(ii) An action taken under 5 U.S.C. 7521 against an administrative law judge;

(iii) An action taken under 5 U.S.C. 7532 in the interest of national security;

(iv) An action taken under a provision of a statute, other than one codified in title 5 United States Code, which excepts the action from the provisions of title 5 United States Code;

(v) A removal from the Senior Executive Service to a civil service position outside the Senior Executive Service under Part 359 of this title;

(vi) A reduction-in-force action governed by Part 351 of this title;

(vii) A voluntary action initiated by the employee;

(viii) An adverse action for cause taken under Part 752 of this title;

(ix) An action which terminates a temporary promotion within a maximum period of 2 years and returns the employee to the position from which the employee was temporarily promoted, or reassigns or demotes the employee to a different position that is not at a lower grade or pay than the position from which the employee was temporarily promoted;

(x) An involuntary retirement because of disability under Part 831 of this title;

(xi) A termination in accordance with terms specified as conditions of employment at the time the appointment was made;

(xii) An action against a reemployed annuitant;

(xiii) An action against a National Guard Technician.

he or she can meet minimum performance standards.

Reduction in grade means the involuntary assignment of an employee to a position at a lower classification or job grading level.

Removal means the involuntary separation of an employee from employment with an agency except when taken as a reduction-in-force action.

Unacceptable performance is defined in 5 U.S.C. 4301(3).

§ 432.203 Timing of actions.

(a) At any time. Pursuant to the requirements of this subpart, an employee may be reduced in grade or removed at any time during the performance appraisal cycle that the employee's performance in one or more critical elements of the job becomes unacceptable.

(b) Reasonable time. The agency shall identify for the employee the critical element(s) for which performance is unacceptable and give the employee a reasonable time to demonstrate acceptable performance before proposing a reduction in grade or removal under this part.

5 U.S.C.

(c) One-year limitation. 4303(c)(2) places a one year time restriction on the use of instances of unacceptable performance by an employ

ee.

(d) Decision. 5 U.S.C. 4303(c)(1) provides that the decision on the proposed action must be made within 30 days after the date of expiration of the notice period.

§ 432.204 Procedures.

(a) Statutory requirements. An employee under this part whose reduction in grade or removal is proposed under this part is entitled to the procedures specified in 5 U.S.C. 4303(b)(1).

(b) Extension of notice period. 5 U.S.C. 4303(b)(2) provides that the agency may extend the notice period for a reduction in grade or removal under this part for a period not to exceed 30 days. The agency may further extend the notice period with prior approval of the Office of Personnel Management.

(c) Representation. 5 U.S.C. 4303(b)(1)(B) provides that an employ

ee covered by this part is entitled to be represented by an attorney or other representative. An agency may disallow as an employee's representative an individual whose activities as a representative would cause a conflict of interest or position or an employee whose release from his or her official position would give rise to unreasonable costs to the Government or whose priority work assignment precludes his or her release from official duties. 5 U.S.C. 7114(a)(5) and the terms of any applicable collective bargaining agreement govern representation for employees in an exclusive bargaining unit.

§ 432.205 Interim procedures.

Until the date, but no later than October 1, 1981, that an agency has established a performance appraisal system under Part 430 of this title which covers an employee against whom an action is contemplated: (a) A notice of action under this part may be proposed only after:

(1) The agency has discussed with and communicated to the employee the critical elements of the employee's job and the performance standards for the one or more critical elements for which the employee's performance is unacceptable and

(2) The employee has been given a reasonable time and opportunity to demonstrate acceptable performance.

(b) An action may be effected under this part only in accordance with all other requirements of this part.

§ 432.206 Appeal and grievance rights.

(a) Appeal rights. 5 U.S.C. 4303(e) provides for an appeal of an action under this part to the Merit Systems Protection Board.

(b) Grievance rights. 5 U.S.C. 7121(e)(1) requires an aggrieved employee to elect to appeal under this part or when applicable, to file a grievance under the negotiated grievance procedure, but not both.

§ 432.207 Agency records.

(a) When the action is effected. The agency shall preserve all relevant documentation concerning a reduction in grade or a removal which is based on unacceptable performance and make it

available for review by the affected employee or his or her representative. As a minimum, the agency's records shall consist of a copy of the notice of proposed action, the answer of the employee when it is in writing, a summary thereof when the employee makes an oral reply, the notice of decision and the reasons therefor, and any supporting material including documentation regarding the opportunity afforded the employee to demonstrate acceptable performance.

(b) When the action is not effected. 5 U.S.C. 4303(d) governs agency records when an action under this part is not effected.

Garden; (F) the Government Printing Office; and (G) the government of the District of Columbia; but does not include-(1) the Tennessee Valley Authority; or (ii) the Central Bank for Cooperatives; (2) “employee" means-(A) an employee as defined by section 2105 of this title, but does not include an employee covered by the merit pay system established under section 5402 of this title, and (B) an individual employed by the government of the District of Columbia; and (3) "Government” means the Government of the United States and the government of the District of Columbia.

Sec. 4502. General Provisions. (a) Except as provided by subsection (b) of this section, a cash award under this chapter may not exceed $10,000. (b) When the head of an agency certifies to the Office of Personnel Management that the suggestion, invention, superior accomplishment, or other meritorious effort for which the award is proposed is highly exceptional and unusually outstanding, a cash award in excess of $10,000 but not in excess of $25,000 may be granted with the approval of the Office. (c) A cash award under this chapter is in addition to the regular pay of the recipient. Acceptance of a cash award under this chapter consitutes an agreement that the use by the Government of an idea, method, or device for which the award is made does not form the basis of a further claim of any nature against the Government by the employee, his or her heirs, or assigns. (d) A cash award to, and expense for the honorary recognition of, an employee may be paid from the fund or appropriation available to the activity primarily benefiting or the various activities benefiting. The head of the agency concerned determines the amount to be paid by each activity for an agency award under section 4503 of this title. The President determines the amount to be paid by each activity for a Presidential award under section 4504 of this title.

Sec. 4503. Agency Awards. The head of an agency may pay a cash award to, and incur necessary expense for the honorary recognition of, an employee who—(1) by his or her suggestion, invention, superior accomplishment, or other personal effort contributes to the efficiency, economy, or other improvement of Government operations or achieves a significant reduction in paperwork; or (2) performs a special act or service in the public interest in connection with or related to his or her official employment.

Sec. 4504. Presidential Awards. The President may pay a cash award to, and incur necessary expense for the honorary recognition of, an employee who-(1) by his or her suggestion, invention, superior accomplishment, or other personal effort contributes to the efficiency, economy, or other improvement of Government operations or achieves a significant reduction in paper

work or (2) performs an exceptionally meritorious special act or service in the public interest in connection with or related to his or her official employment. A Presidential award may be in addition to an agency award under section 4503 of this title.

Sec. 4505. Awards to Former Employees. An agency may pay or grant an award under this chapter notwithstanding the death or separation from the service of the employee concerned, if the suggestion, invention, superior accomplishment, other personal effort, or special act or service in the public interest for which the award is proposed was made or performed while the employee was in the employ of the Government.

Sec. 4506. Regulations. The Office of Personnel Management shall prescribe regulations and instructions under which the agency awards program set forth by this chapter shall be carried out.

Sec. 4507. Awarding of Ranks in the Senior Executive Service. (a) For the purpose of this section, ‘agency', 'senior executive', and 'career appointee' have the meanings set forth in section 3132(a) of this title. (b) Each agency shall submit annually to the Office, recommendations of career appointees in the agency to be awarded the rank of Meritorious Executive or Distinguished Executive. The recommendations may take into account the individual's performance over a period of years. The Office shall review such recommendations and provide to the President recommendations as to which of the agency recommended appointees should receive such rank. (c) During any fiscal year, the President may, subject to subsection (d) of this section, award to any career appointee recommended by the Office the rank of (1) Meritorious Executive, for sustained accomplishment, or (2) Distinguished Executive, for sustained extraordinary accomplishment. A career appointee awarded a rank under paragraph (1) or (2) of this subsection shall not be entitled to be awarded that rank during the following 4 fiscal years. (d) During any fiscal year (1) the number of career appointees awarded the rank of Meritorius Executive may not exceed 5 percent of the Senior Executive Service; and (2) the number of career appointees awarded the rank of Distinguished Executive may not exceed 1 percent of the Senior Executive Service. (e) (1) Receipt by a career appointee of the rank of Meritorious Executive entitles such individual to a lump-sum payment of $10,000, which shall be in addition to the basic pay paid under section 5382 of this title or any award paid under section 5384 of this title. (2) Receipt by a career appointee of the rank of Distinguished Executive entitles the individual to a lump-sum payment of $20,000, which shall be in addition to the basic pay paid under section 5382 of this

title or any award paid under section 5384 of this title.

Subpart B-Regulatory Requirements of the Office of Personnel Management

§ 451.201 Purpose.

The Government Employees' Incentive Awards Program is designed to improve Government operations and services. Its purpose is to motivate employees to increase productivity and creativity by rewarding those whose job performance and adopted ideas benefit the Government and are substantially above normal job requirements and performance standards.

§ 451.202 Policy.

The Office of Personnel Management encourages agencies to make maximum use of their authorities under Chapter 45 of title 5, United States Code, to establish and administer awards programs that best support and enhance agency and national goals, and meet employee recognition needs.

§ 451.203 Definitions.

In this part:

"Agency," "employee," and "Government" have the meanings given to these terms by section 4501 of title 5, United States Code, as set out in § 451.101;

"Incentive award" or "award" means either a cash award, an honorary award, or both;

"Office" means the United States Office of Personnel Management;

"Plan" means a written statement approved by the head of the issuing agency, implementing law and regulation on the Government Employees' Incentive Awards Program; and

"Presidential award" means an award granted by the President under sections 4504 and 4507 of title 5, United States Code, as set out in § 451.101.

§ 451.204 Responsibilities of the Office of Personnel Management.

(a) The Office shall review agency plans, plan changes, and operation of plans to determine compliance with OPM requirements. When review indi

cates non-compliance by an agency or organization, or when requested by an agency to do so, the Office will provide technical assistance to agencies and take whatever other actions are considered appropriate to bring about compliance.

(b) The Office shall report annually on the results of the awards program to the President, the Congress, and to agencies.

(c) The Director, Office of Personnel Management, shall advise the President on Presidential awards for Government employees, and issue instructions to agencies on how to nominate employees for Presidential awards.

§ 451.205 Agency responsibilities.

(a) The head of each agency shall give personal leadership to the agency's incentive awards program and seek to gain maximum benefits for the Government through improved employee motivation and productivity by providing for:

(1) Equal opportunity for all employees to earn awards by training employees on how they may earn awards, and further training for supervisors and managers on the effective use of incentive awards to improve individual and organizational performance;

(2) Integrity of the program by reviewing agency program results to assure that awards are granted equitably, on the basis of merit, and that, when merited, action is taken to grant awards; and that information is made available concerning persons who have received awards and the reason(s) why each award is granted; and

(3) Greatest motivational impact by allocating an adequate budget and staffing and support services to assure prompt action on all employee suggestions and performance award recommendations and effective promotion and publicity activities.

(b) Each agency head may delegate the responsibilities in § 451.205(a) as deemed appropriate for his or her organization.

(c) The head of each agency shall transmit to the Office:

(1) Award recommendations over $10,000;

(2) Recommendations for Presidential awards including those for mone

tary recognition beyond $25,000 under 5 U.S.C. 4504, as set out in § 451.101;

(3) Any new plan, or change in plan, no later than 30 days prior to the proposed effective date; and

(4) By November 15, annually, a report on program activities for the past fiscal year and a statement of major program goals, objectives and resources for the next year.

§ 451.206 Agency plans.

Each agency shall establish and operate an up-to-date plan which shall provide for:

(a) Delegation of authority and responsibility for approval of awards to the lowest level consistent with sound management practices;

(b) Award recommendations to involve the minimum amount of paperwork and processing which shows that criteria are met, expenditure of appropriated funds for the award is justified, and that a record of an award approved under this part is made in the official personnel file;

(c) Central administration and review of the agency-wide program, including systematic evaluation, planning, and feedback reports to employ

ees;

(d) Time limits for completion of evaluation of suggestions and action on performance award recommendations;

(e) Linkage between the awards program and achievements of national and agency goals and objectives;

(f) Use of management reviews and productivity measurement processes to identify and recommend awards for employees who meet the criteria;

(g) Immediate awards for performance of one-time special acts or services, timely evaluation and processing of other performance awards and suggestions, and prompt presentation of approved awards;

(h) Use of the agency's performance appraisal system(s) as the basis for granting awards based on sustained superior performance of assigned duties;

(i) Effective use of incentive awards to motivate employees, and receptivity to and encouragement of suggestions, to be included in criteria for sustained superior performance awards for supervisors and managers;

(j) Consideration of suggestions and special achievements for wider application both within the agency and Government-wide, and prompt referral when appropriate; and

(k) Recognition granted under this regulation to be a factor in ranking and selecting employees who otherwise meet requirements for promotion.

§ 451.207 Eligibility.

An award may be granted when the suggestion, invention, superior accomplishment or other personal effort:

(a) Benefits the Government as described in 5 U.S.C. 4503 and 4504, as set out in § 451.101;

(b) Was made while the contributor was a Government employee; (c) Has been described in writing; and

(d) Has been approved by the benefiting organization at a management level higher than the individual who recommended the suggestion or performance award, use of the suggestion or invention.

§ 451.208 Additional awards.

In addition to any award granted initially upon local application of a suggestion, invention, superior accomplishment, or other personal effort, a further award may be granted if:

(a) There is wider application, or (b) There are greater benefits than originally determined.

§ 451.209 Payment.

(a) Awards paid under this part are in addition to the regular pay of the recipient, and are subject to the withholding of income taxes.

(b) When an award is approved for an employee of another agency, arrangements shall be made to transfer funds to the employing agency. If the administrative costs of transferring funds would exceed the amount of the award, the employing agency shall absorb the award costs.

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