[Federal Register Volume 63, Number 75 (Monday, April 20, 1998)]
[Proposed Rules]
[Pages 19411-19413]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10266]
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Proposed Rules
Federal Register
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This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 63, No. 75 / Monday, April 20, 1998 /
Proposed Rules
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Parts 430 and 534
RIN 3206-AH77
Performance Ratings
AGENCY: Office of Personnel Management.
ACTION: Proposed rule.
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SUMMARY: The Office of Personnel Management (OPM) is issuing proposed
regulations to codify longstanding policy regarding retroactive,
assumed, and carry-over ratings of record. The proposed regulations
amend the current 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: Comments must be submitted on or before June 19, 1998.
ADDRESSES: Comments may be sent or delivered to: Henry Romero,
Associate Director, Workforce Compensation and Performance Service,
U.S. Office of Personnel Management, Room 7508, 1900 E Street NW.,
Washington, DC 20415.
FOR FURTHER INFORMATION CONTACT: Barbara Colchao, (202) 606-2720.
SUPPLEMENTARY INFORMATION: The purpose of these amendments is to
clarify the Office of Personnel Management's (OPM) longstanding
interpretation of the law regarding the finality of a rating of record
given to reflect the actual work performed during one appraisal period,
which has been the consistent response to agencies' inquiries for many
years. OPM is experiencing an increasing number of inquiries, as
agencies develop new performance management programs to encourage high
performance organizations, and to conform to the requirements of the
Government Performance and Results Act. OPM concurs with the opinion
voiced by several agencies that these policies should be codified in
regulation, in order to provide this information in a more uniform and
consistent manner.
There are four issues addressed in the proposed regulations: (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.
Retroactive Change to a Rating of Record
Agencies are most often confronted with the issue of whether
management has the authority to retroactively change a rating of record
in situations where information about an employee's performance has
been discovered long after the rating was finalized. This situation
generally comes about when an employee has deliberately kept
information from management and, therefore, has exhibited conduct that
would warrant adverse action under part 752, Adverse Actions.
Otherwise, if the information was not deliberately withheld but went
undiscovered at the time the rating of record was prepared, an agency
should review its appraisal process and determine if it is designed to
capture adequately all significant performance information. It is OPM's
position that only in very rare circumstances would a rating official
be unaware of significant performance issues that went undetected at
the time of appraisal due to no fault on the part of the employee or
the rating official.
While no explicit language in the law states that a rating of
record should be considered final, the prohibition on retroactively
changing a rating can be derived from the overall construction and
intent of the performance appraisal statute and regulations, as well as
OPM's regulations addressing reduction in force (RIF). The statute at 5
U.S.C. 4302(a)(3) and 5 CFR 430.102(b)(6) of the regulations require
that the results of performance appraisal must be used as a basis for
appropriate personnel actions. To allow the retroactive change of
ratings of record would result in requiring the agency to correct all
records and personnel actions that were affected by that rating. The
most obvious of these subsequent actions would involve the review of
any pay changes or monetary awards, which were based in whole or in
part on the rating of record, to determine whether the new rating would
have resulted in a different pay or award outcome.
In addition, an agency would be required to scrutinize any
intervening personnel actions that had been affected by the original
rating of record and that would need to be corrected due to the new
rating of record. For example, the regulations that prescribe RIF
procedures implicitly rely on a rating of record that can be assumed to
be final. Furthermore, agencies generally strive to avoid the
perception that RIF actions could be manipulated through the
introduction of new ratings of record. If retroactive changes to final
ratings of record were allowed, agencies would be compelled to correct
any retention register that uses a changed rating of record and would
once again run the risk that employees would perceive an unfairness in
using this changed rating of record, unless the change could be shown
to be a previous miscalculation or administrative error.
Additionally, the very structure of the performance appraisal
regulations leads to the logical conclusion that the intent of the
system is to reach a point of finality when management is held
accountable for issuing a rating of record that represents an
employee's performance for the defined time of the appraisal period.
Sections 430.206, 430.207, and 430.208 of title 5 of the Code of
Federal Regulations regulate and describe the cycle of planning,
monitoring, and issuance of a rating. Section 430.208(g) states that
when an agency extends the rating cycle, a rating of record must be
prepared as soon as practicable after the conclusion of the extension.
Section 430.209(e) establishes a requirement for agencies to report
ratings of record to OPM through the Central Personnel Data File. Taken
as a whole, the regulatory scheme for performance appraisal is
constructed around an appraisal period that concludes with a final
rating of record.
As an exception to the general prohibition regarding retroactively
changing ratings of record, there is a
[[Page 19412]]
relatively limited set of circumstances where an agency might feel
compelled to change a rating of record long after it has been presumed
to be final. An administrative error, such as a rating official who
inadvertently ``checks the wrong box'' and assigns a summary rating
level that does not correspond to the element levels that have been
assigned, would certainly be good cause for an agency's decision to
retroactively change the overall rating of record. Information
regarding the employee's performance during the appraisal period that
provides indisputable proof that the original rating of record was
erroneous, and which was previously unknown or unavailable to the
agency, could form the basis for a decision to retroactively change the
rating. This situation probably would arise most often in cases where
the employee was evaluated against numerical standards with objective
requirements, and where the rating official would have had no
subjective input into the evaluation process.
While OPM believes it was not the intent of the law governing
performance appraisal to allow for independent action by management to
retroactively alter a final rating of record, it does recognize some
circumstances where such a change would be required. These proposed
regulations are designed to be sufficiently flexible to allow for
changes to ratings of record that occur in the normal course of
communication between supervisors and employees close to the original
issuance of a rating of record, as well as changes resulting from
administrative procedures that provide employees with an avenue to
challenge their ratings of record.
Retroactively Issuing a Rating of Record Where None Existed
The second issue addressed in the proposed regulation is the
prohibition against producing a retroactive rating of record for an
appraisal period that has passed and for which no rating of record was
issued. The statute requires the periodic appraisal of employees (5
U.S.C. 4302(a)(1)), and the regulations require that a rating of record
be given to an employee as soon as practicable after the end of the
appraisal period (5 CFR 430.208(a)). When an appraisal cannot be given
at the end of the appraisal period, the regulations already provide for
extending the appraisal period until the conditions to complete a
rating of record are met (5 CFR 430.208(g)). A rating of record then is
issued that covers the entire appraisal period, including the
extension. If the appraisal period was not extended, or if a rating of
record for a later appraisal period was issued, the agency cannot go
back and ``fill in the blanks'' at some future point in time. To permit
such a practice would undermine the basic concepts of performance
appraisal and severely limit the accuracy of the ratings produced due
to the very passage of time involved.
Assumed Ratings of Record
The third issue addressed in the proposed regulation is the
prohibition against issuing to an employee a rating of record that does
not reflect actual performance, but assumes a level of performance
without evaluation. The intent of the law is clear; Congress intended
Federal employees to be evaluated based upon the actual work they
performed during the appraisal period. Some confusion has arisen over
the years because of the process used to include the value of
performance credit when agencies are establishing retention registers
in preparation for a reduction in force. In situations where an
employee did not receive a rating of record, an agency previously
could, for RIF purposes only, assign the value of performance credit
for that appraisal period at the Fully Successful level. Regulations,
published in November 1997, changed the procedures for dealing with
missing ratings of record and changed the reference point for assigning
additional service credit for performance for employees who have no
rating of record to the value assigned to the applicable modal rating
level in the competitive area, or some larger agency population
aggregation. These proposed regulations make no further change to the
reduction in force process. Their sole purpose is to regulate that an
agency may not issue a bona fide rating of record to an employee that
assumes some level of performance since employees are entitled to a
rating of record that reflects their actual level of performance. This
does not impose a requirement that performance must be reflected only
by means of a narrative justification. Agencies are free to design the
process and procedures they will use to evaluate employee performance.
These regulations are intended to ensure that an evaluation of actual
employee performance is the basis of the rating of record.
Carrying Over a Rating of Record
Finally, these proposed regulations would codify the prohibition
against carrying over a previous rating of record into another
appraisal period as a bona fide rating of record. This is obviously
tied closely to the above requirement that employees be given a rating
of record that reflects their performance during a specific appraisal
period. This prohibition does not negate the fact that an employee may
perform at the same level for several years and, therefore,
appropriately be assigned the same summary level in the rating of
record for each of those separate appraisal periods. As noted in 5
U.S.C. 4302 (b) (1) and (2), agencies are required by law to provide
performance standards to employees at the beginning of each appraisal
period, and to evaluate the employee ``during the appraisal period.''
To allow agencies to carry over a previous year's rating of record
without an actual evaluation of the employee's performance would defeat
the intent of the law and render the performance appraisal program of
the agency meaningless. This provision would not prohibit an agency
from using previous ratings of record as the basis for personnel
actions when a current rating of record is not available, provided the
recency of the previous rating of record is reasonable. Such a feature
was used by the Performance Management and Recognition System for pay
administration purposes, and also is contained in some of the
demonstration projects, where a past rating of record, usually not more
than one year old, is used as the basis for a pay adjustment when a
current rating is not available.
Technical Correction
The Office of Personnel Management is taking this opportunity to
make minor corrections to citations that were overlooked when
regulations revising the awards provisions were finalized in September
1995.
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 proposing to amend parts 430 and 534 of title
5, Code of Federal Regulations, as follows:
[[Page 19413]]
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 to a subsequent appraisal period(s).
(i) When either a regular appraisal period or an extended appraisal
period ends and a performance plan has been established for a
subsequent appraisal period with no rating of record issued for the
earlier appraisal period, an agency shall not produce a rating of
record to cover that period retroactively. Once issued, ratings of
record shall not be changed retroactively 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 that results in a final determination by
appropriate authority that the rating of record must be changed; 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. 98-10266 Filed 4-17-98; 8:45 am]
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