOctober 1998 - March 2001

## Relocation Bonuses by OccupationOctober 1998 - March 2001

## Relocation Bonuses by Percentage of Basic Pay

## Retention Allowances

## Retention Allowance Usage Rates

## Retention Allowances by GS Grade Groups

## Agency Usage of Retention AllowancesMarch 2001

## Retention Allowances by Occupation September 1999

## Retention Allowances by Occupation September 2000

## Retention Allowances by Occupation March 2001

## Retention Allowancesby Percentage of Basic Pay

## 3Rs–The Future

**Under consideration--**
**More flexibility in mode of payment.**
**Delayed recruitment bonus.**
**Payments in excess of 25 percent in certain situations.**
**Authority to allow 3Rs payments to be based on locality-adjusted rates.**

## 3Rs–The Future

**Under consideration--**
**Retention allowances for employees likely to leave for another Federal position under certain conditions.**
**Recruitment bonuses for current employees under certain conditions.**

## For More Information:

**OPM’s web site at www.opm.gov/oca**
**	****-****	****Factsheets**
**	****-****	****Frequently Asked Questions**
**OPM’s Pay and Leave Administration Division**
**	****-****	****(202) 606-2858**
**	****-****	****payleave@opm.gov**