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TO:  Department Directors and Autonomous Agency Heads
FROM:  Governor Jennifer M. Granholm
DATE:  March 29, 2007
SUBJECT: Moratorium on Performance Pay Awards

Given the fiscal crisis currently confronting state government, effective immediately and through September 30, 2007, a moratorium is imposed on the payment of performance pay awards by department and agencies within the executive branch of state government.  As employees throughout state government continue to do more with less, rewarding a select few with a salary adjustment or monetary bonus is demoralizing to others and the suspension of all performance pay awards represents a prudent and fiscally responsible course of action.  Accordingly, I direct:

A. During the remainder of the fiscal year ending September 30, 2007, no state department or agency may expend any funds for "Performance-pay awards" authorized under Department of Civil Service Rule 5-3.4(c)(2).  Increases in base salary or lump sum awards under the rule are prohibited during the remainder of Fiscal Year 2006-2007.

B. The Department of Management and Budget, State Budget Office, State Personnel Director, and Office of the State Employer are empowered to take all necessary actions to enforce the requirements of this Directive and any related action taken by the Civil Service Commission.

C. This Directive applies to all departments and agencies subject to supervision by the Governor under Section 8 of Article V of the Michigan Constitution of 1963. This Directive is effective immediately, and remains in effect through September 30, 2007.

D. A copy of this Directive shall be transmitted to the Civil Service Commission and the Civil Service Commission is urged to take any action necessary to ensure that the moratorium on performance pay awards for Fiscal Year 2006-2007 extends to all employees within the classified state civil service.

I extend my sincere appreciation for your assistance and the continued hard work of state employees as we respond to the state's difficult fiscal condition.