The Office of Personnel Management (OPM) has issued a proposed rule to significantly change how federal employees are evaluated. If finalized, the regulation would alter performance appraisal practices affecting General Schedule, prevailing rate, and other federal employees.
The proposal is part of a broader effort by the current administration to tighten performance management across government and address what OPM describes as inflated ratings.
A Shift Toward “Normalized” Ratings
A central change in the proposed rule would allow agencies to use forced distribution of performance ratings. This means supervisors may need to ensure ratings follow a more typical distribution rather than clustering at the highest levels.
For years, federal ratings have skewed heavily positive. OPM has noted that a large share of employees receive top ratings, a pattern the agency considers evidence of “ratings inflation.” In the proposed regulation, OPM stated:
A properly functioning rating system that makes meaningful distinctions in performance would not give close to half of all Federal employees the highest possible rating, while rating almost no employees as underperforming.
[I]t is not surprising that Federal employees also perceive their work unit to be performing exceptionally well. For example, recent FEVS data demonstrates that 88 percent of employees believe employees in their work unit ‘always’ or ‘most of the time’ ‘meet the needs of our customers.’ Ten percent believe they do so ‘sometimes,’ while only 2 percent believe they do so ‘rarely’or ‘never.’ Meanwhile, public trust in government hovers near all-time lows.
Under the proposed approach, agencies would be expected to limit the number of employees who receive the highest ratings and move toward a more balanced distribution.
Removal of a Longstanding Restriction
Current regulations discourage or effectively prevent agencies from imposing rating quotas. The proposed rule would remove that barrier, giving agencies the authority to control rating distributions across their workforce.
This represents a fundamental shift in federal performance management philosophy. Instead of ratings reflecting only whether employees meet established standards, they could also reflect how employees rank relative to their peers.
Changes to the Rating Scale
The proposal would also modify the traditional five-level rating system used across government.
Among the changes:
- The “minimally satisfactory” level could be eliminated from the rating scale.
- Supervisors could assign an “unacceptable” rating more easily, without the higher-level approval currently required in some systems.
Supporters argue these steps would make it easier to address poor performance. Critics say they could weaken employee protections and increase disputes.
We Have Seen This Scenario Before
The concerns about an ineffective performance appraisal system, as it is described in the OPM proposal, are not new.
When Congress debated and passed the Civil Service Reform Act of 1978, a major argument for the new law was that the federal government’s existing performance appraisal system did not meaningfully measure employee performance. The result was that it was very difficult to reward good employees or remove poor ones.
Across the legislative history of the CSRA, Congress repeatedly made the same points:
- Ratings were inflated
- Standards were vague
- Appraisals were not used to manage employees.
Ratings Had Little Real Consequence
Lawmakers argued the appraisal system had become largely symbolic. Performance ratings were often not tied to personnel decisions, so they had little management value.
Congressional materials noted that the system generated frequent complaints and that ratings were not used effectively as the basis for administrative action.
As a result:
- High ratings were common
- Poor performers often remained in their jobs
- Managers relied on disciplinary procedures rather than on performance management.
The Civil Service Reform Act attempted to fix this by requiring critical job elements, written standards, and appraisal systems tied to personnel actions.
If that sounds similar to some of the problems the new OPM proposal is trying to fix, that is because many of the problems still exist. The proposed rule to fix the performance appraisal system is a new attempt to create a system that provides different results than the one implemented after passage of the CSRA.
The Civil Service Reform Act sought to address this problem by requiring objective standards, linking ratings to personnel actions, and giving agencies clearer authority to address poor performance.
That approach has obviously not worked. Here we are again. Over time, many of the changes included in the CSRA were diluted in practice and implementation if not modified by new laws or regulations. The system touted by passing the CSRA eventually reverted to one that largely resembled the one that existed before the law was passed.
The law has remained unchanged since the CSRA was passed. The Code of Federal Regulations (CFR) has not been modified to any appreciable extent. Individual agencies have exercised their authority to make changes to try to create a better system. As noted in this article, “the use of terms relating to ‘ goals’, ‘ objectives’, ‘ competencies’, ‘contributing factors’, ‘alignment’, etc. became prolific in agencies.”
One performance management expert noted that human resources offices generally dislike performance ratings. He summarized the problem with the government’s management of performance ratings in this way:
Over the years, layer after layer of organizational theory terms and content have been tossed into this HR system resulting appraisal forms that print into a dozen or more pages. This fluff is more rhetorical than substantive. Realizing that every employee is given a performance plan, management has again and again inserted its latest terminology into performance appraisal forms and directives. Allowing these terms and distractions from the real business of evaluating job performance reflects a lack of interest and expertise regarding appraisals.
Most HR folks know very little about evaluations… and most like it that way. The importance of this program is commonly reduced to completing the form correctly and meeting due dates – essentially clerical functions. The actual content of elements and standards isn’t well understood. Most of the advice offered up in this regard (such a SMART performance standards) is downright silly.
Summary
The new proposal does not follow the same approach as the CSRA or at least not as the CSRA performance management system was implemented.
The most significant change is a shift toward forced or “normalized” rating distributions.
In practice, this means:
- Agencies could limit the number of employees who receive the highest ratings.
- Supervisors may need to spread ratings across the scale rather than rating everyone solely on whether they met their performance standards.
- Many employees who previously received top ratings could receive a mid-level rating instead.
In the past, federal employees have been rated against their performance standards. Under this approach, ratings may also reflect how an employee compares to coworkers. A forced distribution is likely to mean supervisors would assign different ratings to employees who performed similarly.
In effect, this is what is likely to happen, at least in the initial phase of this new system:
- Fewer employees will receive the highest ratings
- More differentiation among employees based on performance
- Greater impact of performance ratings on career advancement
- Potentially easier action taken against poor performers
The intent of the proposal is to make performance appraisals in the federal government more consequential—and more competitive. If this proposal is finalized and implemented as described, it would bring a significant change to the federal government’s civil service system.
