United States of America


In the Matter of







Case No. 00 FSIP 22





    Local 1547, American Federation of Government Employees, AFL-CIO (Union) and the Department of the Air Force, Luke Air Force Base, Luke AFB, Arizona (Employer) filed a joint request for assistance with the Federal Service Impasses Panel (Panel) to consider a negotiation impasse under the Federal Service Labor-Management Relations Statute (Statute), 5 U.S.C. § 7119.

    Following investigation of the request for assistance, the Panel determined that the dispute, which involves performance awards under a two-level performance appraisal system, should be resolved on the basis of written submissions from the parties, with the Panel to take whatever action it deemed appropriate, which may include the issuance of a Decision and Order. Written submissions, including rebuttal statements, were made pursuant to this procedure, and the Panel has now considered the entire record.


    The Employer is responsible for training pilots to fly F-16 fighter jets while maintaining a high state of expeditionary responsiveness. The Union represents approximately 743 General Schedule (GS) and Wage Grade (WG) employees. They occupy a variety of administrative, technical, and clerical positions, and also work in various trades and crafts; their pay grades range from GS-1 through -12, WG-3 through -14, and WL-7 through -10. The parties’ collective-bargaining agreement (CBA) is due to expire on December 3, 2000.


    The parties essentially disagree over how the performance awards program should operate under a two-level (Acceptable/Unacceptable) performance appraisal system.


1. The Employer’s Position

    The Employer proposes the following wording:

With the available funds in the organization awards program, the Awards Approving Official will grant Performance Awards to all employees who receive an Acceptable rating taking into consideration various circumstances during the rating period. Such circumstances for any exceptions include, but are not limited to: disciplinary action, extended sick leave, insufficient award justification, leave without pay, length of time in position, long-term full-time training, promotion, and unacceptable rating.

    Its proposal is consistent with 5 U.S.C. 4505a (a)(1), which states that "an employee whose most recent performance rating was at the fully successful level or higher (or the equivalent thereof) may [emphasis added] be paid a cash award under this section." Unlike the Union’s proposal, it does not require management to grant performance awards when employees receive a "fully successful" or equivalent rating. For this reason, the proposed wording is also consistent with supervisors’ "statutory duty and discretion to determine whom to reward." The adoption of its proposal, moreover, would maintain the current practice at the installation requiring a supervisor to "recommend a subordinate for recognition in conjunction with the appraisal."

    The change from a five-level to a two-level rating system "does not require mandatory performance awards nor does it eliminate continued and superior contributions by employees." Part C of Luke AFB Form, Civilian Rating of Record, "already agreed upon by the Union and management," requires an award justification. This would provide the Award Approving Official with information to determine, if funds are available, whether "justification is sufficient for recognition and the type and amount to be awarded." In this same vein, its proposal includes a number of factors to be considered by the Award Approving Official in determining whether an award is warranted. Such management flexibility was endorsed by the Panel in a recent case.(1)

    The "mass payment of awards" based solely on ratings has been viewed with disfavor by Congress, and in some cases "even resulted in limitations on awards spending imposed via appropriations bills." It could also lead to awards being "spread so thinly (assuming nearly 100 percent pass) they lose their meaning, tend to be seen as an entitlement, and are often seen as insignificant and/or insulting by employees themselves." In addition, while the Union’s proposal provides a means for disapproving performance awards, it is unclear what "uniform criteria" may be considered when management determines who will receive an award, which could result in "third party involvement." Nor is it possible to apply uniform criteria when comparing work contributions of employees who occupy diverse positions. This is why "management’s judgement is crucial in determining which employees receive performance awards." The Union would also require written notice of disapproval to an employee, thus "relegating this process to an entitlement similar to that of a within grade increase," and creating "an unnecessary burden" on management. In conclusion, "management must retain full authority to grant and determine the amount of the award considering many factors, thereby preventing perceptions of recognition being arbitrary or capricious."

2. The Union’s Position

    The Union’s proposal is as follows:

With the available funds in the Commander’s awards program, when the unit commander determines performance awards will be granted, all employees who receive an Acceptable rating during the appraisal period, shall be recommended for an equal award as determined by their unit commander (i.e., percentage-based or dollar-based). Such approval shall not be withheld unless the decision is based on criteria that are uniformly applied to all employees. Notice of disapproval must be in writing and explain the reason(s) for the disapproval.

The Luke AFB Performance Appraisal Form shall be altered to incorporate the written explanation for disapproval.

    The proposal is not only fully consistent with applicable laws and regulations, but "when the Activity/Commander determines that performance awards shall be granted . . . employees who receive the Agency’s highest performance rating should be recommended for and receive such award based on uniformly applied criteria, which is the annual rating of record." Contrary to the Employer’s position, the Union’s proposal does not remove the Commander’s right to determine whether awards will be granted. If a determination is made to grant awards, it also gives the Commander two options, percentage or flat rate, which "provide flexibility for commanders to control the amount of money to be granted and maintain a fair and equitable program." In addition, its proposal "goes further" by obligating supervisors "to treat employees equally and base their recommendation(s) to the Commander on uniformly applied criteria." By the same token, it also is "not unreasonable" to require management to provide written notification explaining to employees who receive an Acceptable rating why they are not being granted awards if others are who have the same rating.

    Since there is no statutory or regulatory requirement for management to provide justification of awards which are equal to or below 10 percent of an employee’s basic rate of pay, it is the Employer’s proposal, and not the Union’s, that imposes "an unnecessary burden" on supervisors. In this regard, the Union has not agreed with the Employer to use Part C of Luke AFB Form 860A. As this form "is part of the issue at impasse," it should not have been used by the Employer to support its position. While the Union does agree that "noteworthy contributions" of employees warrant recognition, this should be achieved through other available award programs (e.g., special act or service awards). If the Employer is concerned about how Congress will view its performance awards program, it "should not have initiated a change" in its performance appraisal system. Further, the Union acknowledges that its proposal "may" cause performance awards to lose their meaning, but this is an inherent consequence of the Employer’s decision to degrade performance ratings by adopting a pass/fail system. Finally, "it is the Union’s opinion" that through its proposal the Employer "wishes to condone the practice of arbitrary and capricious distribution of awards by some of its supervisors." The Union’s proposal, on the other hand, "will aid in the prevention of these practices and thereby reduce the number of employee complaints on this issue."


    After carefully considering the evidence and arguments presented by the parties, we shall order the adoption of a modified version of the Employer’s proposal to resolve the dispute. Preliminarily, we note that both of the parties’ proposals appear to be fully consistent with the law and Government-wide regulations pertaining to performance awards programs. Resolution of the impasse, therefore, depends on an assessment of which approach would provide the better awards program. This assessment is complicated by the fact that the dispute arises in the context of a change to a two-level performance appraisal system. In this regard, it appears that the Union’s proposal is at least partially motivated by resistance to this underlying change. As we articulate our reasons for adopting the Employer’s basic approach in the following discussion, the parties are reminded that the merits of a two-level performance appraisal system are not before the Panel.(2)

    Although the record does not include a detailed explanation of the parties’ current practices with respect to performance awards, the Employer’s proposal would continue to permit supervisors to exercise discretion when recommending subordinates for such awards. More precisely, it acknowledges that meaningful distinctions can and should be drawn comparing the contributions of individual employees in accomplishing the mission even though they all receive an Acceptable performance rating. By contrast, the Union’s proposal essentially would guarantee that all employees with the same performance rating also would receive equal performance awards. There is no evidence, however, that under the current system all employees with a level-three rating or better received performance awards, let alone awards of equal amounts. Moreover, by the Union’s own admission, because awards budgets are limited, if all employees with Acceptable ratings receive monetary awards they could lose their meaning. On the basis of these considerations alone, we find the Employer’s overall approach superior to the Union’s.

    This is not to say that the Employer’s proposal presents no difficulties. While the record fails to substantiate the Union’s allegation that some supervisors are guilty of arbitrary and capricious distribution of awards, it nevertheless appears that any awards system based on supervisory discretion will be subject to charges of personal favoritism.(3) Because information often serves to reduce conflict, we shall modify the Employer’s proposal by adding wording requiring management to supply award data to the Union on an annual basis which show the amount of each performance award recommended by each supervisor, and how awards were distributed on a race and national origin basis. On another point, we believe the list of "circumstances" which the Awards Approving Official would apply in deciding not to grant an award should be all-inclusive. In our view, the Employer has had ample time to provide an exhaustive list. The list it proposes also contains an item which appears to be self-contradictory. For these reasons, its proposal shall be modified accordingly. Finally, the parties’ submissions suggest they do not agree whether supervisors’ award recommendations should be submitted on AF Form 860A, Part C. To ensure that their entire dispute is brought to closure, consistent with our decision to adopt the Employer’s overall approach to performance awards, we shall order that the form be used when recommendations are made.


    Pursuant to the authority vested in it by the Federal Service Labor-Management Relations Statute, 5 U.S.C. § 7119, and because of the failure of the parties to resolve their dispute during the course of proceedings instituted under the Panel’s regulations, 5 C.F.R. § 2471.6(a)(2), the Federal Service Impasses Panel under § 2471.11(a) of its regulations hereby orders the following:

    The parties shall adopt the following wording:

With the available funds in the organization awards program, the Awards Approving Official will grant Performance Awards to all employees who receive an Acceptable rating taking into consideration various circumstances during the rating period. Such circumstances for any exceptions are: disciplinary action, extended sick leave, insufficient award justification, leave without pay, length of time in position, long-term full-time training, and promotion.

All performance award recommendations will be justified in