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Performance Management Performance Management FAQs

Awards - Honorary or Informal

  • Informal recognition awards are a type of award that may be given to recognize performance that, taken alone, does not merit a larger award, such as cash, time-off, or an honorary award. Agencies are finding that they can effectively and efficiently achieve many of the goals of a recognition and incentive award program by providing more frequent, timely, and informal recognition of employees and group contributions. Informal recognition awards must meet the following criteria: The item must be of nominal value. The item must take an appropriate form to be used in the public sector and to be purchased with public funds.
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  • An honorary award is a gesture of respect given to an employee to recognize his or her performance and value to the organization. Honorary awards are generally symbolic. Many agencies include as part of their overall incentive awards programs a traditional form of high-level, formal "honor awards." Often, such honor award programs do not use monetary recognition at all, but emphasize providing formal, highly symbolic recognition of significant contributions and publicly recognizing organizational heroes as examples for other employees to follow. They typically involve formal nominations, are granted in limited numbers, and are approved and presented by senior agency officials in formal ceremonies. The items presented, such as engraved plaques or gold medals, may be fairly expensive to obtain. However, they are principally symbolic in nature and should not convey a sense of monetary value.
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  • In some limited circumstances merchandise items could be used as an honorary award or informal recognition award. Merchandise may be used for awards purposes if and only if the item meets the criteria for an honorary award or an informal recognition award. Agencies need to be aware that the Internal Revenue Service (IRS) considers merchandise to be a taxable fringe benefit that must be taxed on its fair market value. Further questions on taxable fringe benefits should be directed to the IRS.
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  • Yes. An agency may give length of service certificates and/or pins in recognition of years of service in the Government of the United States. The agency decides whether to credit both civilian and military service when computing eligibility for career service recognition. Note: For individual employees, Government service as defined for purposes of issuing length of service certificates is not necessarily identical to "creditable service" used to calculate eligibility for things such as leave accumulation or retirement.
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  • Agencies may present such certificates and vouchers if they are being used as informal recognition awards. Merchant gift certificates should not be confused with cash surrogates (which are vouchers or checks that can be easily and widely redeemable for cash, not merchandise). Gift certificates usually are given when the intent is to give something but let the recipient make the final choice. Merchandise certificates cannot meet a cash surrogate's criterion of being easily negotiable because of limitations on where, how, and for what they may be redeemed. Gift certificates fail to meet the criteria for honorary awards because they convey a clear monetary value and cannot be characterized as symbolizing the employer-employee relationship. Consequently, the only circumstance where a gift certificate may be used to recognize an employee contribution is as an informal recognition award, which may not exceed nominal value. Agencies also need to be aware that the Internal Revenue Service (IRS) considers gift certificates to be taxable fringe benefits that must be taxed on their fair market value. The face value of a gift certificate would be considered its fair market value. Further questions on taxable fringe benefits should be directed to the IRS.
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  • Honorary awards represent symbolic formal recognition. Items presented as honorary awards must meet all of the following criteria: The item must be something that the recipient could reasonably be expected to value, but not something that conveys a sense of monetary value. The item must have a lasting trophy value. The item must clearly symbolize the employer-employee relationship in some fashion. The item must take an appropriate form to be used in the public sector and to be purchased with public funds.
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