Short title

This Act may be cited as the

Federal Workforce Performance Appraisal and Management Improvement Act of 2007

Performance appraisal systems

Subchapter 1 of chapter 43 of title 5, United States Code, is amended— (1)by amending section 4302 to read as follows:

4302.

Establishment of performance appraisal systems

(a)(1)Subject to paragraphs (2) and (3), each agency shall establish 1 or more performance appraisal systems to promote high performance. (2)In designing and applying a performance appraisal system established under this subsection, each agency shall— (A)link the system with the strategic goals and annual performance plan of the agency; (B)involve employees in the development of their performance standards; (C)provide each employee with a written performance appraisal annually; (D)make meaningful distinctions in performance; and (E)use the results of performance appraisals as a basis for training, rewarding, compensating, reassigning, promoting, reducing in grade, retaining, and removing employees. (3)Consistent with section 4304, each performance appraisal system established under this subsection shall be developed with appropriate technical assistance from the Office of Personnel Management and shall be reviewed before implementation and from time to time thereafter by the Director of the Office to determine whether the system meets the requirements of this subchapter. The agency shall promptly take any corrective action directed by the Director of the Office at any time under section 4304 (b)(3). (b)Under regulations which the Director of the Office of Personnel Management shall prescribe, each performance appraisal system shall provide for— (1)holding supervisors and managers accountable in their performance appraisal for effectively managing the performance of employees, which includes— (A)assessing performance; (B)providing ongoing feedback and preparing written performance appraisals; (C)addressing poor performance; and (D)promoting and rewarding excellent performance; (2)establishing performance standards related to relevant assigned tasks for each employee or position under the system which will permit— (A)the accurate evaluation of performance on the basis of objective criteria, to the maximum extent feasible; and (B)making meaningful distinctions in performance; (3)communicating to each employee at the beginning of each appraisal period the performance standards and the critical elements of the employee's position; (4)evaluating each employee during the appraisal period on such standards; (5)assisting employees in improving unacceptable performance; (6)reassigning, reducing in grade, or removing employees who continue to have unacceptable performance, but only after an opportunity to demonstrate acceptable performance; (7)establishing multiple levels of summary performance ratings which provide for making meaningful distinctions in performance, including at least— (A)a summary level of fully successful (or equivalent); (B)a summary level of unacceptable; and (C)a summary level above fully successful; and (8)recognizing and rewarding employees whose performance so warrants.

; and

(2)by amending section 4304 to read as follows:

4304.

Responsibilities of the Office of Personnel Management

(a)The Office of Personnel Management shall make technical assistance available to agencies in the development of performance appraisal systems. (b)(1)The Director of the Office shall review each performance appraisal system developed by any agency under this subchapter prior to its implementation and determine whether the performance appraisal system as designed meets the requirements of this subchapter. (2)The Director of the Office shall— (A)review agency performance appraisal systems developed under this subchapter from time to time after their implementation to determine the extent to which the application of any such system meets the requirements of this subchapter; and (B)report to the President and Congress any finding that an agency has failed to meet those requirements. (3)If the Director of the Office determines that a system does not meet the requirements of this subchapter (including regulations prescribed under section 4305), the Director of the Office shall direct the agency to implement an appropriate system or to correct operations under the system, and any such agency shall take any action so required.

Mandatory training programs for supervisors

(a)

In general

Section 4121 of title 5, United States Code, is amended to read as follows:

4121.

Specific training programs

(a)In this section, the term supervisor means— (1)a supervisor as defined under section 7103(a)(10); and (2)any other employee as the Director of the Office may by regulation prescribe. (b)Under operating standards promulgated by, and in consultation with, the Director of the Office of Personnel Management, the head of each agency shall establish— (1)a comprehensive management succession program to provide training to employees to develop managers for the agency; and (2)a program to provide training to supervisors on actions, options, and strategies a supervisor may use in— (A)communicating performance expectations and conducting employee performance appraisals; (B)mentoring employees and improving employee performance and productivity; (C)dealing with employees whose performance is unacceptable; and (D)otherwise carrying out the duties and responsibilities of a supervisor. (c)(1)Not later than 1 year after the date on which an individual is appointed to the position of supervisor, and every 5 years thereafter, that individual shall be required to complete the program established under subsection (b)(2). (2)Each program established under subsection (b)(2) shall include provisions under which credit may be given for periods of similar training previously completed. (d)The Director of the Office of Personnel Management shall prescribe regulations to carry out this section.

(b)

Effective date and application

(1)

In General

The amendments made by this section shall take effect as provided under section 6 and apply to— (A)each individual appointed to the position of a supervisor, as defined under section 4121(a) of title 5, United States Code, (as added by subsection (a) of this section) on or after that effective date; and (B)each individual who is employed in the position of a supervisor on that effective date as provided under paragraph (2). (2)

Supervisors on effective date

Each individual who is employed in the position of a supervisor on the effective date of this section shall be required to— (A)complete the program established under section 4121(b)(2) of title 5, United States Code (as added by subsection (a) of this section), not later than 3 years after the effective date of this section; and (B)complete that program every 5 years thereafter in accordance with section 4121(c) of such title.

Pay rates and systems

Chapter 53 of title 5, United States Code, is amended— (1)in section 5303, by adding at the end the following:

(h)(1)An employee covered under subchapter III whose summary rating of performance for the most recently completed appraisal period is below the fully successful level, as defined by the Director of the Office of Personnel Management, may not receive an increase in the rate of basic pay of that employee as the result of an adjustment under this section. The Director shall prescribe such rules as may be necessary to administer this subsection, including rules regarding the treatment of an employee whose rate of basic pay falls below the minimum rate of the applicable grade (or between steps of a grade) and the treatment of an employee whose performance subsequently improves. (2)When a determination is made that an employee covered under subchapter III will not receive an increase in the rate of basic pay of that employee because the employee’s summary rating of performance for the most recently completed appraisal period is below the fully successful level, the employee is entitled to prompt written notice of that determination and an opportunity for reconsideration of the determination within the agency, as specified in the procedures prescribed by the Director of the Office of Personnel Management under section 5335(c). If the determination is affirmed on reconsideration, the employee is entitled to appeal to the Merit Systems Protection Board under the same terms and conditions as specified in such section.

;

(2)in section 5304, by amending subsection (i) to read as follows:

(i)The Director of the Office of Personnel Management shall prescribe regulations, consistent with this section, governing the payment of comparability payments to employees. The regulations shall provide that, at the time of an increase in a comparability payment, the rate of basic pay of an employee covered under subchapter III, or any other pay system designated by the Director, whose summary rating of performance for the most recently completed appraisal period is below the fully successful level, as defined by the Director, shall be reduced by an amount that results in retaining the employee’s total rate of pay under this section and sections 5303 and 5304a, as in effect immediately before any increase under such sections. Such a reduction in an employee’s rate of basic pay shall not be considered a reduction in pay for the purpose of applying the adverse action procedures under section 7512.

; and

(3)in section 5305, by amending subsection (f) to read as follows:

(f)(1)When a schedule of special rates established under this section is adjusted under subsection (d), the special rate of an employee shall be adjusted in accordance with conversion rules prescribed by the Director of the Office of Personnel Management (or by such other agency as the President may designate under the last sentence of subsection (a)(1)). (2)The conversion rules prescribed under paragraph (1), shall provide that a covered employee whose summary rating of performance for the most recently completed appraisal period is below the fully successful level, as defined by the Director of the Office of Personnel Management, may not receive an increase in the special rate of that employee as the result of an adjustment under subsection (d). The Director shall prescribe such rules as may be necessary to administer this paragraph, including rules regarding the treatment of an employee whose rate of basic pay falls below the minimum rate of the applicable grade (or between pay rates or steps of a grade) and the treatment of an employee whose performance subsequently improves. The rules may provide for reducing an employee's rate of basic pay to the extent necessary to prevent any increase in the employee's special rate. Such a reduction in an employee's rate of basic pay shall not be considered a reduction in pay for the purpose of applying the adverse action procedures in section 7512. (3)When a determination is made that a covered employee will not receive an increase in the special rate of that employee under this subsection because the employee’s summary rating of performance for the most recently completed appraisal period is below the fully successful level, the employee is entitled to prompt written notice of that determination and an opportunity for reconsideration of the determination within the agency, as specified in the procedures prescribed by the Director under section 5335(c). If the determination is affirmed on reconsideration, the employee is entitled to appeal to the Merit Systems Protection Board under the same terms and conditions as specified in such section.

;

(4)in section 5335— (A)in subsection (a) by amending subparagraph (B) to read as follows:

(B)the employee’s summary rating of performance for the most recently completed appraisal period is at least at the fully successful level, as defined by the Director of the Office of Personnel Management.

; and

(B)by amending subsection (c) to read as follows:

(c)(1)When an employee’s summary rating of performance for the most recently completed appraisal period is below the fully successful level, the pay of that employee may not be increased under this section. Such an employee is entitled to prompt written notice of the determination not to increase the pay of that employee and an opportunity for reconsideration of the determination within the agency under uniform procedures prescribed by the Director of the Office of Personnel Management. If the determination is affirmed on reconsideration, the employee is entitled to appeal to the Merit Systems Protection Board. If the reconsideration or appeal results in a reversal of the earlier determination, the new determination supersedes the earlier determination and is deemed to have been made as of the date of the earlier determination. The authority of the Director to prescribe procedures and the entitlement of the employee to appeal to the Board do not apply to a determination made by the Librarian of Congress. (2)Notwithstanding any other provision of law, an employee may grieve or appeal the first pay determination under this subsection or under section 5303(h), 5305(f), or 5363(b)(2)(C) that is based on the employee's most recent summary rating of performance. An employee may not grieve or appeal any subsequent pay determination made that is based on the same summary rating of performance

; and

(5)by amending section 5338 to read as follows:

5338.

Regulations

The Director of the Office of Personnel Management may prescribe regulations necessary for the administration of this subchapter. Such regulations shall address how paysetting rules apply to an employee whose rate of basic pay is not equal to 1 of the scheduled step rates as a result of a determination not to increase the rate of basic pay of that employee under section 5303(h) or 5305(f) or to reduce the rate of basic pay of that employee under section 5304(i) or 5305(f).

;

(6)in section 5343 (relating to prevailing rate wage systems)— (A)in subsection (e)— (i)by amending paragraph (2) to read as follows:

(2)A prevailing rate employee under a regular wage schedule whose summary rating of performance for the most recently completed appraisal period is at least at the fully successful level, as defined by the Director of the Office of Personnel Management, shall advance automatically to the next higher step within the grade at the beginning of the first applicable pay period following the completion by that employee of— (A)26 calendar weeks of service in step 1; (B)78 calendar weeks of service in step 2; and (C)104 calendar weeks of service in each of steps 3 and 4.

;

(ii)by amending paragraph (4) to read as follows:

(4)Supervisory wage schedules and special wage schedules authorized under subsection (c)(3) may have single or multiple rates or steps according to prevailing practices in the industry on which the schedule is based. A prevailing rate employee under a supervisory or special wage schedule with multiple rates or steps whose summary rating of performance for the most recently completed appraisal period is at least at the fully successful level, as defined by the Director of the Office of Personnel Management, shall advance automatically to the next higher step within the grade at the beginning of the first applicable pay period following the completion by that employee of any required waiting period.

; and

(iii)by adding at the end the following:

(5)(A)When a summary rating of performance of an employee covered under this subchapter for the most recently completed appraisal period is below the fully successful level, as defined by the Director of the Office of Personnel Management, the employee may not be advanced to the next higher step within the grade under paragraph (2) or (4). Such an employee is entitled to prompt written notice of the determination not to increase the pay of that employee and an opportunity for reconsideration of the determination within the agency under uniform procedures prescribed by the Director of the Office of Personnel Management. If the determination is affirmed on reconsideration, the employee is entitled to appeal to the Merit Systems Protection Board. If the reconsideration or appeal results in a reversal of the earlier determination, the new determination supersedes the earlier determination and is deemed to have been made as of the date of the earlier determination. (B)Notwithstanding any other provision of law, an employee may grieve or appeal the first pay determination under this paragraph, subsection (g), or section 5363(b)(2)(C) when such determinations are made based on the same summary rating of performance. An employee may not grieve or appeal any subsequent pay determination made that is based on the same summary rating of performance.

; and

(B)by adding at the end the following:

(g)(1)An employee covered under this subchapter whose summary rating of performance for the most recently completed appraisal period is below the fully successful level, as defined by the Director of the Office of Personnel Management, may not receive an increase in the rate of basic pay of that employee as the result of an adjustment in any wage schedule established under this subchapter. The Director may prescribe such rules as may be necessary to administer this subsection, including rules regarding the treatment of an employee whose rate of basic pay falls below the minimum rate of the applicable grade (or between steps of a grade) and the treatment of an employee whose performance subsequently improves. (2)When a determination is made that a covered employee will not receive an increase in the rate of basic pay of that employee at the time of an adjustment in a wage schedule because the employee’s summary rating of performance for the most recently completed appraisal period is below the fully successful level, the employee is entitled to prompt written notice of that determination and an opportunity for reconsideration of the determination within the agency, as specified in the procedures prescribed by the Director of the Office of Personnel Management under subsection (e)(5). If the determination is affirmed on reconsideration, the employee is entitled to appeal to the Merit Systems Protection Board under the same terms and conditions as specified under subsection (e)(5).

;

(7)in section 5363(b)(2) (relating to pay retention)— (A)in subparagraph (B) by striking A rate and inserting Except as provided in subparagraph (C), a rate; and (B)by adding at the end the following:

(C)(i)An employee’s retained rate may not be increased under subparagraph (B) if the employee’s summary rating of performance for the most recently completed appraisal period is below the fully successful level, as defined by the Director of the Office of Personnel Management. The Director shall prescribe such rules as may be necessary to administer this subparagraph, including rules regarding the treatment of an employee whose performance subsequently improves. (ii)When a determination is made that an employee will not receive an increase in the retained rate of that employee because the employee’s summary rating of performance for the most recently completed appraisal period is below the fully successful level, the employee is entitled to prompt written notice of that determination and an opportunity for reconsideration of the determination within the agency, as specified in the procedures prescribed by the Director of the Office of Personnel Management under section 5335(c). If the determination is affirmed on reconsideration, the employee is entitled to appeal to the Merit Systems Protection Board under the same terms and conditions as specified under section 5335(c).

;

(8)in section 5376(b) (relating to pay for certain senior-level positions)— (A)in paragraph (2), by striking Subject to paragraph (1) and inserting Subject to paragraphs (1) and (3); and (B)by adding at the end the following:

(3)Notwithstanding any other provision of this section, an employee covered under this section whose summary rating of performance for the most recently completed appraisal period is below the fully successful level, as defined by the Director of the Office of Personnel Management, may not receive an increase in the rate of basic pay of that employee. The Director shall prescribe such rules as may be necessary to administer this paragraph, including rules regarding the treatment of an employee whose rate of basic pay falls below the otherwise applicable minimum rate prescribed by paragraph (1)(A) and the treatment of an employee whose performance subsequently improves.

;

(9)in section 5382(a), in the first sentence, by inserting “(except as provided by section 5383(a))” after for the Senior Executive Service, and; and (10)in section 5383, by amending subsection (a) to read as follows:

(a)Each appointing authority shall determine, in accordance with criteria established by the Director of the Office of Personnel Management, which of the rates within a range established under section 5382 shall be paid to each senior executive under such appointing authority. Such criteria shall provide that a member of the Senior Executive Service may not receive an increase in the rate of basic pay of that member if such member’s summary rating of performance for the most recently completed appraisal period is below the fully successful level, as defined by the Director. The Director shall prescribe such rules as may be necessary to administer this subsection, including rules regarding the treatment of a member whose rate of basic pay falls below the otherwise applicable minimum rate prescribed by section 5382(a) and the treatment of a member whose performance subsequently improves.

Senior executive service placement in other personnel systems

Section 3594(c)(2) of title 5, United States Code, is amended to read as follows:

(2)(A)Except as provided in subparagraph (B) of this paragraph, an employee who is receiving basic pay under paragraph (1)(B)(ii) or (iii) is entitled to have the rate of basic pay of the employee increased by 50 percent of the amount of each increase in the maximum rate of basic pay for the grade of the position in which the employee is placed under subsection (a) or (b) until the rate is equal to the rate in effect under paragraph (1)(B)(i) for the position in which the employee is placed. (B)A rate of basic pay established under paragraph (1)(B)(ii) or (iii) may not be increased under subparagraph (A) if the employee’s summary rating of performance for the most recently completed appraisal period is below the fully successful level, as defined by the Director of the Office of Personnel Management. The Director shall prescribe such rules as may be necessary to administer this subparagraph, including rules regarding the treatment of an employee whose performance subsequently improves.

Effective dates and implementation

(a)

Sections 2 and 3

(1)

Effective date

The amendments made by sections 2 and 3 shall take effect on the earlier of— (A)180 days after the date of enactment of this Act; or (B)the effective date of implementing regulations prescribed by the Director of the Office of Personnel Management. (2)

Submissions

(A)

Performance appraisal systems

Not later than July 1, 2007, each agency covered by subchapter I of chapter 43 of title 5, United States Code, shall submit to the Director of the Office of Personnel Management each performance appraisal system established under that subchapter so that the Director may determine whether the system meets the requirements of the subchapter. Each submission under this paragraph shall include all information the Director requires in order to make the determination. (B)

Report to congress

Not later than November 1, 2007, the Director of the Office of Personnel Management shall submit a report regarding the Director's review under section 4304(b)(1) of title 5, United States Code, as amended by section 2 of this Act, to the President and Congress. (b)

Sections 4 and 5

The amendments made by sections 4 and 5 shall apply with respect to any employee beginning on the first day of the first pay period following the completion of 52 weeks after the date on which the first annual adjustments in rates of basic pay under section 5303 of title 5, United States Code, occur following the date of enactment of this Act.