Managing Senior Professional Performance

Issuing agencies

Abstract

The Office of Personnel Management (OPM) and the Office of Management and Budget (OMB) are issuing a final rule to strengthen the performance appraisal of senior-level (SL) and scientific or professional (ST) employees, collectively referred to as "senior professionals." This final rule establishes a new subpart dedicated exclusively to senior professional performance appraisal that aligns more closely with Senior Executive Service (SES) performance appraisal regulations. The rule also eliminates senior professional appraisal programs, removes the prohibition of a standardized distribution of performance rating levels, and enhances oversight of the appraisal process.

Full Text

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<title>Federal Register, Volume 91 Issue 200 (Monday, October 19, 2026)</title>
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[Federal Register Volume 91, Number 200 (Monday, October 19, 2026)]
[Rules and Regulations]
[Pages 65904-65924]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21316]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 351, 430, 451, 534, 537, 630, and 894

[Docket ID: OPM-2025-0011]
RIN 3206-AO88

OFFICE OF MANAGEMENT AND BUDGET

5 CFR Part 1330

RIN 0348-AB92


Managing Senior Professional Performance

AGENCY: Office of Personnel Management and the Office of Management and 
Budget.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) and the Office of 
Management and Budget (OMB) are issuing a final rule to strengthen the 
performance appraisal of senior-level (SL) and scientific or 
professional (ST) employees, collectively referred to as ``senior 
professionals.'' This final rule establishes a new subpart dedicated 
exclusively to senior professional performance appraisal that aligns 
more closely with Senior Executive Service (SES) performance appraisal 
regulations. The rule also eliminates senior professional appraisal 
programs, removes the prohibition of a standardized distribution of 
performance rating levels, and enhances oversight of the appraisal 
process.

DATES: Effective November 18, 2026.

FOR FURTHER INFORMATION CONTACT: Aaron Gottesman, Senior Advisor to the 
Director, 202-606-8046 or by email at <a href="/cdn-cgi/l/email-protection#b2e1f7e1c2dddedbd1cbf2ddc2df9cd5ddc4"><span class="__cf_email__" data-cfemail="beedfbedced1d2d7ddc7fed1ced390d9d1c8">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Background

    The Office of Personnel Management (OPM) is issuing this final rule 
to revise the performance appraisal framework applicable to senior-
level (SL) and scientific or professional (ST) employees, collectively 
referred to as ``senior professionals.'' These positions are 
established under 5 U.S.C. 5376 and are classified above GS-15 and just 
below the Senior Executive Service (SES). Senior professionals serve in 
positions that require a high level of expertise and are expected to 
exercise significant responsibility and independent judgment in support 
of agency missions. As such, they play a critical role in advancing 
agency priorities and delivering mission outcomes comparable in impact 
to those of SES members.
    Although Congress has aligned the pay structure for senior 
professionals with that of the SES, including through the Federal 
Employees Pay Comparability Act of 1990 \1\ and the Senior Professional 
Performance Act of 2008, Public Law 110-372 (October 8, 2008), the 
performance management requirements applicable to senior professionals 
have remained governed by the general appraisal provisions in 5 CFR 
part 430, subpart B. These regulations have not been updated since the 
mid-1990s and were designed to meet the needs of a broad population of 
federal employees such as prevailing rate employees, seasonal 
employees, and employees across all grades and steps of the General 
Schedule. Over time, these regulations have become increasingly 
incompatible with OPM's efforts to develop a dedicated modern senior 
professional performance appraisal system. Hence, OPM has determined 
that this misalignment between pay, responsibilities, and performance 
appraisal requirements warrants regulatory revision.
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    \1\ Enacted as Section 529 of the Treasury, Postal Service and 
General Government Appropriations Act, 1991 (Pub. L. 101-509, 104 
Stat. 1427).
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    In the proposed rule published on February 24, 2026 (91 FR 8763), 
OPM explained that the current performance appraisal framework does not 
sufficiently support meaningful differentiation in performance among 
senior professionals. As noted in the proposed rule, despite prior 
efforts by OPM to curb ratings inflation through guidance,\2\ 
Governmentwide data showed that, in fiscal years 2023 and 2024, 
approximately 90 percent of senior professionals received ratings at 
Levels 4 and 5, while less than a half of one percent of senior 
professionals received ratings below Level 3 (``Fully Successful'').\3\ 
Additionally, the 2024 Federal Employee Viewpoint Survey (FEVS) results 
showed that only 47% of federal employees agreed with the statement, 
``In my work unit, differences in performance are recognized in a 
meaningful way.'' \4\ This was the lowest

[[Page 65905]]

positive response rate for any question and has consistently been the 
lowest over the past three years.\5\ OPM noted that these data raise 
concerns regarding rating inflation and the effectiveness of existing 
appraisal systems in holding senior professionals accountable for 
performance. In this final rule, OPM eliminates the prior prohibition 
on forced, or standardized, distribution for senior professionals and 
provides that OPM may establish a standardized distribution of some or 
all rating levels for agencies to apply with respect to their senior 
professional cohorts, except that senior professionals appointed under 
Schedules C and G may be excluded from such requirements.\6\
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    \2\ See, e.g., Off. of Pers. Mgmt., Applying Rigor in the 
Performance Management Process and Leveraging Awards Programs for a 
High-Performing Workforce, (July 12, 2019), available at 
<a href="http://www.opm.gov/chcoc/transmittals/2019/applying-rigor-performance-management-process-and-leveraging-awards-programs-high-performing_508_0.pdf">www.opm.gov/chcoc/transmittals/2019/applying-rigor-performance-management-process-and-leveraging-awards-programs-high-performing_508_0.pdf</a>.
    \3\ SL and ST Governmentwide ratings data for fiscal years 2023 
and 2024 were obtained from OPM's Enterprise Human Resources 
Integration-Statistical Data Mart and are on file with OPM.
    \4\ See Federal Employee Viewpoint Survey, U.S. Off. of Pers. 
Mgmt.,<a href="http://www.opm.gov/fevs/reports/governmentwide-reports">www.opm.gov/fevs/reports/governmentwide-reports</a> (last visited 
July 31, 2026) (providing FEVS Results for years up to 2024).
    \5\ Id.
    \6\ As used in this rule, the term ``standardized distribution'' 
refers to a prescribed allocation of performance rating levels 
across a rated population--e.g., limits or targets on the percentage 
of senior professionals who may receive a given rating level. The 
term is not used in its statistical sense and does not refer to a 
standard normal (Gaussian) distribution or any other formal 
probability distribution. Nothing in this rule requires that ratings 
conform to a bell curve or other statistical model.
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    Consistent with OPM's authority under 5 U.S.C. chapter 43 and the 
Civil Service Reform Act of 1978, this final rule is intended to 
strengthen performance management for senior professionals by better 
aligning appraisal practices with the scope and impact of their duties. 
The new subpart generally mirrors the provisions and structure of the 
SES appraisal regulations at 5 CFR part 430, subpart C, but certain 
elements of the non-SES appraisal regulations at 5 CFR part 430, 
subpart B, are retained in the new subpart due to the different 
statutory authorities and requirements that apply to the SES and senior 
professionals. The reforms in this final rule are designed to promote 
greater rigor, transparency, oversight, and accountability in the 
evaluation of senior professional performance.

Digest of Public Comments

    In response to the proposed rule, OPM received 12 comments during 
the 30-day public comment period from various individuals, 
organizations, and a professional association representing employment 
law attorneys. Of the 12 comments received, nine were posted to 
<a href="http://Regulations.gov">Regulations.gov</a>, including one comment that was substantively identical 
to another submission. Three of the comments received were outside the 
scope of this rulemaking and therefore not posted. At the conclusion of 
the public comment period, OPM reviewed and analyzed the comments.
    The comments are summarized and discussed in the subsequent 
sections, beginning with general comments followed by comments specific 
to each section. A discussion of the suggested revisions that were 
considered and either adopted, adopted in part, or declined, and the 
rationale therefor is included.

General Comments

    The comments received reflect a range of views, with some 
expressing support, others acknowledging the need for performance 
management reforms but disagreeing with OPM's approach, and others 
strongly objecting to the rule. For example, Commenter 0007 stated ``I 
support the proposed rule to implement standardized distributions for 
senior professional performance appraisals. The reasoning is that for 
too long, `leniency bias' has led to rating inflation.'' Another 
individual characterized the rule as ``a step in the wrong direction to 
ensure high level performers necessary for these positions are willing 
to become civil servants.'' (Commenter 0011). Most commenters focused 
their objections on only a few specific provisions of the rule and 
framed their concerns in terms of the potential impact on the Federal 
workforce, implementation challenges, and perceived legal issues, which 
OPM addresses below in the relevant sections of the preamble.
    Commenter 0011 argued that OPM failed to provide sufficient time to 
address the proposed rule and that an additional 60 to 180 days should 
be provided, citing the complexity of the rule and the fact that OPM 
has recently issued several other proposed rules. Respectfully, OPM 
provided sufficient time for the public to review the proposed rule and 
submit comments. Courts have held that a 30-day comment period is 
generally sufficient to comply with the Administrative Procedure Act 
(APA).\7\
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    \7\ See Chamber of Com. of the U.S. v. U.S. Sec. & Exch. Comm'n, 
85 F.4th 760, 779 (5th Cir. 2023) (``[T]he APA generally requires 
only a minimum thirty-day comment period.''); see also Riverbend 
Farms, Inc. v. Madigan, 958 F.2d 1479, 1484 (9th Cir. 1992) 
(``Although the APA mandates no minimum comment period, some window 
of time, usually thirty days or more, is . . . allowed for 
interested parties to comment.''); Nat'l Lifeline Ass'n v. FCC, 921 
F.3d 1102, 1117 (D.C. Cir. 2019) (``When substantial rule changes 
are proposed, a 30-day comment period is generally the shortest time 
period sufficient for interested persons to meaningfully review a 
proposed rule and provide informed comment.'').
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    Commenters 0010 and 0011 also urged OPM to withdraw the rule based 
on the broader context in which it was proposed, arguing that other 
recent personnel actions have destabilized the Federal workforce and 
that performance data generated in that environment cannot justify 
reform. Those objections are directed at actions and policies outside 
the scope of this rulemaking, and OPM does not address them here. OPM 
notes, however, that the ratings data on which this rule relies are 
from fiscal years 2023 and 2024, and the FEVS results it cites span 
2022 through 2024, largely predating the events the commenters 
describe. OPM has evaluated this rule on its own record and pursuant to 
its own statutory authorities, as discussed throughout this preamble.

Part 430--Performance Management

    This final rule revises 5 CFR part 430 by establishing a new 
subpart E dedicated to managing senior professional performance. In the 
following sections, we address the public comments related to the 
specific sections of the regulation to which each comment applied.

Section 430.501 General

    This section identifies the statutory and regulatory basis for the 
senior professional performance appraisal subpart. This section also 
describes the conditions under which agencies and employees not covered 
by the provisions of this subpart can receive performance evaluations 
and ratings that are considered ratings of record for reduction in 
force purposes.
    Commenter 0011 asserted that OPM lacks statutory authority for this 
rulemaking. As described in more detail in the Background and the 
proposed rule,\8\ OPM not only has authority to regulate performance 
management but is required to do so. Chapter 43 of title 5, U.S. Code, 
remains the applicable authority for performance appraisal systems and 
establishes OPM's responsibility to prescribe regulations governing 
performance management for senior professionals. The commenter's 
constitutional objections are likewise unavailing. This rule implements 
an express delegation of rulemaking authority from Congress at 5 U.S.C. 
4305, 1103, and 1104; it does not purport to enact, amend, or repeal 
any statute. Nor does Loper Bright Enterprises v. Raimondo, 603 U.S. 
369 (2024), assist the commenter: that decision concerns judicial 
deference to agency interpretations of ambiguous statutes and does not 
diminish an agency's exercise of authority Congress has expressly 
conferred. Nothing in this

[[Page 65906]]

rule purports to limit judicial review otherwise available by law.
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    \8\ 91 FR at 8763-64.
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    Although 5 U.S.C. 4305 provides OPM the authority to prescribe 
regulations governing performance appraisal under subchapter I of 
chapter 43 of title 5, U.S. Code, Commenters 0005 and 0008 recommended 
that OPM instead use the demonstration project authority under 5 U.S.C. 
4703 to test the proposed reforms in this final rule before 
implementing them Governmentwide. These commenters argue that the 
proposed changes, including the use of a standardized distribution of 
performance ratings and other structural modifications, are untested in 
the Federal context and may carry significant risks for workforce 
morale, retention, and organizational effectiveness. Commenters 
suggested that pilot programs, randomized trials, or phased 
implementation approaches would provide an evidence-based foundation 
for broader adoption and allow OPM to assess potential unintended 
consequences.
    OPM appreciates the commenters' recommendations regarding the use 
of demonstration project authority and agrees that demonstration 
projects can be a valuable tool for testing innovative personnel 
management approaches in appropriate circumstances. However, OPM has 
determined that the use of a demonstration project under 5 U.S.C. 4703 
is not necessary and would create unacceptable delays to the urgently 
needed reforms adopted in this final rule.
    Demonstration projects, by definition, ``must require the waiver of 
a provision of law, rule, or regulation which is eligible for waiver 
under the demonstration authority contained in 5 U.S.C. 4703.'' \9\ OPM 
requires no waiver of any provision of law or rule to exercise its 
statutory authority under 5 U.S.C. 4305 to prescribe non-SES 
performance appraisal regulations. Many of the provisions in this final 
rule are grounded in longstanding principles of effective performance 
management, including the need for meaningful differentiation in 
performance ratings, clear accountability, and alignment between 
performance outcomes and organizational goals.
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    \9\ 5 CFR 470.103 (defining ``Demonstration Project'').
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    Additionally, senior professionals have already been operating 
under a new senior professional performance appraisal system and plan 
\10\ since October 1, 2025, which in many ways is similar to the new 
SES performance appraisal system and plan.\11\ OPM also notes that the 
rule, Assuring Responsive and Accountable Federal Executive Management, 
published on September 15, 2025 (90 FR 44291), authorized OPM to 
establish a standardized distribution of rating levels for the SES and 
this final rule seeks to establish parity with that SES rule. The 
effects of standardized distribution systems have been extensively 
studied across multiple organizational contexts,\12\ and OPM relied on 
this robust existing body of evidence in both the SES rulemaking and 
this current rulemaking. Conducting further study through a 
demonstration project is, therefore, unlikely to produce novel results 
that have not been documented elsewhere in the literature. Moreover, 
OPM will diligently monitor the implementation of all the reforms in 
this rule and through ongoing oversight, data analysis, and engagement 
with agencies, continue to refine its senior professional performance 
appraisal guidance to ensure the final rule achieves its intended 
objectives.
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    \10\ Off. of Pers. Mgmt., New Senior Professional Performance 
Appraisal System and Plan (Apr. 3, 2025), available at <a href="http://www.opm.gov/chcoc/latest-memos/new-senior-professional-performance-appraisal-system-and-plan.pdf">www.opm.gov/chcoc/latest-memos/new-senior-professional-performance-appraisal-system-and-plan.pdf</a>.
    \11\ Off. of Pers. Mgmt., New Senior Executive Service 
Performance Appraisal System and Performance Plan, and Guidance on 
Next Steps for Agencies to Implement Restoring Accountability for 
Career Senior Executives (Feb. 25, 2025), available at <a href="http://www.opm.gov/policy-data-oversight/latest-memos/new-senior-executive-service-performance-appraisal-system-and-performance-plan-and-guidance-on-next-steps-for-agencies-to-implement-restoring-accountability-for-career-senior-executives.pdf">www.opm.gov/policy-data-oversight/latest-memos/new-senior-executive-service-performance-appraisal-system-and-performance-plan-and-guidance-on-next-steps-for-agencies-to-implement-restoring-accountability-for-career-senior-executives.pdf</a>.
    \12\ See, e.g., Aniek Wijayanti et al., What do we know about 
the forced distribution system: A systematic literature review and 
opportunities for future research, 75 Mgmt. Rev. Q. 747 (Feb. 2025), 
available at <a href="http://doi.org/10.1007/s11301-023-00396-8">doi.org/10.1007/s11301-023-00396-8</a>.
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    For these reasons, OPM has determined that proceeding with 
Governmentwide implementation of the final rule, rather than using 
demonstration project authority, is appropriate and consistent with the 
objectives of improving the rigor and effectiveness of senior 
professional performance appraisal and increased parity with the SES 
performance appraisal framework. Accordingly, OPM is adopting the 
language in this section as proposed.

Section 430.502 Coverage

    This section addresses coverage under the new subpart. It applies 
only to senior professionals paid under 5 U.S.C. 5376, which includes 
all SL positions that are classified above GS-15 pursuant to 5 U.S.C. 
5108 and all ST positions established under 5 U.S.C. 3104. It also 
authorizes OPM to exclude certain excepted service positions where 
applicable.
    OPM received no comments on this section and is adopting the 
language as proposed.

Section 430.503 Definitions

    This section provides definitions necessary for administration. Key 
defined terms include ``agency,'' ``appraisal period,'' ``critical 
element,'' ``initial summary rating,'' ``oversight official,'' 
``performance standard,'' ``PRB (Performance Review Board),'' 
``progress review,'' and ``rating official.'' Certain defined terms in 
the new subpart are retained from both the SES appraisal framework and 
non-SES appraisal regulations, tailored for senior professionals to 
reflect their unique performance management context. Notably, the 
definition of ``agency'' reflects that, under 5 U.S.C. 5108, OPM 
determines the maximum number of SL positions that may be established 
in an Executive agency and, under 5 U.S.C. 3104, OPM determines the 
maximum number of ST positions in any agency, except for the Library of 
Congress, which also may establish eight ST positions under 5 U.S.C. 
3104.
    OPM received no comments on this section and is adopting the 
language as proposed.

Section 430.504 Senior Professional Performance Appraisal Systems

    This section requires agencies to establish performance appraisal 
systems specifically for senior professionals. OPM proposed to revise 
these systems to require that they be developed and administered in 
accordance with the system standards in Sec.  430.505, which more 
closely align with those applicable to SES appraisal systems. To 
further align senior professional appraisal with SES appraisal, OPM 
also proposed to eliminate the requirement that agencies develop 
separate performance appraisal programs and instead require that senior 
professional appraisal systems encompass all policies, parameters, 
procedures, and requirements necessary for OPM approval and be 
consistent with the criteria for performance appraisal system 
certification.
    Commenter 0006 challenges OPM's underlying authority to change the 
evaluation system for senior professionals, asserting that OPM's final 
rulemaking errs in interpreting the Senior Professional Performance Act 
of 2008 ``as constituting Congressional authority to change the 
performance evaluation system for SL/ST employees.'' The commenter 
contends that because Congress did not make substantive changes to 
senior professional performance appraisal at the time of the 2008 Act, 
that OPM is

[[Page 65907]]

precluded from making the regulatory reforms included in this final 
rule.
    OPM respectfully disagrees because the commenter misunderstands 
OPM's authority. While OPM referenced the Senior Professional 
Performance Act of 2008 in the proposed rule as an example of 
legislation that has increased pay parity with the SES, the fact that 
the legislation did not also make statutory changes to how senior 
professionals' performance is appraised cannot be interpreted as 
Congress barring OPM from exercising its statutorily-conferred 
authority at 5 U.S.C. 4305 to prescribe non-SES performance management 
regulations. Coverage of senior professionals under subchapter I of 
chapter 43 of title 5, U.S. Code has not changed. Therefore, OPM is 
authorized to prescribe regulations affecting the performance 
management of senior professionals, consistent with statute.
    Commenter 0010 argues that OPM has not sufficiently explained why 
the SES appraisal system is the right comparator to guide the 
development of the senior professional appraisal system rules, as 
opposed to constructing a more tailored model that reflects the actual 
duties of senior professionals. Along a similar line, Commenter 0005 
asserts that because senior professionals perform such highly 
specialized and diverse work across a wide range of competencies, it 
makes more sense for their performance appraisal systems to align with 
non-SES appraisal systems as opposed to SES systems--which are focused 
on executive management competencies.
    OPM recognizes and appreciates the broad range of competencies 
possessed by senior professionals. Using the SES appraisal framework as 
a model for developing the senior professional appraisal rules in no 
way equates to senior professionals being evaluated on the same 
competencies as SES members. The final rule maintains important 
distinctions that reflect the non-supervisory and highly specialized 
nature of senior professional roles. Agencies retain the flexibility to 
tailor senior professional performance plans through inclusion of 
position-specific performance objectives. Additionally, since senior 
professionals do not supervise employees other than personal 
assistants, they do not have ``employee perspectives'' included as a 
performance factor for their appraisals, nor do their performance plans 
include a critical element focused on holding others accountable. 
Although senior professionals do not carry supervisory or executive 
management responsibilities like SES, they are comparable in terms of 
their organizational impact, influence on agency mission, and level of 
accountability. Senior professionals frequently serve as the Federal 
Government's leading experts in critical fields, provide authoritative 
technical or scientific advice, and contribute directly to high-level 
policy, programmatic, or mission outcomes. Thus, given the importance 
of these positions, OPM continues to believe that a more rigorous and 
structured appraisal framework--similar to that used for the SES--is 
appropriate to ensure meaningful differentiation, accountability, and 
consistency for these positions. Accordingly, OPM is adopting the 
language in this section as proposed.

Section 430.505 System Standards for Senior Professional Performance 
Appraisal Systems

    This section sets forth the system standards that agencies' senior 
professional performance appraisal systems must incorporate. Standards 
include the use of critical elements, alignment of performance 
requirements with agency mission and strategic planning activities, 
defined performance standards for each summary rating level, annual 
performance appraisals, a mathematical method for deriving ratings, 
establishment of five summary performance levels, and that performance 
appraisals be used as a basis to adjust pay, reward, retain, develop, 
and remove senior professionals. OPM also proposed to eliminate the 
prohibition on a forced, or standardized distribution of rating levels 
and authorize OPM to establish and refine, as needed, a standardized 
distribution of some or all rating levels for senior professionals.

Justification of Policy Change

    Commenter 0010 asserted that OPM has not provided sufficient 
justification for departing from its longstanding policy prohibiting 
pre-established distributions of performance ratings, as reflected in 
OPM's 1979 regulation.\13\ The commenter argued that the prior rule 
barred forced, or standardized distributions because they could 
interfere with appraisal of actual performance against standards, and 
that OPM has not adequately explained its change in position.
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    \13\ 44 FR 45587, 45590 (Aug. 3, 1979).
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    OPM respectfully disagrees that it has not articulated a sufficient 
reason for departing from its prior policy. The APA requires, as 
relevant here, that OPM provide a reasoned explanation and show 
awareness that there is, in fact, a change in policy.\14\ The Court 
also held that an agency's reasoning need not prove to be a better 
solution than the status quo but rather that there are good reasons the 
agency believes support the change in policy.\15\
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    \14\ F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 515-
16 (2009).
    \15\ Id.
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    In the proposed rule, OPM expressly acknowledged its prior 
prohibition on pre-established rating distributions and explained that, 
based on current data, experience, and research, a different approach 
is warranted to address the persistent lack of meaningful 
differentiation that exists within senior professional performance 
ratings. OPM further notes that the 1979 regulatory prohibition was 
directed at rigid, pre-established ``bell curve'' distributions for 
fear that requiring a specific distribution of all rating levels would 
impede appraisal of actual performance against standards. As is common 
in rulemakings from that time, there is virtually no accompanying 
preamble explaining the rationale for the provision.
    This final rule does not espouse adoption of the rigid ``forced 
distribution'' approach that animated the prohibition in the 1979 
regulation. OPM has explained that it has no intention of imposing any 
limits on ratings at the Level 3 (``Fully Successful'') level or below 
and instead, will limit only the highest rating levels. As discussed in 
the Background, Governmentwide data show that performance ratings for 
senior professionals are heavily concentrated at the highest levels, 
with the vast majority of employees receiving top ratings and very few 
receiving lower ratings.\16\ As further explained throughout the 
proposed rule, this lack of meaningful differentiation limits the 
effectiveness of performance appraisal systems as tools for 
accountability, recognition, and workforce management. OPM emphasizes 
that such rating inflation raises concerns regarding whether existing 
systems are fully achieving the objectives reflected in 5 U.S.C. 4302 
permitting the accurate evaluation of job performance, as systems that 
do not distinguish among levels of performance fail to meaningfully 
assess differences in contribution and impact. OPM believes the lack of 
differentiation in ratings under the current system is so severe that, 
because previous efforts to normalize ratings through guidance \17\ 
have failed, adoption of a standardized

[[Page 65908]]

distribution is a necessary remedy. As such, OPM concludes that it has 
provided a reasoned explanation for its change in policy, grounded in 
current data, research, and statutory considerations, and that the 
final rule represents a permissible exercise of its authority under 5 
U.S.C. chapter 43.
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    \16\ See supra text accompanying note 3.
    \17\ See supra note 2.
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    Commenter 0010 also asserted that OPM failed to consider narrower 
alternatives, such as clearer performance standards, stronger 
supervisory training, or more tailored agency-specific rating systems. 
OPM considered less sweeping approaches, including continued reliance 
on guidance, and explains in the Regulatory Alternatives section of 
this preamble why they are inadequate. Guidance-based efforts to 
instill rigor have been in place since at least 2019 and have not 
curbed ratings compression, and clearer standards and training do not 
address the structural incentives toward leniency documented by GAO. 
Nor does the final rule displace agency tailoring: agencies continue to 
design their own performance plans, standards, and position-specific 
requirements under the new subpart.

Consistency With 5 U.S.C. 4302

    Commenters 0003 and 0010 argue that the proposed rule is 
inconsistent with 5 U.S.C. 4302(c)(1), which requires that performance 
appraisal systems permit the accurate evaluation of job performance on 
the basis of objective criteria related to the job in question. These 
commenters argued that a distribution framework substitutes relative 
comparisons for job-based standards and may result in ratings that do 
not reflect actual performance where multiple employees perform at a 
similarly high level. Commenter 0010 further articulated the argument 
stating, ``If several employees satisfy the criteria for a high rating, 
but the system permits only a fixed percentage or number of such 
ratings, some employees necessarily will receive lower ratings for 
reasons unrelated to whether they met the requirements of their jobs.''
    OPM does not agree that the final rule is inconsistent with 5 
U.S.C. 4302. The statute requires that appraisal systems ``to the 
maximum extent feasible, permit the accurate evaluation of job 
performance on the basis of objective criteria . . . related to the job 
in question for each employee or position under the system'' \18\; it 
does not prescribe or prohibit a specific rating methodology or 
preclude the use of a standardized distribution to differentiate among 
levels of performance. Under this final rule, agencies remain 
responsible for establishing performance plans with clear, job-related 
expectations and for evaluating employees against those expectations. 
The standardized distribution framework provides a structured mechanism 
to support consistent application of performance distinctions; it does 
not authorize ratings based on non-performance factors or require 
agencies to disregard evidence of individual performance.
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    \18\ 5 U.S.C. 4302(c)(1) (emphasis added).
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    OPM intends, in exercising its authority to establish a 
standardized distribution, to instruct that any established rating 
limits be applied at the appropriate aggregate level as opposed to 
supervisors applying the rating limits within their own group or team. 
Thus, the requirement to differentiate between relative levels of 
performance through the use of a standardized distribution operates 
only after employees are assessed against established performance 
standards and does not replace or supplant those standards. The concern 
put forth by commenters claiming that distributional requirements 
create tension with statute where multiple employees perform at 
similarly high levels is misplaced. The final rule does not require the 
mechanical application of quotas without regard to objective, job-
related performance evidence. Rather, it requires agencies to exercise 
informed judgment within a structured framework designed to support 
meaningful differentiation.
    The final rule also provides sufficient flexibility to accommodate 
circumstances in which performance is uniformly high, as determined 
through centralized review and the application of professional 
judgment, including recommendations from the Performance Review Board 
(PRB). Where an agency determines that adherence to the limits imposed 
by the standardized distribution is not appropriate because the 
performance of its senior professional population was genuinely 
outstanding, OPM's new senior professional performance appraisal system 
\19\ provides that the President may waive the standardized 
distribution requirement by certifying that the performance of the 
agency's senior professionals was outstanding during the relevant time 
period.
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    \19\ See supra note 10.
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Merit System Principles

    Several commenters, including Commenters 0003 and 0010 object to 
the rule on the basis that it undermines merit system principles at 5 
U.S.C. 2301(b). Commenter 0003 specifically claims that a standardized 
distribution undermines principles calling for ``efficient use of the 
Federal workforce'' (5 U.S.C. 2301(b)(5)) and that ``Employees should 
be retained on the basis of the adequacy of their performance.'' (5 
U.S.C. 2301(b)(6)). The commenter suggests that because a forced 
distribution centralizes control over ratings, it creates leverage for 
an agency to use ratings punitively against experts whose results or 
conclusions displease political appointees. The commenter argues that 
this creates an invitation for prohibited personnel practices such as 
discrimination based on political affiliation (5 U.S.C. 2302(b)(1)(E)) 
and coercion of political activity (5 U.S.C. 2302(b)(3)). Similarly, a 
commenter argued that ``OPM's proposed rule creates an unconstitutional 
loophole and attempts to remove power from established laws, tying 
employee ``performance'' to political perspectives.'' (Commenter 0011).
    OPM does not agree that the final rule undermines the merit system 
principles or creates an increased risk of prohibited personnel 
practices. The merit system principles require that employees be 
managed in a manner that promotes efficiency, effectiveness, and fair 
treatment based on performance. The final rule specifically includes 
``compliance with merit system principles'' as a factor taken into 
account when appraising senior professionals. 5 CFR 430.508(d)(5). The 
final rule further advances merit system principles by strengthening 
the rigor and credibility of performance appraisals and ensuring that 
ratings meaningfully differentiate between levels of contribution and 
impact.
    Any argument that this final rule negatively affects an employee's 
ability to be retained on the basis of the adequacy of their 
performance is unfounded. As previously mentioned, OPM intends that the 
standardized distribution will apply only to the assignment of the 
highest performance rating levels (Levels 4 and 5) and will not impose 
limitations on any of the levels at or below Level 3 (``Fully 
Successful''), such as a ``quota'' requiring the issuance of a certain 
amount of Level 1 (``Unacceptable'') ratings. Because Level 3 
represents fully adequate performance and remains unrestricted, the 
application of a standardized distribution will not require a senior 
professional to receive lower than a Level 3 rating, invalidating 
concerns over associated performance-based demotion or removal. As 
such, OPM concludes that a standardized

[[Page 65909]]

distribution does not interfere with an employee's ability to be 
retained on the basis of the adequacy of their performance and, 
therefore, does not conflict with 5 U.S.C. 2301(b)(6).
    OPM also disagrees with the commenter's assertion that the rule 
invites prohibited personnel practices and will have a chilling effect 
on the independent professional judgment of experts. Under the final 
rule, performance ratings remain based on individual merit and 
individual performance--not on irrelevant factors like race, political 
affiliation, or religion. Supervisors who assign ratings based on 
personal favoritism or engage in political coercion would continue to 
violate merit system principles regardless of the rating structure in 
place. OPM emphasizes that all existing statutory protections remain 
fully applicable. Allegations of retaliation, discrimination, or 
coercion remain subject to review by appropriate oversight bodies, 
including the Office of Special Counsel (OSC), the Merit Systems 
Protection Board (MSPB), and equal employment opportunity (EEO) 
processes. Hence, distinguishing employees based on relative 
performance does not conflict with the merit system principles or 
undermine fair and equitable treatment.
    Relatedly, Commenter 0010 argued that requiring supervisors to 
distinguish among similarly performing employees will shift appraisals 
toward subjective judgments about style, visibility, or personality, 
increasing the risk of favoritism and implicit bias, and cited Equal 
Employment Opportunity Commission (EEOC) best-practices guidance 
recommending neutral and objective criteria. OPM disagrees that the 
final rule invites such subjectivity. Ratings remain anchored to 
written, job-related critical elements and performance standards 
established in advance, and OPM intends for any rating limits to be 
applied at an aggregate level rather than within a supervisor's own 
team. Moreover, the multilayered review structure adopted in this 
rule--higher-level review, centralized PRB review, and the involvement 
of approving and oversight officials--provides more checks against 
idiosyncratic or biased judgments than the current framework, under 
which a rating may rest largely on a single supervisor's unreviewed 
assessment. These features are consistent with the EEOC guidance the 
commenter cites, and all EEO protections and remedies remain fully 
available to senior professionals.
    OPM has also taken additional steps in the final rule to ensure 
that senior professional appraisals under standardized distribution are 
free from undue political influence. Consistent with the standardized 
distribution approach adopted for the SES, which excluded noncareer 
appointees from the standardized distribution requirements, OPM is 
excluding Schedule C and Schedule G excepted service appointees from 
these requirements. This exclusion eliminates even the perception that 
rating distributions could be used in a manner that favors issuing high 
ratings to political appointees over career employees.
    For these reasons, OPM concludes that the final rule is consistent 
with the merit system principles and continues to support accurate, 
objective, and job-related evaluation of employee performance.

Differentiation Among High Performers

    Commenters 0003, 0005, and 0010 asserted that the use of a 
standardized distribution is inappropriate for senior professional 
employees because these positions are, by design, filled by highly 
qualified experts who are expected to perform at consistently high 
levels. These commenters argued that the concentration of ratings at 
the highest levels may not be indicative of rating inflation but rather 
a reflection of the inherently high caliber performance demonstrated by 
the senior professional workforce.
    OPM recognizes that senior professional employees are selected 
based on their advanced expertise, qualifications, and ability to 
perform work of significant difficulty and responsibility. OPM agrees 
that senior professionals are expected to perform at a high level and 
that agencies rely on these employees to provide critical technical, 
scientific, and professional contributions. However, OPM does not agree 
that the presence of a highly qualified workforce obviates the need for 
meaningful differentiation in performance ratings.
    As discussed in the proposed rule, available data indicate that 
performance ratings for senior professionals are heavily concentrated 
at the highest levels across agencies. While this may, in part, reflect 
the high caliber of the workforce, it also reflects the failure of 
agencies to distinguish among varying levels of performance, 
contribution, and impact. Even within a highly skilled population, 
differences in performance outcomes, innovation, leadership within 
technical domains, and contributions to mission results can and do 
exist. A performance appraisal system must be capable of recognizing 
these distinctions to support accountability and the effective use of 
performance-based personnel decisions. As mentioned above, OPM's new 
senior professional performance appraisal system provides an exception 
to the standardized distribution requirements by Presidential waiver, 
so as to avoid a situation where truly high performing senior 
professionals are precluded from receiving appropriately high ratings.

Consideration of Empirical Evidence

    Several commenters, including 0003, 0008, and 0010, asserted that 
the research literature generally does not support the use of 
standardized distribution in performance management systems and may, in 
some cases, demonstrate negative effects. Others suggested that such 
approaches lead to inaccurate ratings, can reduce collaboration, 
discourage knowledge sharing, and increase perceptions of unfairness. 
Commenter 0008 argued that OPM needs to consider the limits of the 
evidence it is relying on and the mixed experience employers have had 
with strategies like forced ranking.
    In the proposed rule, OPM noted that the literature on standardized 
distribution reflects a broad range of findings with respect to its 
efficacy and potential impacts on collaboration, morale, and 
perceptions of fairness. However, OPM does not agree that the existence 
of contrary or mixed research findings precludes adopting the changes 
in the final rule. The APA does not require agencies to resolve all 
disagreements in the academic literature or to demonstrate that a 
policy is supported by uniform empirical consensus. OPM has considered 
the evidence cited in the proposed rule and in comments and has 
determined that the amendments made in the final rule are necessary to 
address longstanding concerns regarding the lack of meaningful 
differentiation in performance ratings across the Federal workforce.
    Additionally, other research has demonstrated positive outcomes 
with respect to the accuracy of comparative judgments. Performance 
appraisal inherently involves human judgment and any human judgment is 
by nature comparative.\20\ Thus, the quality of an evaluation is 
improved by ensuring that it is comparative in nature (that is, 
involving relative judgments of a target in comparison to other 
individuals and groups), instead of absolute (that is, involving 
judgments on scales that do

[[Page 65910]]

not reference others).\21\ One study, for example, concluded that 
``[t]he relatively few studies that have investigated the validity of 
comparative performance appraisal methods have tended to support their 
validity.'' \22\ It found significant evidence from ``at least three 
important and quite different domains that comparative evaluative 
judgments of the self or others may be more advantageous than absolute 
evaluative judgments.'' \23\ These findings suggest that a performance 
appraisal framework that permits comparative judgments among employees, 
by utilizing a standardized distribution of ratings, will more 
accurately and objectively measure individual performance than one that 
prohibits any comparative judgments between employees and requires that 
any measurement of employee performance be framed in absolute terms. 
Moreover, OPM's reforms in this final rule not only address 
longstanding challenges in Federal performance management with respect 
to ratings inflation but also provide an approach designed to increase 
appraisal accuracy.
---------------------------------------------------------------------------

    \20\ Kedia G, Mussweiler T, Linden DE. Brain mechanisms of 
social comparison and their influence on the reward system. 
Neuroreport. 2014 Nov 12:25.
    \21\ Goffin RD, Olson JM. Is It All Relative? Comparative 
Judgments and the Possible Improvement of Self-Ratings and Ratings 
of Others. Perspect. Psychol. Sci. 2011 Jan; 6(1):48-60.
    \22\ Id. at 50.
    \23\ Id. at 53.
---------------------------------------------------------------------------

Use in Private Industry

    Other commenters, including Commenters 0008 and 0010, asserted that 
standardized distribution approaches have been broadly abandoned in the 
private sector and argued that this trend demonstrates that such 
systems are ineffective or inappropriate for use in the Federal 
Government. They cite examples of large individual companies that have 
moved away from forced ranking systems and suggested that these 
developments undermine the rationale for adopting a standardized 
distribution framework.
    OPM acknowledges that some private sector organizations have moved 
away from rigid forced ranking systems. However, the context of the 
Federal Government differs greatly from the private sector in terms of 
the relative value that utilizing a standardized distribution framework 
can provide. For instance, private sector companies have an inherent 
profit motive to drive distinctions among levels of performance. In 
contrast, the Federal Government has no such profit motive and instead 
provides broad procedural and legal protections for employees that 
discourage supervisors from holding them accountable.
    The reluctance of Federal supervisors to identify poor performers 
has been an issue for decades. In 1990, GAO issued a Governmentwide 
report on the management of poor performers and found that more than 
60% of the personnel officials, managers, and supervisors interviewed 
believed that not all supervisors were identifying poor performers. 
According to those officials, supervisors were often reluctant to 
identify poor performers because the process was too time-consuming, 
they wanted to avoid confrontation, or they believed they lacked 
management support. GAO further reported that many supervisors found it 
especially difficult to address employees performing at the minimally 
successful level and that the Government had often tolerated less-than-
fully-successful performance for extended periods because supervisors 
had limited options for addressing such employees.\24\
---------------------------------------------------------------------------

    \24\ U.S. Gov't Accountability Off., Performance Management: How 
Well Is the Government Dealing With Poor Performers, GGD-91-7, at 3, 
32 (Oct. 2, 1990).
---------------------------------------------------------------------------

    As a result, over time supervisors have defaulted to issuing 
lenient ratings, thereby avoiding the procedural hurdles and negative 
personal interactions associated with issuing low ratings. This 
tendency of supervisors to avoid issuing low ratings and instead issue 
high ratings inflates the overall ratings distribution and diminishes 
the value and meaning of a high rating. As previously mentioned, the 
2024 FEVS results showed that only 47% of federal employees agreed with 
the statement, ``In my work unit, differences in performance are 
recognized in a meaningful way.'' \25\ This was the lowest positive 
response rate for any question and has consistently been the lowest 
over the past three years.
---------------------------------------------------------------------------

    \25\ See supra note 4.
---------------------------------------------------------------------------

Impact on Individual Employee Motivation

    Commenter 0005 argues that standardized distribution will be 
demotivating to senior professionals because it will lead to lower 
ratings and reduced incentives.
    On the contrary, because performance ratings for senior 
professionals are so heavily concentrated at the highest rating levels 
and agencies have limited awards budgets, the size of performance-based 
awards has decreased, along with the connection between ratings and 
rewards. In this environment, modestly sized awards are broadly 
distributed. However, under the framework established by the final 
rule, with fewer employees receiving the highest ratings, those ratings 
will carry greater meaning and warrant more significant recognition and 
reward. OPM's Governmentwide awards guidance \26\ directly supports 
this approach by calling for agencies to allocate the majority of 
awards spending for the highest performers. By increasing the magnitude 
and visibility of rewards for top performance, the standardized 
distribution approach enables a stronger performance-reward connection 
and helps to establish a culture of excellence.
---------------------------------------------------------------------------

    \26\ OPM, ``Guidance on Awards for Federal Employees'' (August 
11, 2025), available at <a href="https://www.opm.gov/chcoc/transmittals/2025/OPM%20Memo%20-%20Awards%20Guidance%208-11-2025.pdf">https://www.opm.gov/chcoc/transmittals/2025/OPM%20Memo%20-%20Awards%20Guidance%208-11-2025.pdf</a>.
---------------------------------------------------------------------------

Impact on Teamwork

    Several commenters contend that standardized distribution may 
specifically have a negative impact on teamwork. For instance, 
Commenter 0010 cited an MSPB study \27\ as well as a study by Loberg et 
al. (2021) \28\ to argue that standardized distribution may reduce 
collaboration, discourage knowledge sharing, and negatively affect team 
performance. The commenter suggests that such findings demonstrate that 
standardized distribution is not appropriate for the Federal workforce, 
where work is often collaborative in nature.
---------------------------------------------------------------------------

    \27\ U.S. Merit Sys. Protection Bd., Designing an Effective Pay 
for Performance Compensation System, 22-25 (Jan. 2006), available at 
<a href="http://www.mspb.gov/studies/studies/Designing_an_Effective_Pay_for_Performance_Compensation_System_224104.pdf">www.mspb.gov/studies/studies/Designing_an_Effective_Pay_for_Performance_Compensation_System_224104.pdf</a>.
    \28\ See Linda Loberg et al., Forced Distribution Rating Systems 
and Team Collaboration, 188 J. Econ. Behav. & Org. 18 (2021), 
available at <a href="http://www.sciencedirect.com/science/article/pii/S0167268121001827">www.sciencedirect.com/science/article/pii/S0167268121001827</a>.
---------------------------------------------------------------------------

    OPM acknowledges the studies cited and agrees that performance 
management systems must be carefully designed to support both 
individual accountability and effective collaboration. However, OPM 
does not agree that such findings warrant rejecting the use of a 
standardized distribution framework for senior professional performance 
appraisal. The Loberg et al. (2021) study itself found that the 
effectiveness of standardized distribution systems depends on the work 
context and, where the need for teamwork is not essential and there 
exist individual performance measures on which to base performance, 
that standardized distribution increases performance.\29\ OPM 
acknowledges that the study observed these positive effects only where 
individuals worked alone and found reduced collaboration and knowledge 
sharing in team settings; that

[[Page 65911]]

limitation, however, reinforces rather than undermines the approach 
adopted here. OPM also notes that senior professionals frequently 
perform highly specialized, expert-level work that is individually 
driven and assessed based on the quality and impact of their 
contributions. In such contexts, a structured approach to 
differentiating performance will enhance accountability and 
recognition. To the extent collaboration and teamwork are essential to 
mission outcomes, agencies retain the ability to incorporate those 
elements into senior professional performance plans and evaluate 
employees accordingly. Teamwork and collaboration may also be promoted 
through team-based awards.
---------------------------------------------------------------------------

    \29\ Id. at 26, 31.
---------------------------------------------------------------------------

Interaction With Other Rulemakings

    Commenter 0010 claims that OPM has not adequately addressed how 
this rule will interact with other pending rules that give performance 
ratings greater weight. For instance, OPM has separately finalized a 
reduction in force rule that prioritizes ratings over tenure or length 
of service for determining retention standing.\30\ The commenter argues 
that this makes ratings more consequential Governmentwide, given that 
this final rule will force greater distinctions in performance 
appraisal.
---------------------------------------------------------------------------

    \30\ Reduction in Force, 91 FR 49178 (August 3, 2026).
---------------------------------------------------------------------------

    OPM notes that commenters had an opportunity to submit comments 
during the public comment period for each of its rulemakings including 
the proposed rule on reductions in force, and OPM continues to receive 
higher comment response rates than it has historically received. OPM 
has since issued a final rule in the reduction in force rulemaking, in 
which it responded to relevant concerns, and it will respond to 
comments in its other rulemakings if or when it issues a final rule in 
each.
    OPM observes, however, that performance ratings have long affected 
retention standing in a reduction in force. Such usage is consistent 
with 5 U.S.C. 3502(a), which requires that OPM issue regulations that 
``give due effect'' to, inter alia, ``performance ratings'' in 
determining retention standing among competing employees in a reduction 
in force. See Am. Fed'n of Gov't Emps., AFL-CIO v. Off. of Pers. Mgmt., 
821 F.2d 761, 765 (D.C. Cir. 1987). Further, 5 U.S.C. 4302(a)(3) 
contemplates using appraisal results as a basis for training, 
rewarding, reassigning, promoting, reducing in grade, retaining, and 
removing employees. Thus, the interaction between this rulemaking and 
OPM's reduction in force rulemaking does not represent an unexplained 
gap in OPM's reasoning, but a longstanding feature of the Title 5 
statutory scheme.
    Further, this rule is complementary to OPM's reduction in force 
rule, as it seeks to ensure that performance appraisal systems 
accurately evaluate employee performance while better distinguishing 
levels of performance. A rule that makes performance matter more in RIF 
retention and a rule that seeks to improve the accuracy and 
differentiation of performance ratings address complementary parts of 
the same merit-based personnel system. Indeed, the current compression 
of ratings at the highest levels would deprive any performance-based 
retention criterion of meaningful content; improving the accuracy and 
differentiation of ratings makes any lawful downstream use of those 
ratings more, not less, merit-based.
    While OPM recognizes that implementing standardized distribution 
could involve some risks, the current failure of senior professional 
appraisal systems to meaningfully distinguish performance presents an 
even greater risk. Therefore, OPM continues to believe that any 
potential negative effects in areas such as teamwork or collaboration 
can be adequately addressed through modifications to performance plans 
and tailored team-based awards. The increased accuracy and rigor that 
will be achieved by a standardized distribution directly addresses 
longstanding issues of leniency bias and rating inflation across the 
Federal Government, thereby strengthening accountability and the 
effectiveness of senior professional performance management. 
Accordingly, OPM adopts the language in this section as proposed.

Section 430.506 Planning and Communicating Performance

    This section explains the requirements for planning and 
communicating performance expectations. OPM proposed that rating 
officials must consult with senior professionals to develop written 
performance plans that include critical elements (no non-critical 
elements or additional performance elements), performance standards, 
and performance requirements. Performance plans must be communicated to 
senior professionals on or before the beginning of the appraisal 
period, or upon appointment to a new senior professional position. OPM 
also proposed that agencies may require a review of senior professional 
performance plans by the PRB or another body of the agency's choosing 
to ensure consistency of agency-specific performance requirements.
    OPM did not receive comments specifically addressing this section. 
However, several commenters raised general concerns regarding the 
establishment of objective, job-related performance expectations and 
the challenges of applying standardized approaches to highly 
specialized senior professional roles. These comments are addressed in 
the relevant sections of this preamble. Accordingly, OPM is adopting 
the language in this section as proposed.

Section 430.507 Monitoring Performance

    This section establishes expectations for ongoing performance 
monitoring and feedback throughout the appraisal period. Notably, this 
section requires that progress reviews be held at least quarterly, 
during which the rating official must inform senior professionals of 
how they are performing. Rating officials must also provide advice and 
assistance to senior professionals on how to improve their performance 
and may also discuss available development opportunities for the senior 
professional. The intent of this section is to promote frequent 
performance-related communication between the rating official and 
senior professional.
    Commenter 0005 objected to the requirement that senior 
professionals receive progress reviews at least quarterly, claiming 
that it adds an unnecessary administrative burden. This commenter also 
noted that if OPM's intention is to align the senior professional 
appraisal system more closely with the SES performance appraisal 
system, that the SES regulations only require senior executives to 
receive at least one progress review per year.
    While it is true that the SES regulations require conducting 
progress reviews at least once during the appraisal period,\31\ on 
February 25, 2025, OPM issued a new Senior Executive Service 
performance appraisal system and performance plan,\32\ requiring that 
``[a]t least quarterly, supervisors and executives must meet to 
discuss, and document, progress toward meeting the critical elements in 
the senior executive's performance plan.'' Thus, requiring that senior 
professional progress reviews be conducted at least quarterly aligns 
with the progress review frequency OPM

[[Page 65912]]

expects agencies to be providing for SES members.
---------------------------------------------------------------------------

    \31\ 5 CFR 430.304(b)(2).
    \32\ See supra note 10.
---------------------------------------------------------------------------

    OPM believes that frequent feedback is critical to effective 
performance management and that the benefits of such increased 
communication outweigh the costs, especially in the context of other 
changes that are being made in this final rule. Accordingly, OPM is 
adopting the language in this section as proposed.

Section 430.508 Appraising Performance

    This section describes how agencies must appraise senior 
professionals' performance. It generally parallels the SES appraisal 
rules, requiring timely communication of expectations, establishment of 
appraisal timelines, and assessment of both individual and 
organizational performance. Appraisals must take into account factors 
such as results achieved, the overall quality of performance, appraisal 
guidelines based upon assessments of the agency's performance provided 
by the oversight official, customer perspectives, and compliance with 
merit system principles. The section clarifies that certain SES-
specific factors, such as employee perspectives, are excluded given 
senior professionals' non-supervisory roles.
    OPM received no comments on this section and is adopting the 
language as proposed. We note that the NPRM contained a typographical 
error in which the word ``and'' was omitted from the end of proposed 
Sec.  430.508(d)(4). In this final rule, we correct that error.

Section 430.509 Rating Performance

    This section specifies procedures for deriving and finalizing 
senior professional ratings. It mirrors certain aspects of the SES 
rating procedures, such as requiring rating officials to prepare 
initial summary ratings in writing, share them with senior 
professionals, and provide an opportunity for written response and 
higher-level review before finalizing ratings of record. OPM also 
proposed that agencies with ten or more senior professionals use their 
agency-level Performance Review Board (PRB) to conduct centralized 
review of the initial summary ratings and corresponding recommended pay 
actions. OPM additionally proposed that senior professional performance 
appraisals and ratings are not appealable, beyond what is otherwise 
provided under applicable law and regulation.
    Commenter 0003 claims the final rule eliminates procedural 
protections by removing appeal rights and replacing mandatory review of 
Level 1 (``Unacceptable'') ratings with discretionary processes, 
thereby increasing the risk of arbitrary action.
    On the contrary, while Sec.  430.509(e) establishes that senior 
professional performance appraisals and ratings are not appealable 
beyond what is otherwise provided under applicable law or regulation, 
this provision does not limit or eliminate employees' ability to pursue 
recourse through established statutory or regulatory avenues, such as 
EEO processes or appeals to the MSPB, where applicable. The final rule 
simply eliminates the informal grievance process and the mandatory 
review of Level 1 ratings that previously applied to senior 
professionals under 5 CFR part 430, subpart B. In place of those 
mechanisms, the rule establishes a more structured and robust review 
framework aligned with SES review processes. OPM emphasizes that SES 
members are similarly prohibited by statute \33\ from appealing 
performance appraisals or ratings, yet the SES rating process is widely 
recognized as providing strong procedural safeguards through 
multilayered review. Mirroring these SES provisions, the final rule 
provides that senior professionals are afforded the opportunity to 
receive a higher-level review of their initial summary rating 
regardless of the rating level. In addition, the employee's written 
response and the findings of the higher-level review are provided to 
the PRB, which conducts an independent review and makes recommendations 
to the approving official.
---------------------------------------------------------------------------

    \33\ 5 U.S.C. 4312(d).
---------------------------------------------------------------------------

    Commenter 0011 further argued that the rule violates the Due 
Process Clause of the Fifth Amendment, citing Cleveland Board of 
Education v. Loudermill, 470 U.S. 532 (1985), by eliminating review by 
a neutral adjudicator and foreclosing judicial review. OPM disagrees. A 
performance rating, standing alone, does not deprive an employee of a 
constitutionally protected property or liberty interest; Loudermill 
concerned the procedures required before removal from employment. Any 
suspension, reduction in grade or pay, or removal based on performance 
remains subject to the applicable statutory procedures, including 
advance notice, an opportunity to respond, and, where provided by law, 
appeal to the MSPB and judicial review under 5 U.S.C. 7703. Nothing in 
this rule alters those protections or forecloses any review otherwise 
available by law.
    The final rule adopts a strong oversight framework for senior 
professional ratings that has proven to be effective for the SES, 
ensuring that ratings are subject to multiple levels of review and 
oversight before being finalized. For these reasons, OPM concludes that 
the final rule maintains appropriate procedural protections, reduces 
the risk of arbitrary action, and strengthens the consistency and 
integrity of the senior professional rating process. Accordingly, OPM 
is adopting the language in this section as proposed.

Section 430.510 Details and Job Changes

    This section addresses how performance appraisal systems are to 
handle senior professionals who experience job changes, such as 
details, temporary assignments, transfers, or reassignments during the 
appraisal period. It closely mirrors SES provisions, requiring 
performance goals and requirements to be established for such 
assignments and ensuring that written appraisals are completed and 
transferred appropriately to the receiving organization or agency.
    OPM received no comments on this section and is adopting the 
language as proposed.

Section 430.511 Performance Review Boards (PRBs)

    This section refines existing requirements for agency-level 
centralized review of senior professional performance ratings and pay 
actions. As discussed in the proposed rule, current senior professional 
pay regulations at 5 CFR part 534, subpart E, require agencies with 10 
or more senior professionals to conduct a centralized review of 
proposed ratings and pay actions by a panel designated by the agency 
head. This final rule requires that agencies subject to the SES must 
use their established agency-level PRB to conduct the centralized 
review, including providing written recommendations to the approving 
official on senior professional ratings of record, performance awards, 
and pay adjustments. However, agencies not subject to the SES must 
establish a body equivalent to the PRB.
    Commenter 0010 argues that the use of PRBs could introduce 
politicization into the appraisal process, citing a separate directive 
by the Administration to reconstitute ERBs with a majority of senior 
noncareer officials. The commenter states, ``If that same approach is 
extended to PRBs reviewing SL/ST employees, the result would be a more 
politicized performance-review process at precisely the point where the 
proposal centralizes more authority in

[[Page 65913]]

PRBs and makes ratings less contestable.''
    OPM understands the commenter to be referring to the Presidential 
Memorandum titled, ``Restoring Accountability for Career Senior 
Executives,'' \34\ which did direct agency heads to terminate their 
existing ERBs and reconstitute them with a majority of senior noncareer 
officials. However, the commenter erroneously conflates the ERB and PRB 
directives. The PRB directive makes no mention of noncareer officials. 
Rather, it calls for agency heads to reconstitute PRB membership ``with 
individuals committed to full enforcement of SES performance 
evaluations that promote and assure an SES of the highest caliber.'' 90 
FR at 8482. This directive is specifically intended to strengthen 
accountability and ensure rigorous, consistent application of 
performance standards--not to politicize PRBs. OPM notes that both the 
SES appraisal regulations \35\ and this final rule \36\ require that 
the PRB, or equivalent body as appropriate, be comprised of a majority 
of career appointees when appraising the performance of a career 
appointee. The Presidential Memorandum does not alter that regulatory 
requirement: even a reconstituted PRB must consist of a majority of 
career appointees whenever it appraises the performance of a career 
senior professional--a structural safeguard that distinguishes PRBs 
from the ERB directive the commenter cites.
---------------------------------------------------------------------------

    \34\ 90 FR 8481 (Jan. 30, 2025).
    \35\ 5 CFR 430.311(a)(3).
    \36\ 5 CFR 430.511 requires the PRB or equivalent body to 
fulfill all requirements of centralized review found in 5 CFR part 
534, subpart E, including 5 CFR 534.505(f)(1).
---------------------------------------------------------------------------

    OPM also notes that prior approaches to PRB composition included 
practices which were determined to be inconsistent with merit-based 
principles, including the use of ``DEI'' considerations that were 
addressed in subsequent SES regulatory revisions.\37\ Those changes 
clarified that PRB membership must be based on merit and free from 
impermissible considerations, reinforcing objectivity in the review 
process. Thus, reconstituting PRBs with members committed to full 
enforcement of performance evaluations enhances, rather than 
diminishes, merit-focused objectivity.
---------------------------------------------------------------------------

    \37\ 90 FR 44291 (Sept. 15, 2025).
---------------------------------------------------------------------------

    Further, the PRB, or the equivalent body conducting the centralized 
review, operates alongside higher-level review and other safeguards to 
ensure that ratings are not determined unilaterally but are subject to 
structured oversight. For these reasons, OPM concludes that PRBs, as 
implemented under this rule, strengthen the integrity, consistency, and 
accountability of the senior professional performance appraisal 
process. Accordingly, OPM is adopting the language in this section as 
proposed.

Section 430.512 Using Performance Results

    This section requires agencies to use performance results as a 
basis for making human capital decisions, including pay adjustments, 
awards, retention decisions, and other personnel actions. OPM 
reiterates that actions to suspend, demote, or remove senior 
professionals from the civil service for unacceptable performance 
remain subject to the provision(s) of applicable law. OPM also proposed 
that performance appraisals be used as a factor in assessing a senior 
professional's continuing development needs and that agencies must 
provide appropriate incentives and recognition for high performance.
    OPM received no comments on this section and is adopting the 
language as proposed.

Section 430.513 Training and Evaluation

    To assure effective implementation of performance appraisal 
systems, this section requires agencies to provide appropriate 
information and training to individuals involved in the senior 
professional performance appraisal process, periodically evaluate the 
effectiveness of their appraisal systems, and implement improvements as 
needed. OPM proposed that these evaluations must provide for both 
assessment of effectiveness and compliance with relevant laws, OPM 
regulations, and OPM performance management policy.
    OPM received no comments on this section and is adopting the 
language as proposed.

Section 430.514 OPM Review of Agency Systems

    This section requires agencies to submit senior professional 
performance appraisal systems to OPM for review and approval. Appraisal 
systems are reviewed by OPM for compliance with statutory, regulatory, 
and OPM policy requirements. Consistent with 5 U.S.C. 4304(b)(3), this 
section also requires that if OPM determines a system does not meet the 
requirements of the law or regulation, OPM will identify the 
requirements that were not met and direct the agency to take corrective 
action, and the agency must comply. This review function supports 
consistent and compliant performance management practices across the 
Federal Government.
    Commenter 0011 asserted that OPM lacks authority to review agency 
performance appraisal systems and direct corrective action, arguing 
that such oversight constitutes an impermissible intrusion into agency 
personnel management and conflicts with statutory roles assigned to 
other entities, such as the MSPB and the OSC.
    OPM does not agree that the review and oversight provisions in 5 
CFR 430.514 exceed its statutory authority or improperly intrude on 
agency personnel management. OPM's authority to oversee performance 
appraisal systems derives directly from 5 U.S.C. chapter 43, which 
authorizes OPM to prescribe regulations governing performance appraisal 
systems and ensure that such systems comply with statutory 
requirements. Under 5 U.S.C. 4302, agencies are required to develop 
performance appraisal systems in accordance with regulations prescribed 
by OPM. This statutory framework necessarily contemplates that OPM will 
not only establish requirements for agency systems but also ensure that 
those systems are implemented in a manner consistent with law and 
regulation. The authority to review agency systems for compliance and 
to require corrective action where deficiencies are identified is 
inherent in OPM's responsibility to administer and enforce these 
statutory requirements.
    OPM also does not agree that its oversight role conflicts with the 
statutory functions of the MSPB or the OSC. Those entities serve 
distinct and complementary roles within the Federal personnel system. 
The MSPB adjudicates appeals and enforces merit system principles in 
individual cases, while the OSC investigates and prosecutes prohibited 
personnel practices. In contrast, OPM's role under chapter 43 is to 
establish Governmentwide performance management policy and ensure that 
agency systems comply with applicable requirements. The oversight 
provided in Sec.  430.514 operates at the system level and does not 
replace or diminish the independent authorities of these entities. 
Nothing in this rule amends 5 U.S.C. 2302 or the Whistleblower 
Protection Act, and allegations of prohibited personnel practices 
remain fully within the jurisdiction of the OSC and the MSPB.
    For these reasons, OPM concludes that the review and oversight 
provisions in Sec.  430.514 are fully consistent with OPM's statutory 
authority and responsibilities under 5 U.S.C. chapter 43 and are 
necessary to ensure that

[[Page 65914]]

performance appraisal systems for senior professionals are implemented 
in a lawful, consistent, and effective manner across the Federal 
Government. Accordingly, OPM is adopting the language in this section 
as proposed.

Conforming Amendments

    OPM proposed conforming amendments in parts 351, 430, 451, 534, 
537, and 630 to harmonize terms, citations, and language to comport 
with this rule. OPM also proposed an editorial correction to a citation 
in part 894. OPM did not receive comments on those proposals and is 
adopting them in this final rule, except for technical updates to the 
part 351 conforming amendments described below.
    After the proposed rule was published, OPM issued a final rule 
comprehensively revising its reduction in force regulations at 5 CFR 
part 351, effective September 2, 2026. See Reduction in Force, 91 FR 
49178 (Aug. 3, 2026). In this final rule, OPM is accordingly updating 
the conforming amendments to part 351 to reflect part 351 as amended by 
that final rule, including the revised authority citation, the revised 
definition of ``rating of record'' in Sec.  351.203, and the relocation 
of the performance-credit provisions from former Sec.  351.504 to Sec.  
351.503. These updates are technical and conforming in nature; they 
harmonize terminology and cross-references with the amended part 351 
and do not alter the substance of the amendments as proposed.
    In addition, OPM is making four technical corrections in subpart B 
of part 430, which this rule already amends. On July 7, 2026, OPM 
published a final rule, Performance Appraisal for General Schedule, 
Prevailing Rate, and Certain Other Employees, 91 FR 41521 (effective 
August 6, 2026), which revised and republished Sec.  430.208 and 
relocated the patterns of summary levels from Sec.  430.208(d) to Sec.  
430.208(e). That rule updated cross-references in Sec. Sec.  351.504 
and 537.108(b) but did not update four references within part 430 
itself. This final rule accordingly revises the references to Sec.  
430.208(d) in Sec.  430.201(c)(3), in the definitions of ``Performance 
rating'' and ``Rating of record'' in Sec.  430.203, and in Sec.  
430.204(b)(3)(iv) to refer to Sec.  430.208(e).
    In revising the definition of ``Rating of record,'' OPM is also 
correcting a longstanding defective paragraph designation--the 
definition refers to ``(2)'' with no corresponding ``(1)''--without 
change in meaning. OPM is further correcting Sec.  430.204(b)(3)(iii), 
which cites ``Sec.  430.206(b)(7)(i)(A) and (ii)(A)'' although Sec.  
430.206(b)(7) contains no subdivisions; the provisions cited are 
located in Sec.  430.206(b)(8)(i)(A) and (b)(8)(ii)(A). These 
corrections are technical and non-substantive: they conform citations 
and paragraph designations to regulations previously promulgated and do 
not alter the rights or obligations of any party. To the extent these 
corrections were not included in the proposed rule, OPM finds good 
cause under 5 U.S.C. 553(b)(B) to adopt them without prior notice and 
comment because notice and comment are unnecessary for non-substantive, 
technical corrections.

Parallel Regulations in Part 1330

    The regulations at 5 CFR part 1330, subpart D, are parallel 
regulations to 5 CFR part 430 subpart D, which govern the performance 
appraisal system certification requirements for the SES and senior 
professionals. Performance appraisal system certification is co-
regulated by OPM and OMB and, since OPM proposed conforming amendments 
to 5 CFR part 430, subpart D, OMB proposed identical conforming changes 
to 5 CFR part 1330, subpart D. Neither OPM nor OMB received comments 
specific to those proposals and OMB is adopting them with changes 
consistent with those discussed in this final rule.

Expected Impact of This Rulemaking

A. Statement of Need

    OPM is issuing this rule pursuant to its authority to issue 
regulations governing performance appraisals under subchapter I of 
chapter 43 of title 5, United States Code. As discussed in the 
Background, the purpose of this rule is to establish separate 
regulations that will be better suited to the performance appraisal 
needs of senior professionals. While many provisions applicable to 
senior professionals such as pay, aggregate limit on compensation, 
leave accrual, and leave carryover limit have evolved over the years to 
match what the SES receive, senior professionals have remained subject 
to the same general performance appraisal regulations that apply to 
most non-SES federal employees, including rank-and-file GS and 
prevailing rate employees. The lack of appraisal rules specifically 
tailored to senior professionals' important roles and high level of 
compensation hinders agencies' ability to fully leverage the strategic 
potential of these positions.
    OPM found that, despite its previous efforts to promote rigor in 
senior professional performance appraisal by encouraging agencies to 
develop more stringent performance requirements,\38\ senior 
professional ratings distributions come nowhere close to resembling a 
normal bell curve. As mentioned in the Background, Governmentwide 
senior professional performance rating data for fiscal years 2023 and 
2024 \39\ show that approximately 90 percent of senior professionals 
received a Level 5 (``Outstanding'') or Level 4 (``Exceeds Fully 
Successful'') rating and less than a half of one percent of senior 
professionals were rated below Level 3 (``Fully Successful''). The 
distribution of these ratings suggests there is inflation of senior 
professional ratings and poor performing employees are likely not being 
identified or held accountable through a rigorous appraisal process. As 
such, action must be taken to re-set and infuse rigor into the senior 
professional performance appraisal process.
---------------------------------------------------------------------------

    \38\ See note 2.
    \39\ See note 3.
---------------------------------------------------------------------------

    OPM recognizes that agencies have operated under a regulatory 
framework that prohibited pre-established distributions of ratings for 
several decades. After evaluating Governmentwide ratings data, 
implementation experience, and academic literature, OPM has concluded 
that the previous approach has not adequately promoted meaningful 
distinctions in performance among senior professionals.

B. Impact

    OPM is establishing a new subpart specifically dedicated to the 
performance appraisal of senior professionals and that more closely 
resembles the SES appraisal system--including changes that allow OPM to 
establish and enforce a standardized distribution of performance 
ratings--to enable agencies and senior professionals to be held to a 
higher standard of accountability and ensure only the truly deserving 
performers are rewarded for their performance.
    Allowing for the establishment of limits on senior professional 
ratings will result in a more normalized distribution of performance 
ratings. OPM anticipates that a standardized distribution will 
incentivize improved performance of senior professionals as they no 
longer would expect to receive high ratings without demonstrating 
superior performance relative to the other senior professionals in 
their agency. Consequently, improved senior professional performance 
would ultimately improve the performance of the Federal Government in 
providing services to the American public.

[[Page 65915]]

    Establishing senior professional performance appraisal regulations 
that more closely align with the Senior Executive Service appraisal 
regulations creates greater opportunities for oversight and review of 
senior professional ratings. In the final rule, agencies employing 10 
or more senior professionals will utilize their agency-level PRB to 
conduct the centralized review required in subpart E of 5 CFR part 534. 
Additionally, all senior professionals will now be able to request 
higher-level review of their initial summary rating, regardless of the 
rating level, bringing enhanced credibility, transparency, and 
accountability to the rating process.

C. Costs

    This rule will affect the operations of more than 60 Federal 
agencies--ranging from cabinet-level departments to small independent 
agencies--that have SL or ST employees. To comply with the regulatory 
changes, individuals employed by affected agencies will need to spend 
time updating agency senior professional performance appraisal policies 
and procedures. For this cost analysis, the assumed average salary rate 
of federal employees performing this work will be the rate in 2025 for 
GS-14, step 5, in the Washington, DC, locality pay table ($161,486 
annual locality rate and $77.38 hourly locality rate). We assume the 
total dollar value of labor, which includes wages, benefits, and 
overhead, is equal to 200 percent of the wage rate, resulting in an 
assumed labor cost of $154.76 per hour.
    Additionally, affected agencies will need to review the rule and 
update their policies and procedures. We estimate that, in the first 
year following publication of the final rule, this will require an 
average of 80 hours of work by employees with an average hourly cost of 
$154.76 per hour. This will result in estimated one-time costs of about 
$12,400 per agency and about $744,000 Governmentwide.
    Senior professionals revise their performance requirements each 
year as they develop their performance plans. OPM anticipates that 
adjusting their specific performance requirements to reflect the 
updated critical elements may take each senior professional slightly 
longer than usual in the first year. We estimate that this will require 
approximately 15 additional minutes in the first year of implementation 
compared to the time usually spent developing specific performance 
requirements for the annual performance plan. Based on the average 
salary of the SL and ST pay plans in September 2024 (most recent 
available data), we assume an overall average SL/ST salary rate of 
$204,735, or $98.43 per hour.\40\ We assume the total dollar value of 
labor, which includes wages, benefits, and overhead, is equal to 200 
percent of the wage rate, resulting in an assumed labor cost of $196.86 
per hour. There are approximately 1,420 employees with an SL or ST pay 
plan in the executive branch. We estimate this will result in a one-
year, transitional increase in costs of about $70,000 Governmentwide.
---------------------------------------------------------------------------

    \40\ Average senior professional pay drawn from Office of 
Personnel Management FedScope data.
---------------------------------------------------------------------------

    OPM anticipates that the overall implementation costs would be 
limited in duration and would total about $814,000. OPM did not receive 
any comments on its estimates of costs.

D. Benefits

    Senior professionals are critical to the effective operation and 
strategic direction of the Federal Government. The changes in this rule 
enhance parity between senior professionals and the SES by establishing 
appraisal rules for senior professionals that are more closely aligned 
with SES appraisal rules. This relieves agencies from superfluous 
requirements found in subpart B of part 430 that are not well-suited to 
managing senior professional performance, such as the requirement to 
establish one or more performance appraisal programs.
    By allowing OPM to establish a limit on the number of senior 
professionals who can receive the highest ratings, there will be a 
clear distinction of the highest performers across an agency and the 
Federal Government. Agencies will no longer be able to rate all of 
their senior professionals at the highest performance ratings, thus 
encouraging senior professionals to strive for increased levels of 
performance and ultimately provide better results for the Federal 
Government and the American public.
    Senior professionals will benefit from increased feedback and 
oversight under the new subpart, as it requires more frequent progress 
reviews and provides the opportunity for a higher-level review of an 
initial summary rating at any level instead of a mandatory review of a 
Level 1 (``Unacceptable'') rating of record. Agencies employing 10 or 
more senior professionals will see enhanced oversight by utilizing 
agency-level PRBs to oversee recommended ratings of record, pay 
adjustments, and performance awards, thus providing overall increased 
Governmentwide consistency for senior professional performance 
appraisal.

E. Regulatory Alternatives

    An alternative to this rulemaking is to not establish a new subpart 
in part 430 dedicated to senior professional performance appraisal and 
instead OPM could issue further guidance encouraging agencies to be 
increasingly rigorous in managing the performance of their senior 
professionals. However, without the provisions in this subpart, 
agencies would continue to be prevented from applying a standardized 
distribution of senior professional ratings by 5 CFR 430.208(c). As 
mentioned in the Statement of Need, previous attempts to curb rating 
inflation through guidance have not been successful; instead, it 
appears that the percentage of senior professionals receiving Level 4 
or 5 performance ratings has reached a point where almost all senior 
professionals (i.e., approximately 90%) are receiving a Level 4 or 5 
rating. Without the ability to place limits on senior professional 
ratings, the pervasive inflation of senior professional ratings will 
likely continue, resulting in a lack of meaningful rating distinction 
and thus, lack of accountability.
    Another alternative to this rulemaking is for OPM to pursue a 
different rulemaking that would amend subpart B of part 430 by 
excluding senior professionals from the forced distribution prohibition 
contained in that subpart. While this approach would achieve some of 
the intended purpose of the proposed rule, it would lack the meaningful 
reforms to senior professional performance appraisal that increase 
parity with the SES appraisal rules, such as providing for higher-level 
review of initial summary ratings and the PRB providing centralized 
review. Failing to establish a separate subpart in part 430 dedicated 
to senior professional performance appraisal would result in senior 
professionals continuing to be subject to the cumbersome provisions of 
subpart B of part 430, which require agencies to establish both 
appraisal systems and appraisal programs, which is burdensome and not 
aligned with OPM's vision of centralized, effective senior professional 
performance management.

Severability

    OPM intends that, if any of the provisions of this rule as 
finalized were held to be invalid or unenforceable by its terms, or as 
applied to any person or circumstance, that provision would be 
severable from its respective section(s) and would not affect the 
remainder thereof or the application of the

[[Page 65916]]

provision to other persons not similarly situated or to other 
dissimilar circumstances. For example, if the implementation of a 
standardized distribution of ratings were held to be unenforceable, the 
remaining provisions established by this final rule would be unaffected 
and could remain in effect.

Regulatory Compliance

A. Regulatory Flexibility Act

    The Director of OPM certifies that this rulemaking will not have a 
significant economic impact on a substantial number of small entities 
because it will apply only to Federal agencies and employees.

B. Regulatory Review

    OPM has examined the impact of this rule as required by Executive 
Order 12866 and Executive Order 13563, which direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public, 
health, and safety effects, distributive impacts, and equity). This 
rulemaking is not a ``significant regulatory action'' under section 
3(f) of Executive Order 12866. This final rule is not an E.O. 14192 
regulatory action because it does not impose any more than de minimis 
regulatory costs.

C. Federalism

    This regulation will not have substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined that this rule does not have sufficient 
federalism implications to warrant preparation of a Federalism 
Assessment.

D. Civil Justice Reform

    This regulation meets the applicable standards set forth in section 
3(a) and (b)(2) of Executive Order 12988.

E. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that would impose spending costs on State, local, or 
tribal governments in the aggregate, or on the private sector, in any 1 
year of $100 million in 1995 dollars, updated annually for inflation. 
That threshold is currently approximately $206 million. This rulemaking 
will not result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, in excess of 
the threshold. Thus, no written assessment of unfunded mandates is 
required.

F. Congressional Review Act

    The Office of Management and Budget's (OMB) Office of Information 
and Regulatory Affairs has determined this rule does not meet the 
criteria listed in 5 U.S.C. 804(2).

G. Paperwork Reduction Act

    This regulatory action will not impose any reporting or 
recordkeeping requirements under the Paperwork Reduction Act.

List of Subjects

5 CFR Part 351

    Administrative practice and procedure, Government employees.

5 CFR Parts 430 and 451

    Decorations, Government employees.

5 CFR Part 534

    Government employees, Hospitals, Students, Wages.

5 CFR Part 537

    Administrative practice and procedure, Government employees, 
Students, Wages.

5 CFR Part 630

    Emergency preparedness, Government employees, Reporting and 
recordkeeping requirements, Wages, Weather.

5 CFR Part 894

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Hostages, Iraq, 
Kuwait, Lebanon, Military personnel, Reporting and recordkeeping 
requirements, Retirement.

5 CFR Part 1330

    Government employees.

    Accordingly, for the reasons stated in the preamble, OPM amends 5 
CFR parts 351, 430, 451, 534, 537, 630, and 894, and OMB amends 5 CFR 
part 1330 as follows:

PART 351--REDUCTION IN FORCE

0
1. The authority citation for part 351 continues to read as follows:

    Authority:  5 U.S.C. 1103, 1104, 1302, 2301, 3502, 3503, 38 
U.S.C. 4331; E.O. 14284, 90 FR 17729; 5 CFR 2.2(c). Sec. 351.801 
also issued under E.O. 12828, 58 FR 2965, 3 CFR, 1993 Comp., p. 569.

Subpart B--General Provisions

0
2. Amend Sec.  351.203 by revising the definition of ``Rating of 
record'' to read as follows:


Sec.  351.203  Definitions.

* * * * *
    Rating of record means the performance rating prepared at the end 
of an appraisal period for performance of agency-assigned duties over 
the entire period and the assignment of a summary level within a 
pattern (as specified in Sec.  430.208(e) of this chapter) or, for an 
employee covered by subpart E of part 430 of this chapter, a summary 
level specified in Sec.  430.505(a)(6) of this chapter. For an employee 
not subject to 5 U.S.C. chapter 43, or part 430 of this chapter, it 
means the officially designated performance rating, as provided for in 
the agency's appraisal system, that is considered to be an equivalent 
rating of record under the provisions of Sec.  430.201(c) or Sec.  
430.501(b) of this chapter, as applicable.
* * * * *

Subpart E--Retention Standing

0
3. Amend Sec.  351.503 by:
0
a. In paragraph (a)(1), adding the words ``or the summary performance 
levels in Sec.  430.505(a)(6) of this chapter'' after the words ``the 
patterns of summary level in 5 CFR 430.208(e)''; and
0
b. Revising paragraphs (b)(2) and (3).
    The revisions read as follows:


Sec.  351.503  Performance.

* * * * *
    (b) * * *
    (2) For competing employees who received ratings of record while 
covered by part 430, subpart B or E, of this chapter, the summary 
levels assigned for those ratings of record must be used to establish 
the employee's performance credit in a reduction in force in accordance 
with paragraph (a) of this section (as augmented by veterans' 
preference in accordance with Sec.  351.504).
    (3) For competing employees who received performance ratings while 
not covered by the provisions of 5 U.S.C. chapter 43 and subpart B or E 
of part 430 of this chapter, those performance ratings must be 
considered ratings of record with summary levels for designating an 
employee's performance credit in a reduction in force only when the 
agency conducting the reduction in force determines, in its sole 
discretion, that those performance ratings are equivalent to ratings of 
record under the

[[Page 65917]]

provisions of Sec.  430.201(c) or Sec.  430.501(b) of this chapter, as 
applicable.
* * * * *

PART 430--PERFORMANCE MANAGEMENT

0
4. The authority citation for part 430 continues to read as follows:

    Authority:  5 U.S.C. 2301, chapter 43 and 5307(d).

Subpart B--Performance Appraisal for General Schedule, Prevailing 
Rate, and Certain Other Employees


Sec.  430.201  [Amended]

0
5. Amend Sec.  430.201, in paragraph (c)(3), by removing ``Sec.  
430.208(d)'' and adding in its place ``Sec.  430.208(e)''.

0
6. Amend Sec.  430.202 by revising paragraph (a)(2) to read as follows:


Sec.  430.202  Coverage.

    (a) * * *
    (2) Section 4301(2) of title 5, United States Code, defines 
employees covered by statute by this subpart. In addition to General 
Schedule (GS/GM) employees, coverage includes, but is not limited to 
prevailing rate employees, and excludes senior-level and scientific and 
professional employees paid under 5 U.S.C. 5376.
* * * * *

0
7. Amend Sec.  430.203 by revising the definitions of ``Performance 
rating'' and ``Rating of record'' to read as follows:


Sec.  430.203  Definitions.

* * * * *
    Performance rating means the written, or otherwise recorded, 
appraisal of performance compared to the performance standard(s) for 
each critical and non-critical element on which there has been an 
opportunity to perform for the minimum period. A performance rating may 
include the assignment of a summary level within a pattern (as 
specified in Sec.  430.208(e)).
* * * * *
    Rating of record means the performance rating, which constitutes 
the official rating of record referenced in this chapter, prepared--
    (1) At the end of an appraisal period for performance of agency-
assigned duties over the entire period, including the assignment of a 
summary level within a pattern (as specified in Sec.  430.208(e)); or
    (2) In accordance with Sec.  531.404(a)(1) of this chapter.
* * * * *


Sec.  430.204  [Amended]

0
8. Amend Sec.  430.204 by:
0
a. In paragraph (b)(3)(iii), removing ``Sec.  430.206(b)(7)(i)(A) and 
(ii)(A)'' and adding in its place ``Sec.  430.206(b)(7), (b)(8)(i)(A), 
and (b)(8)(ii)(A)''; and
0
b. In paragraph (b)(3)(iv), removing ``Sec.  430.208(d)'' and adding in 
its place ``Sec.  430.208(e)''.

Subpart C--Managing Senior Executive Performance

0
9. Amend Sec.  430.305 by revising paragraph (d) to read as follows:
* * * * *
    (d) OPM may establish, and refine as needed, a standardized 
distribution of some or all SES rating levels which agencies must apply 
when rating SES members, except that noncareer SES members may be 
excluded from such standardized distribution requirements, as 
determined by OPM.

Subpart D--Performance Appraisal Certification for Pay Purposes

0
10. Amend Sec.  430.402 by revising the definitions of ``Appraisal 
system'' and ``Performance expectations'' to read as follows:


Sec.  430.402  Definitions.

* * * * *
    Appraisal system means the policies, practices, and procedures an 
agency establishes under 5 U.S.C. chapter 43 and subparts C and E of 
this part, or other applicable legal authority, for planning, 
monitoring, developing, evaluating, and rewarding employee performance. 
This includes performance management systems as defined at Sec.  
430.303 and performance appraisal systems as defined at Sec.  430.503.
* * * * *
    Performance expectations means critical elements and performance 
requirements that constitute the senior executive performance plans (as 
defined in Sec.  430.303) established for senior executives, the 
critical elements and performance requirements that constitute the 
senior professional performance plans (as defined in Sec.  430.503) 
established for senior professionals, or other appropriate means 
authorized under performance appraisal systems not covered by 5 U.S.C. 
chapter 43 for communicating what a senior employee is expected to do 
and the manner in which he/she is expected to do it, and may include 
contribution to agency performance, where appropriate.
* * * * *

0
11. Amend Sec.  430.403 by revising paragraphs (b) through (d) to read 
as follows:


Sec.  430.403  System certification.

* * * * *
    (b) Except as provided in paragraph (c) of this section, agencies 
subject to 5 U.S.C. chapter 43 and this part seeking certification of 
their appraisal systems must submit systems that have been approved by 
OPM under Sec.  430.314 or Sec.  430.514 as applicable. In some 
agencies, the performance appraisal system(s) covers employees in many 
organizations and/or components, and their ability to meet the 
certification criteria in Sec.  430.404 may vary significantly. In such 
cases, an agency may establish and/or submit separate performance 
appraisal systems for each of these distinct organizations and/or 
components to ensure timely certification of those performance 
appraisal system(s) that meet the criteria. New appraisal systems 
established under subpart C or E of this part, as applicable based on 
the employees covered, must be approved by OPM.
    (c) When an agency establishes a new appraisal system for the 
purpose of seeking certification under this subpart, the agency may 
submit that system for certification even if it has not yet been 
approved by OPM under Sec.  430.314 or Sec.  430.514, as applicable. 
OPM will certify, with OMB concurrence, only those systems that OPM 
determines meet the approval requirements of subpart C or E of this 
part, as applicable.
    (d) An agency must establish an appraisal system(s), as defined in 
Sec.  430.402, for its senior professionals that meets the requirements 
of subpart E of this part, and is separate from the system(s) 
established to cover its SES members under subpart C of this part. For 
the purpose of certification under this subpart, such senior 
professional appraisal system(s) must meet the certification criteria 
set forth in Sec.  430.404.
* * * * *

0
12. Amend Sec.  430.404 by revising paragraphs (a)(2), (5), (7), and 
(8) to read as follows:


Sec.  430.404  Certification criteria.

    (a) * * *
    (2) Consultation, so that the performance expectations for senior 
employees meet the requirements of subparts C and E of this part, as 
applicable, and/or other applicable legal authority; are developed with 
the input and involvement of the individual senior employees who are 
covered thereby; and are communicated to them at the beginning of the 
applicable

[[Page 65918]]

appraisal period, and/or at appropriate times thereafter;
* * * * *
    (5) Appropriate assessments of the agency's performance--overall 
and with respect to each of its particular missions, components, 
programs, policy areas, and support functions--such as reports of the 
agency's Government Performance and Results Act (GPRA) goals, annual 
performance plans and targets, program performance measures, and other 
appropriate indicators, as well as evaluation guidelines based, in 
part, upon those assessments, that are communicated by the agency head, 
or an individual specifically designated by the agency head for such 
purpose, to senior employees, appropriate senior employee rating and 
reviewing officials, and PRB members. These assessments and guidelines 
are to be provided at the conclusion of the appraisal period but before 
individual senior employee performance ratings are recommended, so that 
they may serve as a basis for individual performance evaluations, as 
appropriate. The guidance provided must conform to subpart C or E of 
this part, as applicable;
* * * * *
    (7) Accountability, so that final agency head decisions and any PRB 
recommendations regarding senior employee ratings consistent with 
subparts C and E of this part, individually and overall, appropriately 
reflect the employee's performance expectations, relevant program 
performance measures, and such other relevant factors as the PRB may 
find appropriate; in the case of supervisory senior employees, ratings 
must reflect the degree to which performance standards, requirements, 
or expectations for individual subordinate employees clearly link to 
organizational mission, GPRA strategic goals, or other program or 
policy objectives and take into account the degree of rigor in the 
appraisal of their subordinate employees;
    (8) Performance differentiation, so that the system(s) includes at 
least one summary level of performance above fully successful, 
including a summary level that reflects outstanding performance, as 
defined in Sec.  430.402, and so that its annual administration results 
in meaningful distinctions based on relative performance that take into 
account the assessment of the agency's performance against relevant 
program performance measures, as described in paragraph (a)(6) of this 
section, employee performance expectations, and such other relevant 
factors as may be appropriate. For equivalent systems that do not use 
summary ratings, the performance appraisal system must provide for 
clear differentiation of performance at the outstanding level; and
* * * * *

0
13. Amend Sec.  430.405 by revising paragraphs (b)(1)(iii)(B) and (C) 
and (h)(2) to read as follows:


Sec.  430.405  Procedures for certifying agency appraisal systems.

* * * * *
    (b) * * *
    (1) * * *
    (iii) * * *
    (B) For the agency's senior professionals covered by subpart E of 
this part, five summary levels--an outstanding level, a fully 
successful level, a level between outstanding and fully successful, an 
unacceptable level, and a level between fully successful and 
unacceptable; and
    (C) For agencies not subject to subparts C and E of this part, a 
summary rating level that reflects outstanding performance or a 
methodology that clearly differentiates outstanding performance, as 
defined in Sec.  430.402;
* * * * *
    (h) * * *
    (2) An agency's system certification is automatically suspended 
when OPM withdraws performance appraisal system approval or mandates 
corrective action because of misapplication of the system as authorized 
under Sec. Sec.  430.314(c), 430.403(e), and 430.514(c).
* * * * *

0
14. Add subpart E to read as follows:
Subpart E--Managing Senior Professional Performance
Sec.
430.501 General.
430.502 Coverage.
430.503 Definitions.
430.504 Senior professional performance appraisal systems.
430.505 System standards for senior professional performance 
appraisal systems.
430.506 Planning and communicating performance.
430.507 Monitoring performance.
430.508 Appraising performance.
430.509 Rating performance.
430.510 Details and job changes.
430.511 Performance Review Boards (PRBs).
430.512 Using performance results.
430.513 Training and evaluation.
430.514 OPM review of agency systems.


Sec.  430.501  General.

    (a) Statutory authority. Chapter 43 of title 5, United States Code, 
provides for the establishment of agency performance appraisal systems 
and requires the Office of Personnel Management (OPM) to prescribe 
regulations governing such systems. The regulations in this subpart in 
combination with statute set forth the requirements for managing the 
performance for senior-level (SL) positions classified above GS-15 
pursuant to 5 U.S.C. 5108 and scientific or professional (ST) positions 
established under 5 U.S.C. 3104, and which are compensated under 5 
U.S.C. 5376.
    (b) Equivalent ratings of record. (1) If an agency has 
administratively adopted and applied the procedures of this subpart to 
evaluate the performance of its employees, the ratings of record 
resulting from that evaluation are considered ratings of record for 
reduction in force purposes.
    (2) Other performance evaluations given while an employee is not 
covered by the provisions of this subpart are considered ratings of 
record for reduction in force purposes when the performance 
evaluation--
    (i) Was issued as an officially designated evaluation under the 
employing agency's performance evaluation system;
    (ii) Was derived from the appraisal of performance against 
expectations that are established and communicated in advance and are 
work related; and
    (iii) Identified whether the employee performed acceptably.
    (3) When the performance evaluation does not include five summary 
levels comparable to those established at Sec.  430.505(a)(6), the 
agency may identify a level based on information related to the 
appraisal process.


Sec.  430.502  Coverage.

    (a) Covered positions. This subpart applies to the following types 
of positions:
    (1) Senior-level (SL) positions classified above GS-15 pursuant to 
5 U.S.C. 5108 and paid under 5 U.S.C. 5376; and
    (2) Scientific or professional (ST) positions established under 5 
U.S.C. 3104 and paid under 5 U.S.C. 5376.
    (b) Administrative exclusions. OPM may exclude any position or 
group of positions in the excepted service under the authority of 5 
U.S.C. 4301(2)(G). Excepted service positions for which employment is 
not reasonably expected to exceed the minimum period established under 
Sec.  430.504(b)(4) in a consecutive 12-month period are not subject to 
this subpart.


Sec.  430.503  Definitions.

    In this subpart--
    Agency means--

[[Page 65919]]

    (1) An Executive agency as defined in 5 U.S.C. 105;
    (2) Any other entity that is not part of an Executive agency and 
for which OPM has approved establishment of one or more scientific or 
professional positions under 5 U.S.C. 3104.
    Appraisal period means the established period of time for which a 
senior professional's performance will be appraised and rated.
    Approving official means an agency designated official with 
authority to make SL or ST appointments and who assigns the rating of 
record.
    Critical element means a key component of a senior professional's 
work that contributes to organizational goals and results and is so 
important that unacceptable performance on the element would make the 
senior professional's overall job performance unacceptable.
    Initial summary rating means an overall rating level the rating 
official derives, from appraising the senior professional's performance 
during the appraisal period in relation to the critical elements and 
performance standards and requirements, and forwards to the Performance 
Review Board as the recommended rating of record.
    Oversight official means the agency head or the individual 
specifically designated by the agency head who provides oversight of 
the performance management system and issues performance appraisal 
guidelines.
    Performance means the accomplishment of the work described in the 
senior professional's performance plan.
    Performance appraisal means the review and evaluation of a senior 
professional's performance against critical elements and performance 
standards and requirements.
    Performance appraisal system means the policies, practices, and 
procedures an agency establishes under 5 U.S.C. chapter 43 and this 
subpart, or other applicable legal authority, for planning, monitoring, 
developing, evaluating, and rewarding employee performance.
    Performance rating means the written, or otherwise recorded, 
appraisal of performance compared to the performance standard(s) for 
each critical element on which there has been an opportunity to perform 
for the minimum period. A performance rating may include the assignment 
of a numerical summary performance level.
    Performance requirement means a description of what a senior 
professional must accomplish, or the competencies demonstrated, for a 
critical element. A performance requirement establishes the criteria to 
be met to be rated at a specific level of performance and generally 
includes quality, quantity, timeliness, cost savings, manner of 
performance, or other factors.
    Performance standard means a normative description of a single 
level of performance within five such described levels of performance 
ranging from unacceptable performance to outstanding performance. 
Performance standards provide the benchmarks for developing performance 
requirements against which actual performance will be assessed.
    PRB means Performance Review Board, which for the purposes of this 
subpart includes a PRB established under Sec.  430.311 or an equivalent 
body, as described in Sec.  430.511.
    Progress review means a review of the senior professional's 
progress in meeting the performance requirements. A progress review is 
not a performance rating.
    Rating official means the official, generally the supervisor of the 
senior professional, who develops the initial summary rating and 
forwards it to the Performance Review Board, as the recommended rating 
of record.
    Rating of record means the final official performance rating at the 
end of an appraisal period for performance of agency-assigned duties 
over the entire period after the initial summary rating has been 
reviewed and approved by the approving official.
    Senior professional means an employee in a senior-level (SL) or 
scientific or professional position (ST) paid under 5 U.S.C. 5376.
    Senior professional performance plan means the written critical 
elements and performance requirements against which performance will be 
evaluated during the appraisal period by applying the established 
performance standards. The plan includes all critical elements, 
performance standards, and performance requirements, including any 
specific goals, targets, competencies, objectives, or other measures 
established for the senior professional.
    Strategic planning initiatives means agency strategic plans as 
required by the GPRA Modernization Act of 2010, annual performance 
plans, organizational work plans, and other related initiatives.


Sec.  430.504  Senior professional performance appraisal systems.

    (a) Each agency must develop and administer one or more performance 
appraisal systems for its senior professionals in accordance with the 
system standards established in Sec.  430.505.
    (b) Performance appraisal systems must provide for--
    (1) Identifying employees covered by the system;
    (2) Monitoring progress in accomplishing critical elements and 
performance requirements and conducting progress reviews at least 
quarterly during the appraisal period, including informing senior 
professionals on how well they are performing;
    (3) Establishing an official performance appraisal period for which 
a rating of record must be prepared;
    (4) Establishing a minimum appraisal period of at least 90 days;
    (5) Establishing criteria and procedures to address performance of 
senior professionals who are on detail, temporarily reassigned, or 
transferred as described at Sec.  430.510, and for other special 
circumstances established by the agency.


Sec.  430.505  System standards for senior professional performance 
appraisal systems.

    (a) Each agency performance appraisal system must incorporate the 
following system standards:
    (1) Use critical elements to evaluate the quality of the senior 
professional's job performance for the designated appraisal period;
    (2) Align performance requirements with agency mission and 
strategic planning initiatives;
    (3) Define performance standards for each of the summary rating 
performance levels, which also may be used for the individual elements 
or performance requirements being appraised;
    (4) Appraise each senior professional's performance at least 
annually against performance requirements based on established 
performance standards and other measures;
    (5) Derive a rating of record through a mathematical method that 
ensures the senior professional's performance aligns with level 
descriptors contained in performance standards that clearly 
differentiate levels above fully successful;
    (6) Establish five summary performance levels. Level 1 through 
Level 5 are ordered categories, with Level 1 as the lowest and Level 5 
as the highest, as follows:
    (i) An outstanding level (Level 5);
    (ii) An exceeds fully successful level (Level 4);
    (iii) A fully successful level (Level 3);
    (iv) A minimally satisfactory level (Level 2); and

[[Page 65920]]

    (v) An unacceptable level (Level 1);
    (7) Include equivalency statements in the system description for 
agency-specific terms for the five summary performance levels aligning 
them with the five performance levels required in paragraph (a)(6) of 
this section; and
    (8) Use performance appraisals as a basis to adjust pay, reward, 
retain, and develop senior professionals or make other personnel 
decisions, including removals as described in Sec.  430.512.
    (b) An agency must develop and implement a performance appraisal 
system for its senior professionals in accordance with the requirements 
of this section and applicable OPM guidance.
    (c) OPM may establish, and refine as needed, a governmentwide 
performance management system incorporating all requirements of this 
section for agencies to adopt, with limited adaptation, for performance 
appraisal of its senior professionals.
    (d) OPM may establish, and refine as needed, a standardized 
distribution of some or all rating levels for senior professionals 
which agencies must apply when rating senior professionals, except that 
senior professionals appointed under Schedules C or G in the excepted 
service may be excluded from such standardized distribution 
requirements, as determined by OPM.


Sec.  430.506  Planning and communicating performance.

    (a) Each senior professional must have a performance plan that 
describes the individual and organizational expectations for the 
appraisal period that clearly fall within the senior professional's 
area of responsibility and control.
    (b) Rating officials must develop performance plans in consultation 
with senior professionals and communicate the plans to them in writing, 
including through the use of automated systems, on or before the 
beginning of the appraisal period, or upon appointment to a new SL or 
ST position.
    (c) A senior professional performance plan must include--
    (1) Critical elements. Critical elements must reflect individual 
performance results or competencies as well as organizational 
performance priorities within each senior professional's respective 
area of responsibility and control.
    (2) Performance standards. Performance plans must include the 
performance standards describing each level of performance at which a 
senior professional's performance can be appraised. Performance 
standards describe the general expectations that must be met to be 
rated at each level of performance and provide the benchmarks for 
developing performance requirements.
    (3) Performance requirements. At a minimum, performance 
requirements must describe expected accomplishments or demonstrated 
competencies for fully successful performance by the senior 
professional. An agency may establish performance requirements 
associated with other levels of performance as well. These performance 
requirements must align with agency mission and strategic planning 
initiatives. Performance requirements must contain measures of the 
quality, quantity, timeliness, cost savings, or manner of performance, 
as appropriate, expected for the applicable level of performance.
    (d) Agencies may require a review of senior professional 
performance plans at the beginning of the appraisal period to ensure 
consistency of agency-specific performance requirements. Such reviews 
may be performed by the PRB or another body of the agency's choosing.


Sec.  430.507  Monitoring performance.

    Rating officials must monitor each senior professional's 
performance throughout the appraisal period and hold at least quarterly 
progress reviews. At a minimum, rating officials must inform senior 
professionals during the progress review about how well they are 
performing with regard to their performance plan. Rating officials must 
provide advice and assistance to senior professionals on how to improve 
their performance. Rating officials and senior professionals may also 
discuss available development opportunities for the senior 
professional.


Sec.  430.508  Appraising performance.

    (a) Agencies must establish appropriate timelines for communicating 
performance plans, conducting appraisals, and assigning and 
communicating ratings of record.
    (b) At least annually, agencies must appraise each senior 
professional's performance in writing, including through the use of 
automated systems, and assign a rating of record at the end of the 
appraisal period.
    (c) Agencies must appraise a senior professional's performance on 
the critical elements and performance requirements in the senior 
professional's performance plan.
    (d) Agencies must base appraisals of senior professional 
performance on both individual and organizational performance as it 
applies to the senior professional's area of responsibility and 
control, taking into account factors such as--
    (1) Results achieved in accordance with agency mission and 
strategic planning initiatives;
    (2) Overall quality of performance rendered by the senior 
professional;
    (3) Performance appraisal guidelines that must be based upon 
assessments of the agency's performance and are provided by the 
oversight official to senior professionals, rating and reviewing 
officials, PRB members, and approving officials at the conclusion of 
the appraisal period and before completion of the initial summary 
ratings;
    (4) Customer perspectives; and
    (5) Compliance with the merit system principles set forth under 5 
U.S.C. 2301.


Sec.  430.509  Rating performance.

    (a) For agencies employing ten or more senior professionals, when 
rating senior professional performance, each agency must use its 
agency-level PRB, as described at Sec.  430.511 to fulfill the 
requirements of centralized review under part 534, subpart E, of this 
chapter.
    (b) The rating of record or performance rating for a disabled 
veteran shall not be lowered because the veteran has been absent from 
work to seek medical treatment as provided in Executive Order 5396.
    (c) Each rating of record shall cover a specified appraisal period. 
Agencies are prohibited from carrying 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.
    (d) When a rating of record cannot be prepared at the time 
specified, the appraisal period must be extended. Once the conditions 
necessary to complete a rating of record have been met, a rating of 
record must be prepared as soon as practicable.
    (e) Senior professional performance appraisals and ratings are not 
appealable, beyond what is otherwise provided under applicable law or 
regulation.
    (f) Procedures for rating senior professionals must provide for the 
following:
    (1) Initial summary rating. The rating official must develop an 
initial summary rating of the senior professional's performance, in 
writing, including through the use of automated systems, and share that 
rating with the senior professional. The senior professional may 
respond in writing.
    (2) Higher-level review (HLR). A senior professional may ask for a 
higher-

[[Page 65921]]

level official to review the initial summary rating before the rating 
is given to the PRB. The agency must provide each senior professional 
an opportunity for review of the initial summary rating by an employee, 
or (with the consent of the senior professional) a commissioned officer 
in the uniformed services on active duty in the agency, in a higher 
level in the agency than the rating official who issued the initial 
summary rating.
    (i) A single review by an official at a higher level who did not 
participate in determining the senior professional's initial summary 
rating will satisfy this requirement. An official providing HLR may not 
change the initial summary rating but may recommend a different rating 
to the PRB. HLR may be provided by an official who is at a higher level 
in the agency than the approving official who will approve the final 
rating under paragraph (f)(4) of this section.
    (ii) When an agency cannot provide review by a higher-level 
official for a senior professional who receives an initial summary 
rating from the agency head because no such official exists in the 
agency, the agency must offer an alternative review as it determines 
appropriate, except that the review may not be provided by a member of 
the PRB or an official who participated in determining the initial 
summary rating.
    (iii) If a senior professional declines review by agency-designated 
higher-level officials, the agency may offer an alternative review but 
is not obligated to do so. The agency must document the senior 
professional's declination of the HLR opportunity provided by the 
agency before offering an alternative review.
    (iv) Copies of findings and recommendations of the HLR official or 
the official performing an alternative review under paragraph 
(f)(2)(ii) through (iii) of this section must be given to the senior 
professional, the rating official, and the PRB.
    (3) PRB review. For agencies with ten or more senior professionals, 
the agency-level PRB must receive and review the initial summary 
rating, the senior professional's response to the initial rating if 
made, and findings and recommendations of any HLR or any alternative 
review under paragraph (f)(2) of this section before making 
recommendations to the approving official, as provided in Sec.  430.511 
and consistent with the requirements in part 534, subpart E, of this 
chapter pertaining to centralized review. Centralized review is not 
required for agencies employing fewer than ten senior professionals.
    (4) Rating of record. The approving official must assign the rating 
of record of the senior professional's performance after considering 
the applicable PRB's recommendations. This rating is the official final 
rating for the appraisal period and must be communicated to the senior 
professional in writing, including through the use of automated 
systems, in accordance with the timelines developed under Sec.  
430.508(a).
    (g) A performance rating may be prepared at such other times as may 
be necessary, such as for special circumstances including, but not 
limited to, transfers and performance on details.


Sec.  430.510  Details and job changes.

    (a) When a senior professional is detailed or temporarily 
reassigned for 120 days or longer, the gaining organization must set 
performance goals and requirements for the detail or temporary 
assignment. The gaining organization must appraise the senior 
professional's performance in writing, including through the use of 
automated systems, and the rating official must consider this appraisal 
when deriving the initial summary rating.
    (b) When a senior professional is reassigned or transferred to 
another agency after completing the minimum appraisal period, the 
rating official must appraise the senior professional's performance in 
writing, including through the use of automated systems, before the 
senior professional leaves and provide this information to the senior 
professional.
    (c) The most recent rating of record and any subsequent appraisals 
must be transferred to the gaining agency or organization. The gaining 
rating official must consider the rating and appraisals when deriving 
the initial summary rating at the end of the appraisal period.


Sec.  430.511  Performance Review Boards (PRBs).

    Each agency that employs ten or more senior professionals must use 
its agency-level PRB established under Sec.  430.311, or an equivalent 
body if the agency is not subject to the SES, to make written 
recommendations to the approving official on ratings of record, 
performance awards, and pay adjustments regarding senior professionals. 
The agency-level PRB or equivalent body will be responsible for 
fulfilling all requirements of centralized review found in part 534, 
subpart E, of this chapter.


Sec.  430.512  Using performance results.

    (a) Agencies must use performance appraisals as a basis for 
adjusting pay, granting awards, retaining senior professionals, and 
making other personnel decisions. Performance appraisals must be a 
factor in assessing a senior professional's continuing development 
needs.
    (b) Agencies must provide appropriate incentives and recognition 
(including pay adjustments under subpart E of part 534 of this chapter 
and performance awards under part 451, subpart A, of this chapter) for 
excellence in performance.
    (c) A senior professional may be suspended, demoted, or removed 
from the civil service for unacceptable performance, subject to the 
provisions of 5 U.S.C. 4303, 7503, and 7513.


Sec.  430.513  Training and evaluation.

    (a) To assure effective implementation of agency performance 
appraisal systems, agencies must provide appropriate information and 
training to agency leadership, rating officials, and senior 
professionals on performance management, including planning and 
appraising performance.
    (b) Agencies must periodically evaluate the effectiveness of their 
performance appraisal system(s) and implement improvements as needed. 
Evaluations must provide for both assessment of effectiveness and 
compliance with relevant laws, OPM regulations, and OPM performance 
management policy.
    (c) Agencies must maintain all performance-related records for no 
fewer than 4 years from the date the rating of record is issued, as 
required in Sec.  293.404(a)(1) of this chapter.


Sec.  430.514  OPM review of agency systems.

    (a) Agencies must submit proposed senior professional performance 
appraisal systems to OPM for approval. Agency systems must address the 
system standards and requirements specified in this subpart.
    (b) OPM will review agency systems for compliance with the 
requirements of law, OPM regulations, and OPM performance management 
policy, including the system standards specified at Sec.  430.505.
    (c) If OPM finds that an agency system does not meet the 
requirements and intent of subchapter I of chapter 43 of title 5, 
United States Code, or of this subpart, OPM will identify the 
requirements that were not met and direct the agency to take corrective 
action, and the agency must comply.

PART 451--AWARDS

0
15. The authority citation for part 451 continues to read as follows:


[[Page 65922]]


    Authority: 5 U.S.C. 4302, 4501-4509; E.O. 11438, 33 FR 18085, 3 
CFR, 1966-1970 Comp., p. 755; E.O. 12828, 58 FR 2965, 3 CFR, 1993 
Comp., p. 569.

Subpart A--Agency Awards

0
16. Amend Sec.  451.103 by revising paragraph (c)(2) to read as 
follows:


Sec.  451.103  Agency award program(s).

* * * * *
    (c) * * *
    (2) Documenting justification for awards that are not based on a 
rating of record (as defined in Sec. Sec.  430.203 and 430.503 of this 
chapter).

0
17. Amend Sec.  451.104 by revising paragraph (a)(3) to read as 
follows:


Sec.  451.104  Awards.

    (a) * * *
    (3) Performance as reflected in the employee's most recent rating 
of record (as defined in Sec. Sec.  430.203 and 430.503 of this 
chapter), provided that the rating of record is at the fully successful 
level (or equivalent) or above, except that performance awards may be 
paid to SES members only under Sec.  534.405 of this chapter and not on 
the basis of this subpart.
* * * * *

PART 534--PAY UNDER OTHER SYSTEMS

0
18. The authority citation for part 534 is revised to read as follows:

    Authority:  5 U.S.C. 1104, 3161(d), 5304, 5307, 5351, 5352, 
5353, 5376, 5382, 5383, 5384, 5385, 5541, 5550a, 7302; 18 U.S.C. 
207.

Subpart D--Pay and Performance Awards Under the Senior Executive 
Service

0
19. Amend Sec.  534.402 by revising the definition for ``PRB'' to read 
as follows:


Sec.  534.402  Definitions.

* * * * *
    PRB means Performance Review Board, as described in Sec.  430.311 
of this chapter.
* * * * *

Subpart E--Pay for Senior-Level and Scientific or Professional 
Positions

0
20. Amend Sec.  534.503 by revising the definitions for ``Performance 
appraisal system'', ``Performance rating'', and ``Rating of record'' to 
read as follows:


Sec.  534.503  Definitions.

* * * * *
    Performance appraisal system means the framework of policies, 
practices, and procedures an agency establishes under subchapter I of 
chapter 43 of title 5, United States Code, subpart A of this part, and 
this subpart for planning, monitoring, developing, evaluating, and 
rewarding both individual and organizational performance and for using 
resulting performance information in making personnel decisions.
* * * * *
    Performance rating means the written, or otherwise recorded, 
appraisal of performance compared to the SL or ST employee's 
performance standard(s) for each critical element on which there has 
been an opportunity to perform for a minimum of 90 days. A performance 
rating may include the assignment of a summary level.
* * * * *
    Rating of record means the performance rating prepared at the end 
of an appraisal period for performance of agency-assigned duties over 
the entire period and the assignment of a summary level that has been 
reviewed and approved in accordance with Sec.  534.505(a).
* * * * *

0
21. Amend Sec.  534.505 by revising and republishing paragraph (a)(5) 
introductory text to read as follows:


Sec.  534.505  Written procedures.

    (a) * * *
    (5) The administrative and management controls that will be applied 
to assure compliance with applicable statutes, OPM regulations, the 
agency's written procedures established under this section, the 
applicable maximum rate of basic pay in Sec.  534.504(a), and, where 
applicable, the certification requirements set forth in part 430, 
subpart D, of this chapter. In an agency that employs ten or more 
senior professionals, these controls must include centralized review of 
ratings proposed under Sec.  430.509 of this chapter and pay actions 
proposed under Sec.  534.507 by a panel of individuals designated by 
the agency head to provide advice from an agency-wide perspective for 
authorized agency officials to consider before approving pay 
adjustments on whether--
* * * * *

0
22. Amend Sec.  534.507 by revising paragraphs (c)(2), (f), and (h) to 
read as follows:


Sec.  534.507  Annual increases in basic pay.

* * * * *
    (c) * * *
    (2) A performance rating that covers a period of at least 90 days 
and is assigned in accordance with subpart E of part 430 of this 
chapter and the centralized review required by Sec.  534.505(a)(5), but 
only if a rating of record is not available or does not reflect current 
performance.
* * * * *
    (f) Except as required by paragraph (g) of this section, a pay 
increase under this section may not be provided to an employee--
    (1) Who has a current rating of record below Level 3 (Fully 
Successful or equivalent), as described in Sec.  430.505(a)(6) of this 
chapter; or
    (2) Who, after receiving a rating of record at Level 3 or above, 
receives a more recent performance rating as defined at Sec.  430.503 
of this chapter that rates performance in a critical element at a level 
below Level 3 (Fully Successful).
* * * * *
    (h)(1) If the rates of basic pay under the General Schedule are 
increased under 5 U.S.C. 5303 on the date specified in paragraph (a)(1) 
of this section and the agency head decides upon a zero adjustment for 
an SL or ST employee who has a current rating of record or applicable 
performance rating at Level 3 or above, the agency must communicate the 
reasons for that decision to the employee in writing.
    (2) Paragraph (h)(1) of this section does not apply to a senior 
professional with a rate of basic pay described in Sec.  534.505(c)(1) 
unless--
    (i) The rates of basic pay for the Executive Schedule are also 
increased on the date specified in paragraph (a)(1) of this section; 
and
    (ii) The senior professional has a current rating of record or 
applicable performance rating at Level 5.
    (3) Paragraphs (h)(1) and (2) of this section may not be construed 
to require a pay increase for any senior professional employee.

PART 537--REPAYMENT OF STUDENT LOANS

0
23. The authority citation for part 537 is revised to read as follows:

    Authority:  5 U.S.C. 2301, 2302, and 5379(g). E.O. 11478, 3 CFR 
1966-1970 Comp., p. 803, unless otherwise noted; E.O. 13087, 63 FR 
30097, 3 CFR 1998 Comp., p. 191; and E.O. 13152, 65 FR 26115, 3 CFR 
2000 Comp., p. 264.


0
24. Amend Sec.  537.108 by revising paragraph (b) to read as follows:


Sec.  537.108  Loss of eligibility for student loan repayment benefits.

* * * * *
    (b) For the purpose of applying paragraph (a)(2) of this section, 
an acceptable level of performance is one that is equivalent to level 3 
(``Fully Successful'' or equivalent) or higher, as described in Sec.  
430.208(e) or

[[Page 65923]]

Sec.  430.505(a)(6) of this chapter, as applicable. An employee loses 
eligibility for student loan repayment benefits if his or her most 
recent official performance evaluation does not meet this requirement.

PART 630--ABSENCE AND LEAVE

0
25. The authority citation for part 630 continues to read as follows:

    Authority: Subparts A through E issued under 5 U.S.C. 6133(a) 
(read with 5 U.S.C. 6129), 6303(e) and (f), 6304(d)(2), 6306(b), 
6308(a) and 6311; subpart F issued under 5 U.S.C. 6305(a) and 6311 
and E.O. 11228, 30 FR 7739, 3 CFR, 1974 Comp., p. 163; subpart G 
issued under 5 U.S.C. 6305(c) and 6311; subpart H issued under 5 
U.S.C. 6133(a) (read with 5 U.S.C. 6129) and 6326(b); subpart I 
issued under 5 U.S.C. 6332, 6334(c), 6336(a)(1) and (d), and 6340; 
subpart J issued under 5 U.S.C. 6340, 6363, 6365(d), 6367(e), 
6373(a); subpart K issued under 5 U.S.C. 6391(g); subpart L issued 
under 5 U.S.C. 6383(f) and 6387; subpart M issued under Sec. 2(d), 
Pub. L. 114-75, 129 Stat. 641 (5 U.S.C. 6329 note); subpart N issued 
under 5 U.S.C. 6329a(c); subpart O issued under 5 U.S.C. 6329b(h); 
and subpart P issued under 5 U.S.C. 6329c(d).

Subpart C--Annual Leave

0
26. Amend Sec.  630.301 by revising paragraph (b)(3) to read as 
follows:


Sec.  630.301  Annual leave accrual and accumulation--Senior Executive 
Service, Senior-Level, and Scientific and Professional Employees.

* * * * *
    (b) * * *
    (3) Covered positions are subject to a performance appraisal system 
established under 5 U.S.C. chapter 43 and 5 CFR part 430, subpart B, C, 
or E or other applicable legal authority, for planning, monitoring, 
developing, evaluating, and rewarding employee performance.
* * * * *

PART 894--FEDERAL EMPLOYEES DENTAL AND VISION INSURANCE PROGRAM

0
27. The authority citation for part 894 is revised to read as follows:

    Authority:  5 U.S.C. 8962; 5 U.S.C. 8992. Subpart C also issued 
under 2 U.S.C. 2051. Sec. 894.601(b) also issued under sec. 1111, 
Pub. L. 116-92, 133 Stat. 1600 (5 U.S.C. 8956 note).

Subpart C--Eligibility

0
28. Amend Sec.  894.302 by revising paragraph (k)(1) to read as 
follows:


Sec.  894.302  What is an excluded position?

* * * * *
    (k) * * *
    (1) An employee appointed to perform ``part-time career 
employment,'' as defined in 5 U.S.C. 3401(2) and 5 CFR part 340, 
subpart B; or
* * * * *

PART 1330--HUMAN RESOURCES MANAGEMENT

0
29. The authority citation for part 1330 continues to read as follows:

    Authority:  5 U.S.C. 5307(d).

Subpart D--Performance Appraisal Certification for Pay Purposes

0
30. Amend Sec.  1330.402 by revising the definitions of ``Appraisal 
system'' and ``Performance expectations'' to read as follows:


Sec.  1330.402  Definitions.

* * * * *
    Appraisal system means the policies, practices, and procedures an 
agency establishes under 5 U.S.C. chapter 43 and 5 CFR part 430, 
subparts C and E, or other applicable legal authority, for planning, 
monitoring, developing, evaluating, and rewarding employee performance. 
This includes performance management systems as defined at Sec.  
430.303 and performance appraisal systems as defined at Sec.  430.503.
* * * * *
    Performance expectations means critical elements and performance 
requirements that constitute the senior executive performance plans (as 
defined in 5 CFR 430.303) established for senior executives, the 
critical elements and performance requirements that constitute the 
senior professional performance plans (as defined in 5 CFR 430.503) 
established for senior professionals, or other appropriate means 
authorized under performance appraisal systems not covered by 5 U.S.C. 
chapter 43 for communicating what a senior employee is expected to do 
and the manner in which he/she is expected to do it, and may include 
contribution to agency performance, where appropriate.
* * * * *

0
31. Amend Sec.  1330.403 by revising paragraphs (b) through (d) to read 
as follows:


Sec.  1330.403  System certification.

* * * * *
    (b) Except as provided in paragraph (c) of this section, agencies 
subject to 5 U.S.C. chapter 43 and 5 CFR part 430 seeking certification 
of their appraisal systems must submit systems that have been approved 
by OPM under 5 CFR 430.314 or 430.514, as applicable. In some agencies, 
the performance appraisal system(s) covers employees in many 
organizations and/or components, and their ability to meet the 
certification criteria in Sec.  1330.404 may vary significantly. In 
such cases, an agency may establish and/or submit separate performance 
appraisal systems for each of these distinct organizations and/or 
components to ensure timely certification of those performance 
appraisal system(s) that meet the criteria. New appraisal systems 
established under 5 CFR part 430, subpart C or E, as applicable based 
on the employees covered, must be approved by OPM.
    (c) When an agency establishes a new performance appraisal system 
for the purpose of seeking certification under this subpart, the agency 
may submit that system for certification even if it has not yet been 
approved by OPM under 5 CFR 430.314 or 430.514, as applicable. OPM will 
certify, with OMB concurrence, only those systems that OPM determines 
meet the approval requirements of 5 CFR part 430, subpart C or E, as 
applicable.
    (d) An agency must establish an appraisal system(s), as defined in 
Sec.  1330.402, for its senior professionals that meets the 
requirements of 5 CFR part 430, subpart E, and is separate from the 
system(s) established to cover its SES members under 5 CFR part 430, 
subpart C. For the purpose of certification under this subpart, such 
senior professional appraisal system(s) must meet the certification 
criteria set forth in Sec.  1330.404.
* * * * *

0
32. Amend Sec.  1330.404 by revising paragraphs (a)(2), (5), (7), and 
(8) to read as follows:


Sec.  1330.404  Certification criteria.

    (a) * * *
    (2) Consultation, so that the performance expectations for senior 
employees meet the requirements of 5 CFR part 430, subparts C and E, as 
applicable, and/or other applicable legal authority; are developed with 
the input and involvement of the individual senior employees who are 
covered thereby; and are communicated to them at the beginning of the 
applicable appraisal period, and/or at appropriate times thereafter;
* * * * *
    (5) Appropriate assessments of the agency's performance--overall 
and with respect to each of its particular missions, components, 
programs, policy areas, and support functions--such as reports of the 
agency's GPRA goals, annual performance plans and targets,

[[Page 65924]]

program performance measures, and other appropriate indicators, as well 
as evaluation guidelines based, in part, upon those assessments, that 
are communicated by the agency head, or an individual specifically 
designated by the agency head for such purpose, to senior employees, 
appropriate senior employee rating and reviewing officials, and PRB 
members. These assessments and guidelines are to be provided at the 
conclusion of the appraisal period but before individual senior 
employee performance ratings are recommended, so that they may serve as 
a basis for individual performance evaluations, as appropriate. The 
guidance provided must conform to 5 CFR part 430, subpart C or E, as 
applicable;
* * * * *
    (7) Accountability, so that final agency head decisions and any PRB 
recommendations regarding senior employee ratings consistent with 5 CFR 
part 430, subparts C and E, individually and overall, appropriately 
reflect the employee's performance expectations, relevant program 
performance measures, and such other relevant factors as the PRB may 
find appropriate; in the case of supervisory senior employees, ratings 
must reflect the degree to which performance standards, requirements, 
or expectations for individual subordinate employees clearly link to 
organizational mission, GPRA strategic goals, or other program or 
policy objectives and take into account the degree of rigor in the 
appraisal of their subordinate employees;
    (8) Performance differentiation, so that the system(s) includes at 
least one summary level of performance above fully successful, 
including a summary level that reflects outstanding performance, as 
defined in Sec.  1330.402, and so that its annual administration 
results in meaningful distinctions based on relative performance that 
take into account the assessment of the agency's performance against 
relevant program performance measures, as described in paragraph (a)(6) 
of this section, employee performance expectations, and such other 
relevant factors as may be appropriate. For equivalent systems that do 
not use summary ratings, the appraisal system must provide for clear 
differentiation of performance at the outstanding level; and
* * * * *

0
33. Amend Sec.  1330.405 by revising paragraphs (b)(1)(iii)(B) and (C) 
and (h)(2) to read as follows:


Sec.  1330.405  Procedures for certifying agency appraisal systems.

* * * * *
    (b) * * *
    (1) * * *
    (iii) * * *
    (B) For the agency's senior professionals covered by 5 CFR part 
430, subpart E, five summary levels--an outstanding level, a fully 
successful level, a level between outstanding and fully successful, an 
unacceptable level, and a level between fully successful and 
unacceptable; and
    (C) For agencies not subject to 5 CFR part 430, subparts C and E, a 
summary rating level that reflects outstanding performance or a 
methodology that clearly differentiates outstanding performance, as 
defined in Sec.  1330.402;
* * * * *
    (h) * * *
    (2) An agency's system certification is automatically suspended 
when OPM withdraws performance appraisal system approval or mandates 
corrective action because of misapplication of the system as authorized 
under 5 CFR 430.314(c), 430.514(c), and 1330.403(e).
* * * * *

Office of Personnel Management.
Scott Kupor,
Director.

Office of Management and Budget.
Russell Vought,
Director.
[FR Doc. 2026-21316 Filed 10-16-26; 8:45 am]
BILLING CODE 6325-39-P


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