National Performance Awards Agreement
between the
Internal Revenue Service and the National Treasury Employees Union 

I.  Purpose.  This Agreement between the Internal Revenue Service (hereafter the Service) and the National Treasury Employees Union (hereafter the Union) establishes policies and procedures for implementing a National Performance Awards Program to recognize and reward high employee performance during Fiscal Year (FY) 2002.  Article 18 of the National Agreement, as amended by the November 2000 Memorandum of Understanding on the Reopening of the National Agreement (hereafter, the Re-Opener MoU), shall continue to apply to Quality Step Increases (QSIs), bilingual awards, time-off awards, and other related matters, to the extent consistent with the provisions of this Agreement. In this regard, if the specific terms of this Agreement conflict with any other collective bargaining agreement or memorandum of understanding negotiated by the Parties, the terms of this Agreement shall govern.  

II.  Performance Award Funding.  Performance awards covered by this Agreement shall be paid out in September of 2002. In this regard, the Service has determined that in Fiscal Year (FY) 2002, it will establish an overall awards budget for bargaining unit employees of an amount equivalent to 1.42% of total estimated aggregate bargaining unit payroll (excluding benefits).  Of that amount, the Service has further determined that at least 90% shall be used to fund employee performance awards in accordance with the following procedures, with the remainder of that amount (that is no more than 10%) used to fund discretionary awards for bargaining unit employees; however, in this regard, the Service has determined that any funds not otherwise used for said discretionary awards shall be reallocated to the performance awards portion of the budget.  As a general matter, the Service agrees to consult in advance with the Union and consider their recommendations, through the Joint Performance Awards Committee (see Section VIII. below), prior to making its initial distribution of funds from that budget to its various Divisions and equivalents, and/or prior to effecting any subsequent reallocation of such funds among those components. 

III.  Performance Award Pools.  Performance award pools shall generally conform to the Service’s newly established organization structure within each of its major components (that is, Operating, Functional, and Support Divisions). FY 2002 performance award pools are detailed in Appendix A to this Agreement.

IV.  Performance Award Eligibility.  To be eligible for an award, an employee must have been permanently assigned to a Bargaining Unit position during FY 2002, on the rolls as of June 30, and must have received a performance rating of  “Fully Successful” or higher for the rating period. If an employee who is otherwise eligible for a performance award has not been a member of the Bargaining Unit for the entire appraisal year, the award will be prorated based on the number of hours the employee has been assigned to a Bargaining Unit position during FY 2002, as follows: 260 to 520 hours, 25% of the award amount; 521 to 1040 hours, 50%; 1041 to 1560 hours, 75%, and over 1560 hours, 100%. 

V.  Performance Award Participation Rates.  As an amendment to the Parties’ November 2000 Re-Opener MoU, award participation rates (that is, the percentage of otherwise eligible employees in any given performance award pool who receive a monetary performance award) shall be established for each business unit and its various award pools.  These pool-wide rates shall be calculated by the Service, according to the procedures set forth below, and furnished to the Joint Performance Awards Committee established by Section VIII below, for review and validation by no later than September 30, 2001; thereafter, the Service will officially communicate those rates to designated management and union officials responsible for the administration of this Agreement. Participation rates will also be posted on the IRS Intranet.

a. Occupational Categories.  Award participation rates shall be calculated on an annual basis according to nine major occupational categories, corresponding to the nine most populous occupations in the Service (that is, those with 2,000 or more employees): Revenue Agent; Revenue Officer; Tax Examiner; Tax Specialist; Customer Service Representative; Computer Specialist; Secretary; Miscellaneous Clerk and Assistant, including Mail and File Clerk; and Tax Technician.  In addition to these rates, a single “Other” award participation rate shall be calculated for those employees not otherwise covered by one of these occupational categories.  

b. Pool-Wide Rates.  Except as specified below, participation rates shall be calculated and applied separately for each award pool described in Appendix A.  The participation rate for each occupational category (including the “Other” category) shall be calculated by dividing the total number of those employees in that pool who received a performance award in FY 2000 by the total number of pool employees in that category.  If there are ten or less employees in a particular category, the category rate for the entire organizational component (for example, the Division) shall be used.  Rates shall be based on employees in a particular occupational category officially assigned to a pool on June 30, 2002.  In this regard, an employee need not have been assigned to a position in that particular category in FY 2000 in order to count in the participation rate calculation for that category in FY 2002.

c. Exceptions.  As an exception to the above, a separate category participation rate will apply within a portion of a performance pay pool (for example, to a particular State or Territory) under certain limited circumstances.  In this regard, the Service will also calculate separate category participation rates within each pool for each Territory (for those components that have them) or State (for those components that do not).  Where a particular State or Territory category participation rate differs from the pool-wide category rate by plus or minus 10%, the difference between the pool-wide rate and the State or Territory rate shall be divided in half and added or subtracted, as appropriate, to the pool-wide rate.  The resulting percentage shall serve as the category participation rate for that particular State or Territory, as applicable.  However, where there are ten (10) or less category employees in a particular State or Territory, the category rate for the entire pool shall automatically apply. (Note: See example1 below)

d. Tied Average CJE Scores. If, in applying the established award participation rate to employees in a particular pool, the actual percentage of employees who are eligible for a monetary performance award exceeds the established participation rate because of tied average CJE scores, the award participation rate for that pool will be adjusted to the next highest average CJE score among employees in that occupation.  (Note: See example 2 below) An honorary performance award (in the form of a “promotion point,” as provided by Article 13 of the National Agreement) will be granted to all employees who do not receive a monetary award as a result of this Section. 

VI.  Performance Awards Shares.  Pursuant to Section II.B.1 of the Memorandum of Understanding on the Reopening of the National Agreement, which amended Article 18 of the Parties’ National Collective Bargaining Agreement, the computation of awards for eligible Bargaining Unit employees will be according to a “share” system.  In this regard, if an otherwise eligible employee whose average Critical Job Element (CJE) score is within the category participation rate for his or her performance award pay pool, that employee will receive an award based on the number of shares he or she has earned, multiplied times the value of a share in that employee’s particular performance award pool.  (See Section XI for procedures regarding tied scores.)  An employee’s shares are determined by multiplying his or her average CJE score by the employee’s General Schedule grade.  The dollar value of an individual share is then determined by dividing the funds allocated to the employee’s performance award pool by the total number of individual shares earned by all employees in that pool.  Awards are subject to the maximum and minimum limits as described in Section VII, below, and in Appendix B. 

VII.  Performance Award Minimums and Maximums.  For FY 2002, performance awards shall be subject to minimum and maximum limits.  Those limits shall be based on FY 2000 award data and shall be established on a Service wide basis for each occupational category identified in Section V. above, including the “Other” category.  (See Appendix B.)  To the extent that the minimum and maximum limitations cause a deficit or surplus of funds in any given performance award pool, the Service will reallocate funds to or from that pool in accordance with Section II, above.  Cash awards granted in lieu of Quality Step Increases (QSIs) in accordance with Article 18, Section 2B of the National Agreement are not subject to the minimum and maximum amounts described in this Section. 

VIII. Joint Performance Awards Committee.  The Parties will establish and charter a Joint Performance Awards Committee (JPAC) to provide guidance with respect to oversight and implementation of this Agreement, as well as on other matters related to bargaining unit performance management and awards, as agreed to by the Parties.  

a. The JPAC will evaluate, and as appropriate, make recommendations to the National Parties concerning adjustments to performance award minimums and maximums described in Section VII of this Agreement, as well as to the occupational categories covered thereby.  The JPAC will also make recommendations regarding a public recognition program for award recipients. 

b. The Committee will be composed of four Service representatives and four Union representatives.  A Service representative and Union representative shall co-chair the Committee.  Those Union representatives that are bargaining unit members shall be provided with official time, as well as travel and per diem expenses, to discharge their Committee responsibilities, to the extent authorized under the National Agreement.  Either party may bring in subject matter or technical experts. Thereafter, the Committee shall meet on a quarterly basis in the Washington D.C. area and may meet more frequently upon agreement by the Parties. 

c. The Committee will hold an initial meeting in September/October, 2001, at which time it will review and ratify the performance award pool participation rates developed under this Agreement. 

IX.  Dispute Resolution.  Systemic problems with implementation of this Agreement may be raised by either Party to the JPAC by referring said dispute in writing to the other Party’s Committee co-chair.  Thereafter, the JPAC co-chairs shall meet within thirty (30) calendar days to attempt to resolve the matter.  If the matter cannot be resolved by the JPAC, the Party raising the issue may invoke arbitration, in accordance with the terms of Article 43 of the Parties’ National Agreement.  In lieu of this procedure, the Parties may agree to an alternative expedited dispute resolution process, which may include the appointment of an arbitrator empowered to issue bench decisions.  Individual grievances regarding the application of this agreement shall be handled under the negotiated grievance procedures.  However, the parties may by mutual agreement use the JPAC process. 

X.  Reports.  To the extent that its information systems permit, the Service will prepare and provide a comprehensive quarterly report to the JPAC on the various aspects of the National Performance Awards Program.  The details of that report shall be determined by the JPAC.  

XI.  Effective Date and Duration.  This Agreement shall become effective thirty (30) calendar days from its date of execution (as indicated by the signatures below), or upon agency head approval, whichever comes first.  It will remain in effect for the FY 2002 appraisal cycle, including the distribution of awards pursuant to ratings rendered therein, unless otherwise extended by the Parties.  Further, either Party may reopen this agreement at any time prior to September 30, 2002. 

For the Union                                                 For the Employer

Colleen M. Kelley, NTEU                                     Bob Wenzel, IRS
National President                                               Deputy Commissioner

Frank Ferris, NTEU                                             David Mader, IRS
National Executive Vice President                   Assistant Deputy Commissioner

Michael B. Filler, NTEU                                      Ronald P. Sanders, IRS
Director of Negotiations                                     Chief Human Resources Officer

 Appendix A: Performance Award Pools 

Performance Award Pools.  FY 2002 performance award pools shall generally conform to the Service’s newly established organization structure within each of its major components (that is, Operating, Functional, and Support Divisions), as follows:  

a. Operating Divisions.  For the Wage and Investment (WI) Division, pools shall be established for its Headquarters and each Service Center Campus or portion thereof, as well its several Customer Assistance, Relationships, and Education (CARE) Areas. For the Small Business/Self-Employed (SB/SE) Division, pools shall be established for its Headquarters, its Service Center Campuses or portions thereof, its Compliance Areas, and its TEC organization. For the Large and Mid-Size Business (LMSB) Division, pools shall be established for its Headquarters, as well as for geographic areas that coincide with SB/SE Compliance Areas (except for LMSB’s Areas 11 and 12, which shall be merged into one pool). For the Tax Exempt and Government Entities (TEGE) Division, pools shall be established for its Customer Account Services function, its Employee Plans and Exempt Organizations (EP/EO) Determinations function, and its Government Entities function, as well as for each of its six EP/EO Areas; in this regard, EP/EO Area pools shall include employees in its Programs and Review functions in each of those Areas, with the Mid-Atlantic EP/EO Area also including all TEGE Headquarters and technical employees.  

b. Functional/Support Divisions and the National Headquarters. A separate pool shall be established for the Service’s National Headquarters. For Appeals, pools shall be established for its Headquarters, each of its ten Areas covering SB/SE and TEGE, and its LMSB Unit. For Taxpayer Advocate, pools shall be established for each of its nine areas, as well as a single, combined pool comprised of its Headquarters and Operating Division Taxpayer Advocate (ODTA) employees. For Agency-Wide Shared Services (AWSS), pools shall be established for its five Facilities Operations Areas, as well as separate, organization-wide pools for its Personnel, Procurement, Career Management, and Customer Support functions. For Communication and Liaison, a single pool shall be established for the organization. For Modernization/Information Technology Services (MITS), pools shall be established for each of its computing centers and its functional and program offices, or combinations thereof, as well as the Business Systems Modernization Office (BSMO).