Reduced number of federal executives deemed top-tier performers under OPM's final regulation
The Office of Personnel Management (OPM) has finalized a rule to implement a "forced distribution system" for measuring the performance of Senior Executive Service (SES) members within U.S. federal government agencies and departments. This new system, scheduled to be published to the Federal Register on Monday, aims to hold agencies and SES members to a higher standard of accountability.
The rule comes in response to concerns that agencies may be incentivized to give the limited spots for higher marks to political appointees rather than career SES members, regardless of their actual performance. Previously, federal regulations prohibited agencies from creating a forced distribution system in employee performance reviews.
Notable differences from the initial proposed regulations include the exclusion of political appointees from the forced distribution requirements. The rule will only impact career SES members.
The new rule aligns with performance practices in the private sector, where companies have used forced distribution in their performance evaluations. OPM believes that the inflation in ratings undermines the SES appraisal system's integrity, as in 2023, about 96% of SES members received top ratings on their performance reviews, while less than 0.5% of executives scored below "fully successful."
Under the forthcoming "forced distribution" model, the number of SES members agencies can rate at the top two levels (4 and 5) in the government's performance review system will be capped. The new system will not limit how many SES members can receive ratings at the lower levels (1 through 3) for their performance.
In addition to the forced distribution system, OPM has also pushed forward a number of other changes affecting SES members, including updating SES performance standards to make adherence to the president's policies the "most critical element" of their reviews. The new rule also removes any parts of performance reviews that assessed senior executives based on diversity, equity, and inclusion.
The Trump administration published guidance in June encouraging agencies to rate fewer employees as high performers and to swiftly discipline or remove any employees who are deemed poor performers. A larger cultural shift is expected over time, with a level 3 performance rating being increasingly recognized as a positive rating. Performance award amounts are expected to increase significantly for those who are still deemed top performers and those who are "truly deserving."
This rule is part of a broader effort to "restore accountability" to the SES, as outlined in an executive order by President Donald Trump. OPM first proposed regulations in May to update the SES performance review system. The final rule by OPM criticizes the current SES performance system for ranking too many federal executives in the highest performance categories.
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