Recognition & Incentive Award Plans
I. Purpose
University of California, Davis supports the acknowledgment of an individual’s special achievements that further institutional goals and objectives, through structured reward and recognition plans. A campus or department unit may determine whether developing an incentive plan is appropriate for their operations, and may design a plan that meets their objectives and operational needs.
II. Definitions
A. Incentive Award Plan-- A formal written plan that provides for a lump-sum monetary payment up to $500 to eligible employee(s) to acknowledge significant and outstanding efforts that result in reduced operating costs or improved operational efficiency. An Incentive Award Plan can also reward individuals or teams for exceptional performance in the form of contributions directly related to a specific University or campus goal or objective. An Incentive Award Plan may consider awards that are either discretionary or based on clearly defined goals and achievements. In either case, the plan should directly support a University or campus goal or objective.
Rewards are not a substitute for base salary increases or an alternative to salary adjustments that would otherwise be appropriate to recognize a significant change in position responsibilities, sustained high performance, or internal or external pay equity.
B. Recognition Award (non-cash) Plan -- A formal documented plan that provides for non-cash items that acknowledge a significant outstanding behavior that supports the Mission, Vision, and Values of the University and/or supports the Principles of Community. Recognition may be given in recognition of efforts including: outstanding achievements, accomplishments, teamwork, problem solving, and/or excellent customer service. A Recognition Plan provides non-negotiable gift cards, certificates, plaques, or a range of pre-selected items of limited monetary value from which a recipient may choose to commemorate her or his accomplishments. Non-cash awards are limited up to $75 in value. Recognition awards with a value in excess of $75 require exceptional approval.
Awards exceeding in value over $75 may have tax consequences.
III. Policy
Incentive Awards
1. Plan Design
Unit management is responsible for ensuring that the design of an Incentive Award Plan is aligned with the University’s or campus’ strategic goals objectives and funded within budgetary guidelines. Incentive Award Plans should:
- Recognize top performers for accomplishment of defined goals and objectives.
- Reward outstanding performance of a specific accomplishment that is beyond normal expectations.
Cash awards should not exceed $500 (net)*. Any proposed exception to this amount must be submitted for consideration to the Associate Vice Chancellor of Accounting and Financial Services (A&FS). Each unit is responsible for developing guidelines regarding its own Incentive Award Plan structure and process.
2. Documentation
An Incentive Award Plan should be documented and follow the guidelines provided below. The plan document should include:
- Name of campus department or unit
- Purpose of the Plan and how accomplishments support University or campus goals and objectives
- Category of eligible employees
- Period of time on which award will be based (fiscal year, calendar year or other appropriate period of time)
- Performance criteria - examples of performance criteria:
- Accomplishment of task(s) that goes beyond the fulfillment of all job duties and normal expectations of the job; or,
- Outstanding performance on a special project or a major accomplishment or special effort that goes well beyond expectations and resulted in a significant positive impact, productivity gain or cost savings
- Selection process - identify how the award recipients will be selected and what positions or committee will select the recipients of the awards
- Type of award
- Number of individual awards expected per award period
- Targeted amount of individual award payments not to exceed the limits noted above
- Total cost of awards per award period
3. Administration
The unit is responsible for securing funding, maintaining all records and documentation, and any subsequent amendments to the plan.
These documents along with University policies and procedures serve as the guiding principles for administration of the plans.
The department is responsible for the administration of the Incentive Award Plan within the approved plan documentation. Payments to employees who have been chosen for an award should be initiated by the department through Payroll processing as a one time payment with a description service code of “ERA”, along with a brief explanation of the employee’s exceptional contribution.
Examples of existing Incentive Award Plans
Recognition Plan
1. Plan Design
Unit management is responsible for ensuring that the design of its Recognition Plan is aligned with the University’s or campus’ strategic goals and is funded within budget guidelines. Recognition plans provide for on-the-spot recognition for such reasons as: outstanding achievements, accomplishments, teamwork, etc.
Recognition (non-cash) awards are limited to $75 in value. Employee recognition awards with a value in excess of $75 require exceptional approval authorized by the Associate Vice Chancellor – Finance. Multiple non-cash awards that exceed $75 within a calendar year will be reported as income on the employee’s W-2. The department is responsible for reporting to Payroll non-cash awards that exceed $75.
2. Documentation
The Recognition Plan must be fully documented and approved by the department head. The plan document must include:
- Name of campus department or unit
- Purpose of plan
- Category of eligible employees
- Period of time on which award will be based (fiscal year, calendar year, or other appropriate period of time)
- Selection criteria- examples:
- Outstanding achievement
- Teamwork
- Type of individual awards and any selection options available to the award recipient (such as non-negotiable gift cards, gift certificates, one month parking permit, plaques, pins, flowers, etc.)
- Total cost of awards expected for award period
3. Administration
The unit is responsible for the administration of the Recognition program, including securing funding, maintaining all records and documentation, and any subsequent amendments to the plan. These documents along with University policies and procedures serve as the guiding principles for administration of the plans.
The purchase of all non-monetary awards, such as gift cards, gift certificates, flowers, pins, plaques, pictures, etc., should be processed following established policies and procedures.
*P&PM 380-50, Employee Non-Cash Awards
