Reward and Recognition Policy

The Company encourages the recognition of excellent performance and achievement through the use of rewards that are creative, flexible, and meaningful. When administered and communicated effectively, reward and recognition are an important part of a total rewards program. Units may choose whether or not to develop Defined Reward rograms. !n the absence of a Defined Reward rogram, units may give rewards in immediate response to specific accomplishments.

Policy Guidelines
I. Definitions

Reward " a one#time cash or non#cash award for significant outstanding performance.

Defined Reward rogram " a documented reward program developed, communicated, and implemented in consultation with the $ffice of %uman Resources for a particular unit. Defined Reward rograms consist of rewards that range from spontaneous to those that are more formal in nature.

II. Guiding Principles

&. Rewards should be given for significant outstanding performance that advances unit goals, and should be tied to a specific accomplishment.

'. Rewards are most effective when they are meaningful to the individual.

C. Care should be ta(en in communication and distribution of rewards so that they are not viewed as entitlements.

D. Rewards may be designed to reflect the uni)ue nature of the unit*s wor( culture and organi+ational structure.

,. Rewards should not be substituted for a competitive salary plan. -or example, rewards should not be used as a long#term alternative to permanent salary ad.ustments when these ad.ustments are appropriate for consistently high performance, significant changes in responsibility, increased value of a position, or internal pay e)uity.

-. Rewards are not ad.ustments to base salary, supplemental compensation, or variable pay programs /such as commission0.

1. Rewards should not be used as a substitute for supplies, support services, or training.

III. Reward Guidelines

&. The following chart summari+es reward value parameters. These values apply to cash awards, as well as to non#cash rewards with monetary value /such as event tic(ets and gift certificates0. Re)uests for exceptions to these guidelines by department managers should be submitted to the individual*s %ead of Department. ,xception re)uests by %ead of Department should be submitted to the $ffice of %uman Resources.

'. These guidelines do not apply to customary wor(#related expenses such as travel, conference attendance, and memberships in professional organi+ations.

C. Through the process of consultation and approval of Defined Reward rograms, parameters may be modified to meet individual unit needs.

D. Units must consult with the $ffice of %uman Resources when cash distributions to an entire unit are being considered. $ffice of %uman Resources must approve such distributions prior to implementation.

Reward Guidelines Reward Value 2o monetary value /such as letters of commendation0 Up to 3455 /non#cash0 Approval Needed 2one 6anager Frequency Per a"a#le$ Person/ ea! &s often as 2o appropriate $ne time per fiscal De minimis

Up to 3455 /cash0 3454 to 34555 /cash and non# cash0 $ver 34555 /cash and non#cash0

6anager %ead of Department %ead of Department

year $ne time per fiscal year $ne time per fiscal year $ne time per fiscal year

fringe benefits 7es 7es 7es

IV. Defined Reward Progra! %onsultation Process Departments interested in creating a Defined Reward rogram should notify the human resource contact in their unit, who will initiate the Defined Reward rogram consultation process with the $ffice of %uman Resources.

Policy Procedure
I. I!ple!entation Guidelines &. &ll Defined Reward Resources. rograms must be designed in consultation with the $ffice of %uman

'. The purpose, process, parameters, and expected outcomes of the reward program should be communicated in writing to the unit and staff. C. &ll expenditures must be consistent with the Company guidelines issued by the $ffice of -inance. D. Cash and non#cash awards should be determined in a manner that considers deductions such as taxes, and their effect on the net amount. II. &nit Responsi#ilities &. The unit will8 4. Design reward programs that reflect the Company guidelines and unit strategic plans. 9. :ee( consultation on the development and approval of Defined Reward rograms. ;. rovide written communication about the purpose, process, and expected outcomes of the reward program to unit faculty and staff.

<. !mplement reward programs in a manner that is consistent with the unit*s written guidelines. =. -und reward programs, reflecting the realities of the University and unit budget, and establish accountability within each unit for use of funds. III. 'ffice of (u!an Resources Responsi#ilities

&. The $ffice of %uman Resources will8 4. rovide guidelines regarding reward program structure and processes.

9. :erve as consultants to units in developing reward strategies. ;. &pproval Defined Reward rograms. <. $versee the use of reward programs. =. :erve as a clearinghouse for best practices. >. rocess payroll taxes for cash and taxable non#cash awards.

IV. Payroll %onsiderations &. $ne#time cash rewards are administered through the additional pay panels of the %R :ystem. Chec(s are issued during the normal payroll cycle. !f a chec( is needed outside of the normal cycle, a written Re)uest for $ff#Cycle Chec( must be sent to the $ffice of %uman Resources, ayroll :ervices '. &ll taxable non#cash awards must be reported to the $ffice of %uman Resources through the additional pay panels in the %R :ystem using the 2on#Cash &ward /2C&0 earnings code. The appropriate taxes will be withheld from the individual*s paychec(. V. a" )aw %o!pliance &. Reward and recognition activities must be in compliance with all applicable tax laws. 'efore issuing awards, offices should wor( closely with the $ffice of %uman Resources, to insure compliance. '. Under tax laws, all staff compensation is sub.ect to income tax unless there is a specific exemption. -ollowing are common types of compensation that are exempt from income tax. !t is important to properly classify compensation to avoid potential payroll tax liability for the Company. -or )uestions regarding these or other income tax exemptions, contact the Company Tax Compliance :pecialist. 4. Transportation ,mployees may be given a transit pass as a non#taxable benefit. 9. Wor(ing condition fringe benefits Costs of wor(ing condition fringe benefits may be provided without treating any part of the payments as income to the employee. Wor(ing condition fringe benefits are expenses that, if incurred by the employee, would be allowed as a deduction. ,xamples include8 a0 seminar fees or expenses in the employee*s field b0 dues to professional or trade organi+ations

c0 maga+ine or .ournal subscriptions for publications in the employee*s field d0 use of Company vehicles for Company business e0 other similar expenses related to the employee*s wor( ;. De minimis fringe benefits De minimis fringe benefits are benefits that are so small that accounting for them would be unreasonable or administratively impracticable. De minimis benefits may only be provided on an occasional basis and must be small in amount. 'enefits valued in excess of 3455 cannot be considered de minimis. Cash payments )ualify as de minimis only if they are for meals or transportation for employees wor(ing overtime. De minimis fringe benefits includes, but are not limited to8 a0 Use of office e)uipment such as copiers or computers for personal use b0 6eal money or taxi fare for employees who wor( overtime on an occasional basis /amount cannot be based on number of hours wor(ed0 c0 $ccasional tic(ets to a sporting or other event d0 'irthday or holiday gifts e0 1ifts due to special circumstances such as outstanding performance, illness, or family crisis. <. ?ualified employee discounts ,mployees may be given a discount of up to 95@ off the price of services provided by the Company or an amount e)ual to the gross profit percentage on any products or goods sold by the Company. ,mployee discounts must be offered on a non#discriminatory basis. =. 2on additional cost services !f the Company would incur no additional cost of providing a service to an employee, the employee is not re)uired to include the value of the service in income. The service must also be provided to the Company*s customers. ,xamples include the free use of hotel rooms by hotel employees or season tic(ets for athletic or entertainment events when the event is not sold out. !f the Company is foregoing revenue, as in the case of a sold#out event /including season tic(ets when all games or events are sold out0, the !nternal Revenue :ervice /!R:0 considers this an additional cost to the Company and therefore income for the employee. The Company does not lose revenue when tic(ets to games or events that are not sold out are given to employees.

>. ,mployee achievement awards lans to provide non#taxable employee achievement awards may be developed. The awards can be provided for length of service or safety. They must be awards of tangible personal property given as part of a meaningful presentation, such as an awards dinner or ceremony. ,mployees must have at least five years of service to receive a service award. 6anagers, administrators, clerical employees, and other professionals are not eligible for safety awards. :ub.ect to !R: rules, awards cannot exceed 34,>55 per year for an award to a single employee, or an average cost of 3<55 per year if the award is made to more than one employee /if certain conditions are satisfied0.