Hegseth directs DOD leaders to soon issue bonuses up to $25K to high-performing civilian employees

Some members of the Defense Department’s civilian workforce may soon receive sizable monetary awards under an edict from Pentagon chief Pete Hegseth.

In a Dec. 15 memo to DOD leadership, combatant commanders, and defense agency and field activity directors, Hegseth ordered officials to reward high performers.

“In addition to the ongoing efforts across the Department to develop plans of action to retain, reward, and recognize our outstanding civilian employees, I hereby direct all DoW Component heads and Principal Staff Assistants (PSAs) of the Office of the Secretary of War to take immediate action to recognize and reward our very best civilians with meaningful monetary awards consistent with the relevant existing civilian awards authorities for each pay system (Senior Executive Service, Senior Professional, General Schedule, Federal Wage System, alternative personnel systems, etc.) included in Department of Defense Instruction 1400.25, Volume 451, ‘DoD Civilian Personnel Management System: Awards.’ This initiative is independent of any awards previously executed,” he wrote.

The Trump administration has rebranded the Department of Defense as the Department of War, or DOW.

Per Hegseth’s directive, component heads and principal staff assistants will have decision authority regarding the number of award recipients and award amounts for the employees under their purview.

“To best recognize our civilian workforce, monetary awards of 15 to 25 percent of basic pay, up to $25,000, are authorized for the top 15 percent of performers. If Component heads or PSAs wish to reallocate funding to support awards beyond the 15 percent rate, they may do so within their internal budget. DoW Components and PSA offices will coordinate with their respective Financial Management and Comptroller organizations concerning availability of funding and budget planning,” the SecDef wrote in the memo that was co-signed by Deputy Secretary of Defense Stephen Feinberg.

The awards are to be “effectuated” no later than Jan. 30, 2026.

The directive from Hegseth and Feinberg follows previous guidance issued by Undersecretary of Defense for Personnel and Readiness Anthony Tata telling DOD leaders that they’re “expected to utilize all available authorities to strategically retain, reward, and recognize high-performing civilian employees, particularly those in critical skill areas essential to mission readiness.”

Hegseth’s new edict to recognize top performers comes after the second Trump administration reduced DOD’s civilian workforce by more than 50,000 employees this year via the Deferred Resignation Program and other measures. Those cuts were part of the administration’s so-called Department of Government Efficiency (DOGE) efforts to achieve cost savings.

In the Dec. 15 memo, Hegseth noted that DOD civilians play an essential role in the military’s success.

“The uncertainty and adversity inherent in all periods of change can test even the most elite workforce. Further, the longest Government shutdown in American history imposed severe strain on our civilian workforce. The resilience our civilian teammates have demonstrated throughout this challenging time is an inspiration and deserves to be recognize,” he wrote.

Separately this week, President Donald Trump and Hegseth announced a so-called “warrior dividend” for military service members that will include a one-time, tax-free payment of $1,776 for eligible troops in pay grades O-6 and below. Those bonuses were expected to go out by Dec. 20, a defense official told DefenseScoop.