Performance Ratings

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 430 and 534

RIN 3206-AH77

Performance Ratings

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final

regulations to codify longstanding policy regarding retroactive,

assumed, and carry-over ratings of record. These regulations amend the

performance management regulations to explicitly specify that ratings

of record are final upon issuance unless challenged by the employee,

and that retroactive, assumed, and carry-over ratings of record are

prohibited.

DATES: Effective date: November 4, 1998.

FOR FURTHER INFORMATION CONTACT: Barbara Colchao, (202) 606-2720, FAX

(202) 606-2395, email: [email protected].

SUPPLEMENTARY INFORMATION: On April 20, 1998, the Office of Personnel

Management (OPM) issued proposed regulations to codify OPM's

longstanding interpretation of the law regarding the finality of a

rating of record and the prohibition of retroactive, carry-over, or

assumed ratings of record (63 FR 19411). The proposed regulations

addressed four issues: (1) A prohibition against an agency unilaterally

changing a rating that has been issued as a final rating of record to

an employee; (2) a prohibition against an agency going back to provide

a rating of record for a past appraisal period where none was given;

(3) a prohibition against an agency issuing an employee an ``assumed''

rating of record that does not reflect an appraisal of actual

performance; and (4) a prohibition against ``carrying over'' a previous

rating of record to cover more than one appraisal period.

Comments Received

We received comments from four agencies and one union. These

comments, along with changes made to the proposed regulations, are

summarized below.

Comment Summary: One commenter said that inasmuch as these provisions

are longstanding policy it is good to see them finally in regulation.

On the other hand, another commenter questioned why this regulation is

needed and felt the matter should be left to agency discretion and

interpretation.

Response: For a long time, OPM received periodic inquiries

regarding these issues and the number of inquiries has been increasing,

especially as agencies have been developing new performance management

programs to encourage high performance organizations, and to conform to

the requirements of the Government Performance and Results Act. Several

agencies had suggested that these policies be codified in regulation,

in order to provide, and ensure application of, this information in a

more uniform and consistent manner. OPM concurs with this opinion.

Change: No change.

Comment Summary: One commenter asked whether the provision at

Sec. 430.208(i)(2) would apply in those situations where an agency

issues a rating of record to cover a previously unrated period of time

in compliance with the settlement of a grievance procedure. Similarly,

another commenter asked whether this provision would cover settlement

agreements reached through alternative dispute resolution processes.

Response: The intent in this section of the regulation is to

provide for corrective action when ordered by a third party or as part

of a bona fide settlement of a grievance, complaint, or other formal

proceeding permitted by law. Therefore, if, as part of a grievance

procedure, the decision or settlement agreement requires that a rating

of record be provided where none had been given before, and the agency

is able to do so, this would be considered to have been a change

ordered by an appropriate authority as the result of a formal

proceeding for purposes of complying with Sec. 430.208(i)(2). Likewise,

a changed rating of record could result from a bona fide settlement

through an agency's alternative dispute resolution process.

Change: The language at Sec. 430.208(i)(2) has been revised.

Comment Summary: Three commenters stated that by using the issuance

of a new performance plan following a completed appraisal period as the

event that would cause any subsequent ratings of record to be

considered retroactive, the regulation sets up situations where it

would be impossible for their organizations to issue ratings of record.

Response. This certainly was not the intent behind this regulation.

OPM considered setting a 3- to 6-month time frame after the end of the

appraisal period for completing performance appraisals. However, in the

spirit of decentralization, a decision was made not to set a specific,

Governmentwide time frame within which ratings of record must be

issued. Rather, agencies may establish and use such time frames or use

the issuance of a subsequent rating of record as the boundary that

would cause a rating of record, which covers an earlier appraisal

period where no rating of record originally had been given, to be

considered retroactive.

Individual agencies and organizations must determine whether they

need a policy that clearly establishes when it is too late to provide a

rating of record for an appraisal period that has ended. Otherwise, the

issuance of a subsequent rating of record will be considered to clearly

indicate that any former appraisal period(s) not included within the

scope of this single rating of record have been allowed to pass without

the issuance of a rating of record. The regulations prohibit going

back, after the fact, and creating ratings of record for these previous

appraisal periods, unless so ordered by a third party under the

provisions of Sec. 430.208(i)(2).

Change: The language at Sec. 430.208(i) has been revised.

Related Issue

In two separate discussions with agency representatives who were

not commenting on the proposed regulations, an issue arose that is

related to the regulation prohibiting carry over ratings of record. The

discussions were to clarify that current agency policies

[[Page 53276]]

that permit using a previous rating of record for a subsequent

appraisal period only after evaluating the employee's performance and

confirming that it continues to be the same would not violate the

proposed regulation. The regulation prohibits using a previous rating

of record as the actual rating of record for a subsequent appraisal

period without evaluating the employee's performance for that

subsequent appraisal period. Since an actual evaluation of the

employee's performance during the current appraisal period is required

prior to ``revalidating'' or ``recertifying'' the last rating of record

as the applicable rating of record for the current appraisal period, it

does not violate the regulation. The language at Sec. 430.208(h) has

been revised to clarify this.

No comments were received regarding the technical correction, and

these regulations become final as proposed.

Regulatory Flexibility Act

I certify that these regulations will not have a significant

economic impact on a substantial number of small entities because they

apply only to Federal agencies and employees.

List of Subjects

5 CFR Part 430

Decorations, Medals, Awards, Government employees.

5 CFR Part 534

Government employees, Hospitals, Students, Wages.

Office of Personnel Management.

Janice R. Lachance,

Director.

Accordingly, OPM is amending parts 430 and 534 of title 5, Code of

Federal Regulations, as follows:

PART 430--PERFORMANCE MANAGEMENT

1. The authority citation for part 430 continues to read as

follows:

Authority: 5 U.S.C. chapter 43.

2. In Sec. 430.208, paragraphs (a)(1), (a)(2), (a)(3) and (i) are

added; paragraph (h) is redesignated as paragraph (j) and a new

paragraph (h) is added to read as follows:

Sec. 430.208 Rating performance.

(a) * * *

(1) A rating of record shall be based only on the evaluation of

actual job performance for the designated appraisal period.

(2) An agency shall not issue a rating of record that assumes a

level of performance by an employee without an actual evaluation of

that employee's performance.

(3) Except as provided in Sec. 430.208(i), a rating of record is

final when it is issued to an employee with all appropriate reviews and

signatures.

* * * * *

(h) Each rating of record shall cover a specified appraisal period.

Agencies shall not carry over a rating of record prepared for a

previous appraisal period as the rating of record for a subsequent

appraisal period(s) without an actual evaluation of the employee's

performance during the subsequent appraisal period.

(i) When either a regular appraisal period or an extended appraisal

period ends and any agency-established deadline for providing ratings

of record passes or a subsequent rating of record is issued, an agency

shall not produce or change retroactively a rating of record that

covers that earlier appraisal period except that a rating of record may

be changed--

(1) Within 60 days of issuance based upon an informal request by

the employee;

(2) As a result of a grievance, complaint, or other formal

proceeding permitted by law or regulation that results in a final

determination by appropriate authority that the rating of record must

be changed or as part of a bona fide settlement of a formal proceeding;

or

(3) Where the agency determines that a rating of record was

incorrectly recorded or calculated.

PART 534--PAY UNDER OTHER SYSTEMS

3. The authority citation for part 534 continues to read as

follows:

Authority: 5 U.S.C. 1104, 5307, 5351, 5352, 5353, 5376, 5383,

5384, 5385, 5541, and 5550a.

4. In Sec. 534.505, paragraph (b) is revised to read as follows:

Sec. 534.505 Pay related matters.

* * * * *

(b) Performance awards. Performance awards may be paid under 5

U.S.C. chapter 45 and Sec. 451.104(a)(3) of this chapter.

[FR Doc. 98-26623 Filed 10-2-98; 8:45 am]

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