Bonuses were given to more than half the 531 employees of the state's Administrative Services Department in 1987, according to officials in the Finance Division.

The percentage was the largest in any agency since the final year of former Gov. Scott M. Matheson's last term. But the total amount - $107,326 - came in second last year to the Social Services Department, which spent $109,367 on bonuses.Officials in Gov. Norm Bangerter's office defended the rewards as necessary for morale and production. They said Bangerter was encouraging all agencies to set guidelines by which employees can qualify for bonuses.

Barclay Gardner, Bangerter's executive assistant, said the large percentage increase in administrative services is due to an unusual number of projects completed during the year.

He said the bonuses were especially important because many state employees earn low wages. Bangerter recently decided to lift a ban on merit raises for state employees.

"In order to keep up production you have to give incentives," Gardner said.

Bonuses were given to 305 employees within the department, or 57.4 percent. The average award was $351.89 and the largest was $2,000.

Carolyn Lloyd, executive director of Administrative Services, said awards larger than $300 are screened by a committee that includes one employee from each division. Lloyd said she has the final word on all bonuses within the department.

"We've tried to promote incentive awards," she said, noting bonuses tend to be granted more frequently when raises are restricted.

The percentage was high partly because the department often grants bonuses for work on successful projects, rewarding all employees who participated. Workers and supervisors are encouraged to nominate employees for awards, Lloyd said.

The state's Financial Institutions Division had the second highest percentage of rewards, giving 47.2 percent of its 36 employees bonuses averaging $628.41. Although Social Services outspent all other agencies, only 21.7 percent of its 4,425 employees received rewards.

Reed Searle, Bangerter's chief of staff, said state agencies have granted few bonuses under the Bangerter administration.

"The state hasn't been using the bonus system hardly at all," he said. "The governor has encouraged other departments to put together an evaluation process to get extra productivity out of employees."

Bonuses are a "good management tool," he said.

During the last year of Matheson's administration, state agencies gave out $1.1 million in bonuses ranging from $25 to $7,000. That year, 1984, administrative services rewarded 72.2 percent of its employees with bonuses averaging $879.48.

During 1987, the state granted a total of $417,315 in bonuses, the largest amount given during the Bangerter administration. Statewide, 12 percent of the employees were rewarded.

Bangerter decided against continuing the wage freeze last month because the state had hired many new workers at low wages and was unable to grant an increase when the employees finished the initial six-month probation, Searle said.

The governor has asked the personnel division to develop guidelines for merit raises, Searle said.