WHERE DID THE INCENTIVE AWARDS PROGRAM COME FROM?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86-00114R000100080011-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 15, 2016
• Document Release Date: November 28, 2001
• Sequence Number: 11
• Content Type: MAGAZINE

Where Did The Incentive Awards
Program Come From?
By William Dennis
Incentives have been used
throughout man's history; they are
by no means a recent phenomenon.
Often, awards are given to groups
and individuals who surpass normal
performance standards or suggest
new and innovative ideas.
The Scottish shipbuilding indus-
try was the first to be recognized
as establishing an official incentive
program when William Denny start-
ed one in his shipyards in 1880. The
1880's also brought about the first
incentive program in the United
States when the Yale and Towne
Manufacturing Company of Stan-
ford, Connecticut, introduced its
program. This was closely followed
by `the incentive awards program of
the National Cash Register Com-
pany in Dayton, Ohio, in 1894.
Government offices were soon to
follow with incentive programs of
their own when the British estab-
lished a program of suggestion
awards in its ordnance factories in
1903.
The United States Government
applied the incentive concept on
July 17, 1912, by passing an act
that authorized the Secretary of
War to award cash for suggestions
offered by the Army's ordnance
shopworkers. In 1919, the Depart-
ment of 'the Navy, under Acting
Secretary Franklin D. Roosevelt,
initiated an incentive program that
was even more active than that of
the Army.
During war times, increased pro-
ductivity and creativeness were a
national necessity, but between
World Wars I and II incentive pro-
grams were either drastically re-
duced or totally eliminated.
The Mead-Ramspeck Act of Au-
gust 1, 1941, authorized salary in-
creases to certain Federal employ-
ees for "meritorious service," the
only type of award that could be
given employees by agencies at the
time without special legislation. But
within 1 year after the attack on
Pearl Harbor, about 1,400 new incen-
tive systems were being employed
by industry. With war again as a
motivator, the Navy Department in
1943 reinstituted its suggestions
program under the old act of July 1,
1918. The Department of the In-
terior, the Maritime Commission,
and the War Department, through
special provisions included in their
appropriations acts, were permitted
to give cash awards for adopted
suggestions resulting in improve-
ments or economy in operations.
When World War II ended, the
Congress passed Public Law 600
which extended the employee sug-
gestion program to Government
Approved For Release 2002/01/08 :CIA-RDP86-001148000100080011-0 1
 agencies in general, and war was
no longer the prime motivator. The
tide was beginning to turn regard-
ing incentive and suggestion pro-
grams in the Federal Government.
Between 1946 and 1954, only spo-
radic incentive awards programs
were employed within the Federal
Government with several different
laws of limited coverage being ap-
plied, but the concept of nonwar-
time incentive programs was firmly
established.
In 1954, the Congress determined
that the Federal Government need-
ed an up-to-date incentive awards
program. Shortly after the enact-
ment of the Government Employ-
ees' Incentive Awards Act on Sep-
tember 1, 1954, President Dwight D.
Eisenhower gave his support to
congressional initiative when he
stated, "The vast complexity of
modern government demands a
constant search for ways of con-
ducting the public business with
increased efficiency and economy.
I am firmly convinced that employ-
ees of the Federal Government can,
through their diligence and compe-
tence, make further significant con-
tributions to the important task of
improving Government operations."
Public Law 763, Title III, 83rd Con-
gress, established the Government
Employees' Incentive Awards Pro-
gram, effective November 30, 1954.
This law repealed previous laws on
the subject and, for the first time,
established a Governmentwide pro-
gram directed by the Civil Service
Commission. This program not only
provided new flexibility and im-
provement in the incentive awards
system, it also authorized perhaps
the most significant aspect-a cash
and honorary awards structure. Un-
der the Commission's guidance,
each agency established an incen-
tive awards program that would
meet 'the individual agency's needs.
Legislation permitted them to in-
crease their cash awards substan-
tially, up to $5,000 on their own
authority, and as high as $25,000 if
approved by the Civil Service Com-
mission. The law also enabled an
employee to receive awards from all
agencies that benefit from a sug-
gestion, eliminated the annual limit
on total cash awards an agency
could grant for adopted suggestions,
and extended the awards program
to cover inventions by Federal em-
ployees.
Both cash awards and significant
honorary awards became empha-
sized. These ranged from informal
commendations and agency high-
level honorary awards to Presi-
dential recognitions. High honorary
~~THE CHIEF SUFFERS FROM AN OLYMPIC SYNDROME"
awards became an increasingly im-
portant part of the Incentive Awards
Program during the 1950's, provid-
ing both Government and non-Gov-
ernment recognition which served
to complement the agencies' hon-
orary awards.
The highest honorary award
granted is the President's Award
for Distinguished Federal Civilian
Service, established in 1958. This
highest award is granted annually
by 'the President to career civilian
employees, generally numbering
five, for achievements so outstand-
ing that they merit greater public
commendation than can be accord-
ed by an award from the head
agency.
Other significant awards of hon-
orary nature presented annually to
2 Approved For Release 2002/01/08 :CIA-RDP86-001148000100080011-0
 Federal employees include the
Presidential Management Improve-
ment Awards, which recognize of-
ficials or organizations making
exceptional contributions to cost
reduction or improved operating
effectiveness of the Federal Gov-
ernment, and the Rockefeller Pub-
lic Service Awards. The Rockefeller
Awards are granted for outstanding
service in each of five fields: ad-
ministration; foreign affairs or inter-
national operations; general welfare
or natural resources; law, legisla-
tion, or regulations; and science,
technology, or engineering.
Another honorary award pro-
gram, the National Civil Service
Lague Awards, consists of both
Career Service Awards to career
employees who exemplify in an out-
standing manner the primary char-
acteristics of efficiency, achieve-
ment, character, and service, and
SpeciaP Achievement Awards to
recognize employees whose single
accomplishments contribute signi-
ficantly to our national well-being.
Other awards include the Federal
Women's Award, which recognizes
women whose career service has
been characterized by outstanding
ability and achievement in execu-
tive, professional, scientific, and
technical fields; the Warner W.
Stackberger Achievement Award,
honoring individuals in public or
private life who have made an out-
standing contribution towards the
improvement of public personnel
management at any level of govern-
ment; and the William A. Jump
Memorial Award for Federal employ-
ees who render outstanding service
in the field of public administration
or who make notable contributions
in this field by demonstrating lead-
ership, creative thinking, and ex-
emplary achievement.
~~ IN KEEPING WITH MY POLItrY OF ENERGY CONSERVA710N..:~
On July 1, 1969, major changes
in the Incentive Awards Program
became effective, based on in-
tensive studies made by the Con-
gress and the Civil Service Com-
mission. The changes were aimed
at streamlining the processing of
suggestions, focusing employee in-
genuity on areas representing econ-
omies or improvements in opera-
tions, and providing greater ob-
jectivity and monetary value in
awards while simplifying proce-
dures and giving supervisors more
authority to make effective use of
incentive awards.
Agency reactions to the changes
were favorable, and the results
have been excellent. Perhaps the
most significant results have been
the increase in the quality of em-
ployee suggestions, the continuing
upward trend in measurable ben-
efits (over $150 million annually
from adopted suggestions over a 6-
year period, and a record $202.1
million for fiscal year 1972), the
speed-up in processing sugges-
tions, and the conservation of valu-
able time on the part of super-
visors and managers who can now
concentrate on suggestions that
save tax dollars and improve op-
erations.
Over the past 20 years almost
two million ideas have been put
into effect, with a current sug-
gestion adoption rate of over 25
percent, and an average cash
award to employees of $83.
Since 1954, a total of almost $2
billion in first year measurable
benefits has resulted from adopted
employee suggestions and $1.6 bil-
lion from special achievements be-
yond job responsibilities.
Clearly, the Federal Incentive
Awards Program has inspired many
contributions within the Federal
Government. Various new and in-
novative ideas have sprung forth
from Federal employees stimulated
by the program. Federal employee
participation in the processes of
Government has been, and will con-
tinue to be, a significant factor in
encouraging and stimulating better
Government operations.
Approved For Release 2002/01/08 :CIA-RDP86-001148000100080011-0