[Federal Register Volume 63, Number 192 (Monday, October 5, 1998)]
[Rules and Regulations]
[Pages 53275-53276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26623]



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 Rules and Regulations
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  Federal Register / Vol. 63, No. 192 / Monday, October 5, 1998 / Rules 
and Regulations  

[[Page 53275]]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 430 and 534

RIN 3206-AH77


Performance Ratings

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations to codify longstanding policy regarding retroactive, 
assumed, and carry-over ratings of record. These regulations amend the 
performance management regulations to explicitly specify that ratings 
of record are final upon issuance unless challenged by the employee, 
and that retroactive, assumed, and carry-over ratings of record are 
prohibited.
DATES: Effective date: November 4, 1998.

FOR FURTHER INFORMATION CONTACT: Barbara Colchao, (202) 606-2720, FAX 
(202) 606-2395, email: [email protected].

SUPPLEMENTARY INFORMATION: On April 20, 1998, the Office of Personnel 
Management (OPM) issued proposed regulations to codify OPM's 
longstanding interpretation of the law regarding the finality of a 
rating of record and the prohibition of retroactive, carry-over, or 
assumed ratings of record (63 FR 19411). The proposed regulations 
addressed four issues: (1) A prohibition against an agency unilaterally 
changing a rating that has been issued as a final rating of record to 
an employee; (2) a prohibition against an agency going back to provide 
a rating of record for a past appraisal period where none was given; 
(3) a prohibition against an agency issuing an employee an ``assumed'' 
rating of record that does not reflect an appraisal of actual 
performance; and (4) a prohibition against ``carrying over'' a previous 
rating of record to cover more than one appraisal period.

Comments Received

    We received comments from four agencies and one union. These 
comments, along with changes made to the proposed regulations, are 
summarized below.
Comment Summary: One commenter said that inasmuch as these provisions 
are longstanding policy it is good to see them finally in regulation. 
On the other hand, another commenter questioned why this regulation is 
needed and felt the matter should be left to agency discretion and 
interpretation.
    Response: For a long time, OPM received periodic inquiries 
regarding these issues and the number of inquiries has been increasing, 
especially as agencies have been developing new performance management 
programs to encourage high performance organizations, and to conform to 
the requirements of the Government Performance and Results Act. Several 
agencies had suggested that these policies be codified in regulation, 
in order to provide, and ensure application of, this information in a 
more uniform and consistent manner. OPM concurs with this opinion.

    Change: No change.
    Comment Summary: One commenter asked whether the provision at 
Sec. 430.208(i)(2) would apply in those situations where an agency 
issues a rating of record to cover a previously unrated period of time 
in compliance with the settlement of a grievance procedure. Similarly, 
another commenter asked whether this provision would cover settlement 
agreements reached through alternative dispute resolution processes.
    Response: The intent in this section of the regulation is to 
provide for corrective action when ordered by a third party or as part 
of a bona fide settlement of a grievance, complaint, or other formal 
proceeding permitted by law. Therefore, if, as part of a grievance 
procedure, the decision or settlement agreement requires that a rating 
of record be provided where none had been given before, and the agency 
is able to do so, this would be considered to have been a change 
ordered by an appropriate authority as the result of a formal 
proceeding for purposes of complying with Sec. 430.208(i)(2). Likewise, 
a changed rating of record could result from a bona fide settlement 
through an agency's alternative dispute resolution process.

    Change: The language at Sec. 430.208(i)(2) has been revised.
    Comment Summary: Three commenters stated that by using the issuance 
of a new performance plan following a completed appraisal period as the 
event that would cause any subsequent ratings of record to be 
considered retroactive, the regulation sets up situations where it 
would be impossible for their organizations to issue ratings of record.
    Response. This certainly was not the intent behind this regulation. 
OPM considered setting a 3- to 6-month time frame after the end of the 
appraisal period for completing performance appraisals. However, in the 
spirit of decentralization, a decision was made not to set a specific, 
Governmentwide time frame within which ratings of record must be 
issued. Rather, agencies may establish and use such time frames or use 
the issuance of a subsequent rating of record as the boundary that 
would cause a rating of record, which covers an earlier appraisal 
period where no rating of record originally had been given, to be 
considered retroactive.
    Individual agencies and organizations must determine whether they 
need a policy that clearly establishes when it is too late to provide a 
rating of record for an appraisal period that has ended. Otherwise, the 
issuance of a subsequent rating of record will be considered to clearly 
indicate that any former appraisal period(s) not included within the 
scope of this single rating of record have been allowed to pass without 
the issuance of a rating of record. The regulations prohibit going 
back, after the fact, and creating ratings of record for these previous 
appraisal periods, unless so ordered by a third party under the 
provisions of Sec. 430.208(i)(2).

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

Related Issue

    In two separate discussions with agency representatives who were 
not commenting on the proposed regulations, an issue arose that is 
related to the regulation prohibiting carry over ratings of record. The 
discussions were to clarify that current agency policies

[[Page 53276]]

that permit using a previous rating of record for a subsequent 
appraisal period only after evaluating the employee's performance and 
confirming that it continues to be the same would not violate the 
proposed regulation. The regulation prohibits using a previous rating 
of record as the actual rating of record for a subsequent appraisal 
period without evaluating the employee's performance for that 
subsequent appraisal period. Since an actual evaluation of the 
employee's performance during the current appraisal period is required 
prior to ``revalidating'' or ``recertifying'' the last rating of record 
as the applicable rating of record for the current appraisal period, it 
does not violate the regulation. The language at Sec. 430.208(h) has 
been revised to clarify this.
    No comments were received regarding the technical correction, and 
these regulations become final as proposed.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
apply only to Federal agencies and employees.

List of Subjects

5 CFR Part 430

    Decorations, Medals, Awards, Government employees.

5 CFR Part 534

    Government employees, Hospitals, Students, Wages.

Office of Personnel Management.
Janice R. Lachance,
Director.

    Accordingly, OPM is amending parts 430 and 534 of title 5, Code of 
Federal Regulations, as follows:

PART 430--PERFORMANCE MANAGEMENT

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

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

    2. In Sec. 430.208, paragraphs (a)(1), (a)(2), (a)(3) and (i) are 
added; paragraph (h) is redesignated as paragraph (j) and a new 
paragraph (h) is added to read as follows:


Sec. 430.208  Rating performance.

    (a) * * *
    (1) A rating of record shall be based only on the evaluation of 
actual job performance for the designated appraisal period.
    (2) An agency shall not issue a rating of record that assumes a 
level of performance by an employee without an actual evaluation of 
that employee's performance.
    (3) Except as provided in Sec. 430.208(i), a rating of record is 
final when it is issued to an employee with all appropriate reviews and 
signatures.
* * * * *
    (h) Each rating of record shall cover a specified appraisal period. 
Agencies shall not carry over a rating of record prepared for a 
previous appraisal period as the rating of record for a subsequent 
appraisal period(s) without an actual evaluation of the employee's 
performance during the subsequent appraisal period.
    (i) When either a regular appraisal period or an extended appraisal 
period ends and any agency-established deadline for providing ratings 
of record passes or a subsequent rating of record is issued, an agency 
shall not produce or change retroactively a rating of record that 
covers that earlier appraisal period except that a rating of record may 
be changed--
    (1) Within 60 days of issuance based upon an informal request by 
the employee;
    (2) As a result of a grievance, complaint, or other formal 
proceeding permitted by law or regulation that results in a final 
determination by appropriate authority that the rating of record must 
be changed or as part of a bona fide settlement of a formal proceeding; 
or
    (3) Where the agency determines that a rating of record was 
incorrectly recorded or calculated.

PART 534--PAY UNDER OTHER SYSTEMS

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

    Authority: 5 U.S.C. 1104, 5307, 5351, 5352, 5353, 5376, 5383, 
5384, 5385, 5541, and 5550a.

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


Sec. 534.505  Pay related matters.

* * * * *
    (b) Performance awards. Performance awards may be paid under 5 
U.S.C. chapter 45 and Sec. 451.104(a)(3) of this chapter.

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