2.34

Achievement Award Program

POLICY OVERVIEW

The University of Texas Health Science Center at Houston ("the university") uses an Achievement Award Program (AAP) as part of its total employee compensation strategy. The purpose of the AAP is to provide an incentive, in the form of a one-time payment, to eligible employees for attaining measurable group goals above and beyond normal job duties that support the university's mission and objectives. The use of an AAP as an incentive tool is at the discretion of the head of each operating unit, or the President for university-wide programs. An AAP is prospective in nature and is based on meeting specific criteria for projects to be completed in the future; it is not a bonus for past performance. Achievement Award payments are one-time payments that do not become part of an employee's recurring base salary. These awards supplement and do not replace the university's base pay or merit pay programs.

POLICY SCOPE

Faculty, administrative and professional, and classified employees are eligible for the types of programs described in this policy.

POLICY CONTACT

For questions regarding this policy, contact Human Resources – Compensation.

PROCEDURE

I. Guidelines

AAPs must comply with the following guidelines: 

• Programs must be prospective in nature.
• Awards must be based on specific future criteria being met.
• Performance measurements must be clearly established prior to program implementation.
• Program information must be communicated to eligible participants.
• Goals and performance measurements must include objective terms that a neutral observer could determine have been met.
• Program awards must be paid from sources other than state or federal funds. (Contact the payment and account facilitation (PAF) team to determine whether or not the funds identified for program awards are appropriate.)
• Effective dates must be defined in the program and cannot be retroactive.
• Programs are funded by the operating unit.
• Programs must be documented using the approved AAP form.
• Employees are eligible to receive total awards not to exceed the greater of $5,000 or 15% of their base salary in a fiscal year from all AAPs in which they participate.
• Individuals may participate in more than one AAP, providing the same goal(s) are not being measured.
• Specified goals and performance measurements must be attained prior to payment.
• Attainment of program goals cannot adversely impact other areas.
• As noted, Achievement Award payments are one-time payments and do not increase an employee's base salary. Award payments to eligible participants are treated as payroll items subject to federal income tax withholding and FICA withholding. Award payments are not eligible for the calculation of employee fringe benefits such as deductions for the Teachers Retirement System program (TRS), the Optional Retirement Program (ORP), or for the payment of insurance premiums. Award payments are included in the calculation of the maximum deferral available under the tax-sheltered annuity program.
• Any Achievement Awards paid to nonexempt employees must be included in overtime calculations under the Fair Labor Standards Act. This is applied retroactively for the effective time period of the program. Funding for Achievement Award payments must be sufficient to cover recalculated overtime payments.

II. Program Review and Approval

The head of the operating unit is responsible for the operation of the AAP within the unit and for its compliance with all relevant guidelines. Each AAP must be approved by the head of the operating unit and by the head of the area, if applicable. A university-wide AAP requires the President's approval.

The AAP must be reviewed and evaluated at least annually by the head of the operating unit to ensure the program's goals are achieved and to determine whether the program will be changed or continued. Each operating unit is responsible for maintaining the AAP form(s) and supporting documentation.

The President reserves the right to change or terminate an AAP at any time. Eligible employees will be notified of any changes to the AAP.

Policy approved 8/98; Updated 02/08