[Federal Register Volume 90, Number 176 (Monday, September 15, 2025)]
[Rules and Regulations]
[Pages 44291-44299]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-17788]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 90, No. 176 / Monday, September 15, 2025 /
Rules and Regulations
[[Page 44291]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 430
[Docket ID: OPM-2025-0006]
RIN 3206-AO81
Assuring Responsive and Accountable Federal Executive Management
AGENCY: Office of Personnel Management.
ACTION: Final rule.
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SUMMARY: The Office of Personnel Management (OPM) is issuing this final
rule to remove the prohibition of a forced distribution of performance
rating levels within the Senior Executive Service (SES) as well as
eliminate diversity, equity, and inclusion (DEI) language within SES
performance management regulations. Governmentwide SES ratings data
have consistently shown that most SES receive the highest rating levels
(i.e., Levels 4 and 5) despite documented reports of SES failings.
Allowing agencies to limit the highest SES rating levels will increase
rigor in SES appraisal and lead to a more normalized distribution of
SES ratings across the Federal Government.
DATES: Effective October 15, 2025.
FOR FURTHER INFORMATION CONTACT: Noah Peters, Senior Advisor to the
Director, 202-606-8046 or by email at [email protected].
SUPPLEMENTARY INFORMATION:
Background
The Senior Executive Service (SES), established by the Civil
Service Reform Act (CSRA) of 1978, was designed to form a corps of top-
level Federal executives who provide leadership and continuity between
political appointees and career civil servants. The SES operates under
a unified personnel system with standardized executive qualifications
and provides agencies flexibility in managing executive resources, all
while preserving the public interest.
In 2004, the SES transitioned to a pay-for-performance system under
Section 1125 of Public Law 108-136 (November 24, 2003). This change
replaced the prior six-level pay system with an open-range structure
tied to individual performance. Automatic pay increases were
eliminated, and compensation became contingent upon rigorous
performance evaluations. Agencies had to obtain certification of their
appraisal systems from the Office of Personnel Management (OPM) and the
Office of Management and Budget (OMB) to exceed the standard SES pay
cap of level III of the Executive Schedule. The intent of the pay-for-
performance system is to attract top talent, reward high performers,
and improve accountability.
SES performance is assessed annually based on individual and
organizational outcomes, as specified in 5 CFR part 430, subpart C.
Ratings range from Level 1 ``Unsatisfactory'' to Level 5
``Outstanding.'' In 2012, OPM issued a model SES performance appraisal
system referred to as the ``Basic SES Performance Appraisal System,''
\1\ which created a consistent and uniform framework to communicate
expectations and evaluate the performance of SES members across
agencies. The Basic SES Performance Appraisal System was later refined
in 2016 following a 2015 Government Accountability Office (GAO) report
\2\ and OPM updates to SES performance management regulations.
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\1\ OPM, ``Senior Executive Service Performance Appraisal
System,'' (January 4, 2012), available at https://www.opm.gov/chcoc/transmittals/2012/senior-executive-service-performance-appraisal-system_508.pdf.
\2\ Government Accountability Office, ``OPM Needs to Do More to
Ensure Meaningful Distinctions Are Made in SES Ratings and
Performance Awards, GAO Report to Congressional Requesters''
(January 2015), available at https://www.gao.gov/assets/gao-15-189.pdf.
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Despite OPM's efforts to drive uniformity and consistency in the
SES appraisal system, agencies have continuously struggled to ensure
meaningful distinctions are made in SES performance ratings. According
to the 2015 GAO report, about 85% of SES members received ratings of
``Outstanding'' or ``Exceeds Fully Successful'' from 2010 to 2013 while
only 0.1% of senior executives in Chief Financial Officers Act agencies
(see 31 U.S.C. 901) were rated at the lowest rating level. Similar
patterns have continued; for the 2023 performance cycle, approximately
96% of SES members received top ratings (i.e., Levels 4 and 5), while
fewer than 0.5% were rated below ``Fully Successful.'' \3\
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\3\ SES ratings data submitted by individual agencies for SES
performance appraisal system certification purposes. OPM manually
compiled individual agency data to produce the fiscal year 23 SES
ratings distribution data.
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This inflation in ratings undermines the SES appraisal system's
integrity and the statutory requirement at 5 U.S.C. 4312(a)(3) to
encourage excellence in performance. For instance, in 2014, despite a
national scandal involving manipulated wait times and mismanagement at
the Department of Veterans Affairs (VA),\4\ 80% of VA SES members
received an ``Outstanding'' or ``Exceeds Fully Successful'' rating.\5\
OPM and GAO have both recognized the lack of meaningful distinctions in
performance ratings as a critical issue.
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\4\ Department of Veterans Affairs Office of Inspector General,
``Review of Alleged Patient Deaths, Patient Wait Times, and
Scheduling Practices at the Phoenix VA Health Care System,'' Report
#14-02603-267, available at https://www.vaoig.gov/sites/default/files/reports/2014-08/VAOIG-14-02603-267.pdf.
\5\ See, supra, footnote 2.
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Efforts to improve performance management, such as OPM's 2019
memorandum \6\ to agencies on how to increase rigor in performance
management through well-developed performance standards, have not been
successful. The 2024 Federal Employee Viewpoint Survey showed that just
47% of employees agreed with the statement, ``In my work unit,
differences in performance are recognized in a meaningful way.'' This
was the lowest positive response rate for any question and has
consistently been the lowest over the past three years.\7\ These
patterns suggest a disconnect between executive performance ratings and
actual organizational outcomes, raising concerns about accountability
in key public service areas.
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\6\ OPM, ``Applying Rigor in the Performance Management Process
and Leveraging Awards Programs for a High-Performing Workforce,''
available at https://www.opm.gov/chcoc/transmittals/2019/applying-rigor-performance-management-process-and-leveraging-awards-programs-high-performing_508_0.pdf.
\7\ FEVS Results for 2022 to 2024 available at https://www.opm.gov/fevs/reports/governmentwide-reports/.
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This final rule removes the regulatory prohibition of forced
distribution of
[[Page 44292]]
performance ratings at 5 CFR 430.305(a)(5) and provides that OPM may
establish a forced distribution of SES rating levels. Forced
distribution involves assigning ratings based on pre-determined limits,
such as reserving top ratings for a fixed percentage of performers.
This approach aligns with performance practices in the private sector,
where companies have used forced distribution of some sort in their
performance evaluations.8 9
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\8\ See, e.g., ``Should a company rate its staff? A former
Amazon exec says `stack ranking' is useful when done right,'' CNBC,
December 5, 2023, available at https://www.cnbc.com/2023/12/05/stack-ranking-ex-amazon-exec-explains-the-performance-review-system.html.
\9\ ``Stack Ranking--All You Need to Know,'' Medium (April 3,
2020) available at https://medium.com/@corvisio/stack-ranking-all-you-need-to-know-a5339c27ad83.
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Several foreign civil service systems including those in the UK,
Germany, Portugal, and Indonesia have also implemented similar
models.\10\ Research indicates that forced distribution, when
implemented with appropriate oversight can promote merit-based rewards
and increase organizational performance.\11\ This is particularly
pertinent for the Federal Government because, unlike the private
sector, the Federal Government lacks a profit motive to ensure
meaningful evaluations of its executives. As such, the Federal
Government must rely on accurate appraisals and meaningful distinctions
in performance to ensure accountability, uphold public trust, and meet
statutory obligations.
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\10\ ``Performance Appraisal in the EU Member States and the
European Commission,'' [Uacute]RAD VL[Aacute]DY SLOVENSKEJ REPUBLIKY
(2017) available at https://www.eupan.eu/wp-content/uploads/2019/02/2016_2_SK_Performance_Appraisal_in_the_EU_Member_States_and_the_European_Commission.pdf.
\11\ Wijayanti, A., Sholihin, M., Nahartyo, E., & Supriyadi, S.,
What do we know about the forced distribution system: A systematic
literature review and opportunities for future research, Management
Quarterly Review (2024).
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On January 20, 2025, President Trump issued a Presidential
Memorandum titled ``Restoring Accountability for Career Senior
Executives,'' (90 FR 8481; Jan. 30, 2025) (``Restoring Accountability
Memo''), directing OPM and OMB to issue SES performance plans that
agencies must adopt. The Memorandum's goal is to ensure SES members are
held accountable to the President and the public and to reinvigorate
the SES system by prioritizing merit and performance. In line with the
Restoring Accountability Memo, on February 25, 2025, OPM issued a new
SES performance appraisal system and plan.\12\
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\12\ OPM, ``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''
(February 25, 2025), available at https://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.
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On January 20, 2025, President Trump also signed Executive Order
(E.O.) 14151, ``Ending Radical and Wasteful Government DEI Programs and
Preferencing,'' 90 FR 8339 (Jan. 29, 2025). This order directs the
termination of all DEI policies, programs, and preferences in the
Federal Government, under whatever name they appear. OPM proposed
several regulatory changes in conformance with this E.O.
Summary of Changes
OPM has reviewed the performance management regulations governing
the SES and is issuing this final rule in response to both of the
President's January 2025 directives and pursuant to its regulatory
authority in 5 U.S.C. 4315. OPM is amending 5 CFR 430.305(a)(5) by
removing the prohibition on the use of a forced distribution of ratings
and adding a provision at 5 CFR 430.305(d), allowing OPM to require and
enforce a pre-established agency-wide and Governmentwide distribution
of performance ratings among SES members for covered agencies and
personnel. OPM expects agencies to implement a forced distribution
limiting the highest rating levels (i.e., Levels 4 and 5) only, as
opposed to implementing any requirements with respect to the number of
executives rated at Levels 1 through 3. In response to public comment,
OPM is also adding a provision to 5 CFR 430.305(d) in this final rule,
specifying that OPM may exclude noncareer SES appointees from such
forced distribution requirements. This provision helps alleviate a
concern described in the Public Comment section--that noncareer SES
appointees might receive preferential consideration for high rating
levels at the expense of career SES members' ratings.
As discussed in more detail in a subsequent discussion of comments,
OPM is making additional revisions to eliminate diversity, equity, and
inclusion (DEI) language within SES performance management regulations,
consistent with E.O. 14151.
Public Comment
In response to the proposed rule, OPM received 26 comments during
the 30-day public comment period from multiple individuals, multiple
labor organizations, a professional organization representing
employment law lawyers, and six Federal agencies. At the conclusion of
the public comment period, OPM reviewed and analyzed the comments. In
general, the comments on the rule change were mixed, with some
expressing support and others expressing opposition, and one comment
that was outside the scope of the rulemaking. The comments are
summarized below, along with the suggestions for revisions that were
considered and either adopted, adopted in part, or declined, and the
rationale therefor.
In the first section below, we address general or overarching
comments. In the sections that follow, we address comments related to
the specific portions of the regulation that OPM proposed to revise.
General Comments
OPM received several comments from individuals and agencies
expressing general support for the proposed regulatory changes. For
example, one commenter stated, ``I think it is ridiculous that 95
percent of SES members get rated four or five out of five. And nearly
two-thirds are rated as five out of five.'' The same commenter went on
to say ``OPM should do this. It is just common sense.'' Comment 06.\13\
Additionally, two commenters at one agency conveyed that their agency
fully supports the OPM proposed rule, acknowledging that it aligns with
the Trump Administration policy priorities around restoring
accountability in the career SES and ending radical and wasteful
government DEI programs. Comments 14 and 17.
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\13\ A reference to a comment provides the location of the item
in the public record (i.e., the two-digit number associated with the
location in the docket). Comments filed in response to the proposed
rule are available at https://www.regulations.gov/comment/OPM-2025-0006-00nn, where nn is the comment number.
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OPM also received responses that expressed general opposition to
the changes. One commenter stated: ``I recommend we do not change the
SES rating system. It is important that we have professionals in the
SES and other agencies who have the Knowledge, Skills, and abilities to
keep progressing in the mission of the agencies.'' Comment 02. Another
commenter stated, ``Please do not change the existing evaluation
process for Federal employees due to the whims of the current
administration.'' Comment 10.
Section-by-Section Analysis
In the following sections, we address the public comments related
to the specific portion of the regulation to which each comment
applied.
[[Page 44293]]
Forced Distribution
OPM received a wide range of comments in response to its proposal
to remove the prohibition of a forced distribution of performance
rating levels within the SES. Comments ranged from strong support to
strong opposition, while others agreed that, although something should
be done to address inflated ratings in the SES, there are alternatives
to forced distribution that could be pursued.
Members of the public and several agencies expressed support for
removing the prohibition of a forced distribution due to the large
number of high-level ratings issued under the current SES rating
system, resulting in a lack of differentiation between the higher and
lower performers. One commenter stated, ``I support this proposed rule
to limit the number of Federal executives who can receive the highest
performance ratings. Currently, too many top-level managers receive
`outstanding' or `great job' ratings, which makes it difficult to hold
leaders accountable or recognize who is truly excelling.'' Comment 20.
Notably, all the agencies that provided comments supported removing
the prohibition on forced distribution. One agency in particular stated
that the proposed change ``would fundamentally elevate the standard of
accountability within the Executive Branch, ensuring that only the
truly deserving performers are rewarded for their performance.''
Comment 27. Several other agencies agreed that removing the prohibition
on forced distribution would lead to a more normalized ratings
distribution and would result in greater recognition for the truly
exceptional performers. See, e.g., Comments 18, 24, 25.
Another agency suggested that the implementation of a forced
distribution will better serve the merit system principle at 5 U.S.C.
2301(b)(1), which requires that advancement be determined solely on the
basis of relative ability, knowledge, and skills, after fair and open
competition which assures that all receive equal opportunity. The
agency asserted that the statute's use of the term ``relative'' is not
accidental. The agency stated that, ``It is a recognition of the fact
that assessing the ability, knowledge, and skill of a Federal employee
requires a comparison to similarly situated individuals to make a full
and fair assessment. In appropriate circumstances, forced distribution
will greatly assist agencies in distinguishing between SES employees--
who would otherwise appear to be indistinguishable and interchangeable
from their personnel records--for purposes of selection or
advancement.'' Comment 22.
OPM agrees that this rule will have a positive impact on reducing
inflated ratings within the SES. Enabling agencies to implement a
forced distribution limiting the number of high-level SES ratings will
create conditions that support meaningful distinctions in performance.
OPM also agrees that utilizing a forced distribution, where agencies
must consider relative performance, better reflects the merit system
principle at 5 U.S.C. 2301(b)(1) than a system that predominantly fails
to make distinctions in performance.
Several individual commenters, the two labor organizations, and the
professional organization opposed OPM's proposal to remove the
prohibition on a forced distribution. For example, some of the
commenters and one of the labor organizations were concerned that
forced distribution could negatively impact the culture and work
environment if implemented. Comments 13, 15, 23. One commenter stated
that, ``such systems have been criticized for creating an environment
of unhealthy competition, decreased morale and reduced collaboration
among employees.'' Comment 13. The labor organization echoed this
concern stating: ``Forced distribution is not well-suited to entities
that value security or long-term orientation, as it disincentivizes
creativity and risk-taking and inhibits relationship building between
employees. Organizations like the Federal Government that rely on data
sharing and long-term planning are especially vulnerable to the culture
created by forced distribution, which often strangles innovation and
dissuades collaboration.'' Comment 23.
OPM disagrees with the concerns posed about the effect of forced
distribution on agency culture and innovation. By removing the
prohibition on a forced distribution of ratings, OPM is advocating, as
it has done for many years, for agencies to strive towards creating a
high-performance culture where truly exceptional performance will be
differentiated from mediocre and poor performance and that a Level 3
``Fully Successful'' rating will be increasingly recognized as a
positive rating that is valued.\14\ Appraisals of performance in the
SES, as required by 5 U.S.C. 4313, must be based on both individual and
organizational performance and, for an agency's appraisal system to be
certified under 5 U.S.C. 5307(d), it must make meaningful distinctions
based on relative performance. As such, the concern that forced
distribution will stifle collaboration or lead to unproductive
competition is obviated by the executive's rating depending on the
successful achievement of organization and agency goals. Senior
executives cannot receive high ratings through their individual efforts
alone; collaboration and cross-functional cooperation are unavoidable
imperatives that a successful senior executive must embrace, regardless
of whether a forced distribution is implemented or not.
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\14\ See, e.g., OPM, ``Applying Rigor in the Performance
Management Process and Leveraging Awards Programs for a High-
Performing Workforce,'' (July 12, 2019) available at https://www.opm.gov/chcoc/transmittals/2019/applying-rigor-performance-management-process-and-leveraging-awards-programs-high-performing_508_0.pdf.
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Some commenters and the professional organization were concerned
that imposing a forced distribution will diminish accuracy and
accountability from the appraisal of senior executive performance.
Comments 04, 05, 19. For example, one commenter stated: ``Certainly, an
individual who may have been entitled to a top-notch review will be
hamstrung into a lower category, simply because this forced
distribution requires it. In fact, lower performers may even get placed
into a higher category because this forced distribution requires that
no more than x number of employees be evaluated at the lowest level.''
Comment 04. The professional organization stated, ``Any such curve
necessarily introduces inaccuracies in the appraisals provided to SES
employees, by forcing employees whose performance may merit `4' or `5'
level rating under the applicable performance standards to only receive
a `3' rating to comply with the `grading curve.' '' The professional
organization also argued that the proposal to remove forced
distribution violates 5 U.S.C. 3131(2) and (4) and 4312(a)(1). Comment
19.
OPM does not agree that imposing a forced distribution would remove
accuracy or accountability from the appraisal of senior executive
performance. On the contrary, OPM believes that failing to effectively
reform a Governmentwide appraisal system in which approximately 96% of
its senior executives receive the highest rating levels erodes
accountability and credibility from SES performance appraisals. OPM
also disagrees that implementation of a forced distribution could
result in a poor performer
[[Page 44294]]
receiving a higher rating than he or she earned. The final rule does
not mandate any minimums with respect to the rating levels issued at an
agency. Rather, it simply removes the categorical prohibition on forced
distribution. The new SES appraisal system and plan issued on February
25, 2025, instructed that, if the regulatory prohibition on forced
distribution is removed, each agency would be expected to limit their
number of Level 4 and 5 ratings to no more than 30%. The new system
also includes flexibility for the President to waive the 30% limit by
certifying that the performance of the agency's executives was
outstanding during the relevant time period. OPM has no intention of
requiring a minimum number of ratings at any of the lower rating
levels. OPM also disagrees with the interpretation by the professional
organization that removing the prohibition on forced distribution
violates any statutes. The current SES appraisal landscape is one in
which the accuracy of SES ratings should be questioned, given that
almost no meaningful distinction in performance is made across
Governmentwide SES ratings. This rule strives to increase the accuracy
of SES ratings, consistent with 5 U.S.C. 4312(a)(1), by incorporating
relative performance, thereby resulting in a more normalized SES
ratings distribution. This rule also provides for increased conformity
with 5 U.S.C. 3131(4) by emphasizing that only exceptional performers
should be recognized with the highest ratings, as opposed to the vast
majority of the SES population receiving the highest ratings.
Several commenters cautioned that allowing for a forced
distribution of ratings could hinder retention of competent executives
and deter talented individuals from joining the SES if they expect a
Level 3 rating. Comments 07, 09, 16. For example, one commenter stated,
``few would want to forego higher private sector salaries, knock
themselves out for a few years while turning around a bureau or an
agency, and then receive performance ratings of `3' each year because
of forced distribution.'' Comment 07. Another commenter pointed out
that engrained perceptions associated with the current rating labels
could be an underlying issue that needs to be addressed. For instance,
Level 3 ``Fully Successful'' likely has a certain connotation shared
throughout the Federal Government. The commenter suggested that it
might aid with the transition to a forced distribution to establish new
rating labels to avoid executives ``feeling like they are being graded
lower than they were previously for the same work.'' Comment 09.
OPM accepts that there may be connotations associated with various
rating levels. However, OPM anticipates that one of the outcomes of
this final rule will be a more normalized distribution of SES ratings,
in which a rating of Level 3 will not be viewed as a poor rating, but
rather a good rating that is valued. Because rating inflation has been
allowed to persist for so long within the SES, it has created an
environment devoid of meaningful distinctions in SES performance
ratings where many senior executives now expect to receive the highest
ratings without demonstrating superior performance relative to the
other senior executives in their agency. Under a forced distribution, a
truly exceptional senior executive who turns a low performing bureau or
agency around into a high performing one should still expect to receive
a Level 5 (``Outstanding'') rating. OPM expects that high-potential
executive talent will not be dissuaded from joining the SES under a
system that utilizes a forced distribution and that is more likely to
accurately differentiate the performance of its senior executives.
Those who join the Federal Government often do so because they are
driven by a public service motivation and belief in the agency's
mission. A national survey conducted by the Partnership for Public
Service in the spring of 2024 \15\ found that 65% of U.S. adults agree
that ``working in the Federal Government is a good way for a person to
serve their community.'' SES members are in positions to directly shape
the direction of their agency and make positive impacts on their
community and the Nation. Beyond the meaningful work, the SES offers a
strong package of benefits, including competitive salaries, generous
annual and sick leave programs, health and life insurance, access to
the Federal Employees Retirement System, opportunities for executive
development and training, and eligibility for rating-based performance
awards. Agencies are able under the new SES appraisal system and plan
to provide performance awards to executives who receive a Level 3
(``Satisfactory'') rating, which will reinforce the value of that
rating.
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\15\ Partnership for Public Service, ``Two-thirds of the public
sees a job in the federal government as a good way to serve their
community,'' (July 29, 2024) available at https://ourpublicservice.org/blog/a-federal-government-job-is-a-good-way-to-serve-your-community/.
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Two commenters voiced concern that forced distribution can be
subject to ``gaming'' (Comments 09, 11), where supervisors may choose
to rotate who receives higher ratings regardless of performance, such
as by categorizing employees who were retiring in the near future into
the lowest performance category so that, if there were termination
consequences, those affected would be employees retiring in the near
future. Although one of the commenters applauded OPM's current
regulatory effort to curb rating inflation, the commenter also stated
that ``all a percentage limit or quota on high ratings will get you is
a [sic] an informal `just wait your turn' rotation system. That sort of
backdoor system gives a career executive a high performance rating
every third year or so, when it's their `turn' to be wonderful. And
they're told `be patient' when it isn't.'' Comment 11. These commenters
suggested that, if forced distribution is implemented, OPM should add
further reporting requirements to evaluate whether ratings are being
rotated (Comment 09) or possibly utilize the President's Management
Council (PMC) to evaluate agency performance ``to ensure that an
agency's individual SES performance ratings were generally consistent
with a particular agency's overall performance.'' Comment 11.
OPM acknowledges that forced distribution, when not implemented
with appropriate oversight or controls, could lead to an agency
``gaming'' the rating process by rotating which senior executives
receive the highest rating levels. That would understandably demoralize
top performers and undermine the intent of the rule--which is to ensure
that only the truly deserving executives receive the highest rating
levels and associated rewards. To ensure proper oversight over senior
executive ratings, the President's January 20, 2025, memorandum on
Restoring Accountability for Career Senior Executives required agencies
to re-constitute their SES Performance Review Boards (PRBs) with
individuals committed to full enforcement of the SES performance
standards. OPM is confident the re-constituted PRBs will provide fair
and accurate recommendations on SES annual summary ratings based on
objective consideration of both individual and organizational
performance. Additionally, under its February 25, 2025, memorandum on
the new SES performance appraisal system and plan, OPM expects ratings
to be aligned with and reflect organizational performance and for
senior executives to be evaluated in part based on achieving
organizational goals. Under the new system, there is also a provision
that the
[[Page 44295]]
President may waive the limits imposed by a forced distribution by
certifying that the performance of the agency's executives was
outstanding during the relevant time period. As such, we have not
adopted in these regulations any new requirements to incorporate PMC
oversight responsibilities or to establish additional reporting
requirements on ratings distributions.
One individual commenter and the two labor organizations suggested
alternatives to forced distribution and other recommendations for
improving SES appraisal such as utilizing 360-degree reviews, robust
feedback, and developmental coaching (Comment 15); requiring that SES
have a variety of experience before entry into the SES (e.g., at
multiple agencies and/or experience at state or local government)
(Comment 23); requiring performance plans for political appointees
(Comment 23); and by having performance plans linked to mission,
assessing candidates against leadership-oriented skills in addition to
technical competencies, and by requiring that performance appraisals be
transparent, timely and linked to the executive's development plan
(Comment 26). One of the labor organizations provided direct quotes
from senior executives who shared their perspectives on performance
management, with one executive stating, ``The mechanisms for holding
SES accountable already exist. The problem is that leadership has not
exerted the fortitude necessary to confront non-performing SES and hold
them accountable.'' Comment 26.
Many of the suggested alternatives to forced distribution are
already in place and have been for years--but have failed to
effectively address the fact that SES performance ratings do not
meaningfully and reliably distinguish relative senior executive
performance. For example, E.O. 13714, ``Strengthening the Senior
Executive Service,'' E.O. 13714, 80 FR 79225 (Dec. 15, 2015), requires
that senior executives have executive development plans that include at
least one leadership assessment involving employee feedback (such as a
360 degree-type review) every 3 years to provide feedback and inform
the executive's developmental needs. Agencies continue to be expected
to adhere to this requirement. OPM has also championed a coaching
culture across the Federal workforce to support effective mission
achievement and deliver improved services to the American people.\16\
Additionally, SES performance appraisal regulations already require
that both career and noncareer SES members receive performance plans
containing critical elements based on validated executive leadership
competencies \17\ and that align with results-oriented goals.\18\
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\16\ OPM, Coaching in the Federal Government (September 10,
2018), available at https://www.opm.gov/chcoc/transmittals/2018/coaching-federal-government_09-10-2018_508.pdf.
\17\ 5 CFR 430.305(a)(1).
\18\ 5 CFR 430.301(b)(2).
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SES are hired primarily for their possession of Executive Core
Qualifications (ECQs) rather than for their technical expertise. These
core qualifications are often attained through diverse experiences
spanning across agencies and the public and private sectors. OPM's May
29, 2025, memorandum--Hiring and Talent Development for the Senior
Executive Service \19\--overhauled the ECQs and SES candidate
development programs to strengthen SES hiring and reform ``broken,
insular, and outdated'' Federal hiring practices.\20\ However, even
within an elite cadre of senior executive performers, SES appraisal
systems must provide for appraisal of all senior executives, including
career and noncareer SES appointees, and produce accurate ratings that
make meaningful distinctions based on relative performance. This is a
statutory requirement for certifying an agency's SES performance
appraisal system under 5 U.S.C. 5307(d). The regulations at 5 CFR 430,
subpart D, establish the criteria for certifying SES performance
appraisal systems and require alignment of senior executive performance
plans with the agency's mission and other strategic goals and policy
objectives, incorporation of robust feedback from customers and
stakeholders, and transparency through consultation and oversight.
Thus, while many mechanisms for holding SES accountable already exist,
they have not translated into performance standards that accurately
distinguish relative Senior Executive performance. This problem has
persisted for years, as evidenced by consistently inflated SES ratings
across the Federal Government, even for senior executives who
demonstrably do not perform.\21\ Removing the prohibition of a forced
distribution of SES ratings will create the conditions necessary to
ensure raters differentiate senior executives' performance.
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\19\ OPM, Hiring and Talent Development for the Senior Executive
Service (May 29, 2025), available at https://www.opm.gov/policy-data-oversight/latest-memos/hiring-and-talent-development-for-the-senior-executive-service/.
\20\ E.O. 14170, Reforming the Federal Hiring Process and
Restoring Merit to Government Service, 90 FR 8621 (Jan. 30, 2025).
\21\ See, supra, footnote 4.
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One commenter suggested applying different forced distribution
requirements for career and politically appointed employees, stating
``It likely does not make sense to use stacked rankings that compare
career and political candidates because of the differences in their
service and background. There may be also an incentive to assign the
high ratings to political appointees instead of career staff,
regardless of performance, and then to more prominent political
appointees over less prominent ones.'' Comment 09.
OPM agrees with the commenter's concerns. While the proposed
regulations only addressed the removal of the categorical prohibition
of a forced distribution and did not regulate any specific provisions
for how an agency implements forced distribution, OPM incorporated into
this final rule a provision clarifying that it may establish a forced
distribution of SES ratings and that noncareer SES appointees may be
excluded from such requirements, as determined by OPM. This provides
flexibility for forced distribution requirements to be established,
consistent with OPM guidance, in a manner that best supports rigor and
accountability within the SES. Agency leadership decisions remain bound
by the merit system principles (See 5 U.S.C. 2301(b)) and the
prohibited personnel practices (See 5 U.S.C. 2302) which, among other
things, obligate Federal agencies to implement personnel management
such that all employees receive fair and equitable treatment without
regard to political affiliation.
Another commenter suggested that OPM failed to address one of the
primary drivers of GS level employees moving to the SES ranks--annual
performance awards (i.e., bonuses). That commenter claimed that a
senior executive must get a Level 4 or 5 rating to receive a bonus and
that, if a forced distribution is to be the practice going forward,
senior executives who are ``Fully Successful'' (rated Level 3) should
also receive a bonus, as it would also ``provide some incentive for
these employees to stay in their executive positions and continue to
serve the American people in execution of the policies, practices and
direction of the administration.'' Comment 12.
OPM agrees with the commenter's suggestion, with some
clarification. SES performance awards are authorized under 5 U.S.C.
5384 for senior executives whose performance is determined to be at
least Level 3 (``Fully
[[Page 44296]]
Successful''). It may be that the particular commenter's agency has
established an internal policy limiting performance awards to only
those senior executives rated at Levels 4 and 5. However, that is not a
Governmentwide policy. These regulations do not address SES awards
programs. OPM's February 25, 2025, memorandum on the new SES
performance appraisal system and plan allows agencies to grant a 5%
performance award to senior executives rated Level 3. This helps to
support a culture shift in which a Level 3 rating reflects
``Satisfactory'' performance and is not viewed as a poor rating.
Two commenters, a labor organization, and the professional
organization challenged OPM's general conclusion that the large
proportion of Level 4 and 5 ratings reflects an inherent miscalibration
of the current rating system. Comments 04, 13, 19, 26. The professional
organization highlighted that Congress intended, under the CSRA, that
the SES should be established to provide agencies the necessary
flexibility to recruit and retain the highly competent and qualified
senior executives needed to provide effective management of agencies
and their functions. The professional organization said, ``It is not
surprising that a group of employees deliberately selected to be highly
qualified high performers would perform at a high level, if graded
fairly on their own performance and not `graded on a curve.' '' Comment
19. One of the commenters expressed a similar view, stating that ``The
data indicating high percentages of SES ratings at levels `Outstanding'
and `Exceeds Fully Successful' could be interpreted as evidence of the
high caliber of public service executives rather than a systemic
failure.'' Comment 13.
OPM is keenly aware that entry into the SES represents a
significant achievement; it is a highly selective process that ensures
only the most capable and accomplished individuals are admitted.
However, the high caliber of the SES cadre does not justify assigning
the highest performance ratings to all its members. Even within elite
groups, there are variations in performance. Therefore, performance
expectations should be equally rigorous to encourage excellence in
performance as required by 5 U.S.C. 4312(a)(3) and result in meaningful
distinctions in performance as required for SES performance appraisal
system certification under 5 U.S.C. 5307(d).
A labor organization argued that ``OPM's rule is unsupported
because it is based on no recent data or evidence about SES performance
management. No such data has been cited or released to the public or as
part of the regulatory record.'' Comment 26. The labor organization
noted that OPM has not issued a report on SES ratings distributions to
the public since 2015.
OPM previously disseminated an annual report titled, Report on
Senior Executive Pay and Performance Appraisal Systems, which was last
produced for FY 2016 and is publicly available.\22\ In the FY 2016
report, approximately 92% of SES Governmentwide were rated at Levels 4
and 5. Due to OPM resource constraints, the report was discontinued.
For the purposes of preparing for this rulemaking, however, OPM
analyzed SES ratings for the most recent completed fiscal year for
which ratings data were available (FY23) and reported on those results
in the NPRM's Supplementary Information at 90 FR 18820. The FY23 data
do not show meaningful distinctions being made, with approximately 96%
of SES Governmentwide rated at Levels 4 and 5. Thus the FY23 data
further demonstrate the continuing trend of SES members increasingly
receiving Level 4 and 5 ratings, beginning with the 2015 GAO report
(showing that between 2010 and 2013, 85% of SES were rated Level 4 or
5) and continuing with OPM's FY 2016 report (showing that 92% of SES
were rated Level 4 or 5). The FY 23 data represents yet another example
of reported data showing that SES ratings continue to be extremely
high.
---------------------------------------------------------------------------
\22\ OPM, ``Report on Senior Executive Pay and Performance
Appraisal Systems,'' (January 2018) available at https://www.opm.gov/policy-data-oversight/senior-executive-service/reference-materials/fy-2016-report-on-senior-executive-pay-and-performance-appraisal-systems/.
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Eliminating DEI Language From Sec. Sec. 430.308 and 430.311
This final rule removes diversity, equity, and inclusion (DEI)
language from the SES performance appraisal regulations at 5 CFR part
430, subpart C, consistent with President Trump's Executive Order
titled, ``Ending Radical and Wasteful Government DEI Programs and
Preferencing.'' E.O. 14151, 90 FR 8339 (Jan. 29, 2025). This order
directs the termination of all DEI policies, programs, and preferences
in the Federal Government, under whatever name they appear.
The existing regulation at 5 CFR 430.308(d)(7) requires that
``leadership effectiveness in promoting diversity, inclusion, and
engagement'' be taken into account as one of several factors in
appraising senior executive performance. OPM is deleting paragraph
(d)(7), thereby removing promotion of DEI from the list of factors.
This change is consistent with E.O. 14151 because paragraph (d)(7)
conveys to both the senior executive and to the public that executives
are expected (1) to promote a particular, controversial ideology
throughout the government and (2) to promote policies, programs, and
preferences throughout the Federal Government that the President has
identified as wasteful and divisive.
Additionally, 5 CFR 430.311(a) imposed requirements pertaining to
the membership of agency PRBs and encouraged agency heads ``to consider
diversity and inclusion in establishing their PRBs.'' OPM is removing
that language from the paragraph and, in its place, encouraging agency
heads to consider selecting members that are committed to applying the
requirements in the SES Performance Appraisal System and Plan and
assuring an SES of the highest caliber, consistent with the Restoring
Accountability Memo.
Comments were evenly split between those who generally support
removing DEI language from the SES performance appraisal regulations
and those who oppose removing it. Agencies and some members of the
public voiced support for removing DEI for various reasons. Some
agencies agreed with removing the DEI language because doing so aligns
with the Trump Administration policy priorities around restoring
accountability in the career SES and ending radical and wasteful
government DEI programs and preferencing (See Comments 11, 14, 17, 27).
One agency in support of removing the language stated that it would
allow for more of a focus on ``job-relevant criteria and measurable
outcomes'' (Comment 25), while another agency said that the current
language ``promoting diversity is likely to promote unlawful
discrimination and that the proposal to remove that language is
appropriate and necessary.'' Comment 22. An individual commenter also
strongly supported removing the DEI language stating, ``DEI is counter-
productive. As a taxpayer and citizen, I demand employees are hired
based on merit and not on identity. Hiring by identity is a violation
of civil right discrimination laws and produces inferior results that
put public safety at risk. Or punishes people for their identity. It is
not a constitutional right to be elevated in importance because of
one's identity.'' Comment 21.
OPM agrees that race- and sex-based preferencing operating under
the banner of ``diversity, equity, and inclusion'' have no place in the
Federal Government and the changes being made in this final rule
reflect a commitment to supporting the policies
[[Page 44297]]
of the Administration and upholding the Federal Government's merit-
based hiring and performance evaluation system.
Several commenters opposed removing DEI language because they argue
DEI represents essential values that contribute positively to the
Federal Government, and that removing DEI language sends a regressive
message undermining the importance of those values. See Comments 08,
10, 13. Additionally, one commenter said, ``removing DEI language from
SES appraisal undermines the public interest, reduces accountability
for inclusive leadership, and directly contradicts decades of evidence
that diverse, equitable leadership improves government performance and
trust.'' Comment 15.
OPM disagrees that the race- and sex-based preferencing programs
operating under the banner of ``diversity, equity, and inclusion''
represent essential values of the Federal Government. On the contrary,
the Equal Protection Clause of the Constitution establishes the
foundational principle that Government may never discriminate based on
protected characteristics, including race, except in rare
circumstances. As the Supreme Court articulated in Students for Fair
Admissions, Inc. v. President & Fellows of Harvard College (``SFFA''),
600 U.S. 181, 206 (2023), the ``core purpose'' of the Equal Protection
Clause is to ``do away with all governmentally imposed discrimination
based on race.'' The Court further emphasized that ``eliminating racial
discrimination means eliminating all of it.''
One of the labor organizations, the professional organization, and
one commenter disagreed with removing the DEI language on a legal
basis. See Comments 16, 19, 26. Specifically, with regard to
eliminating the performance appraisal factor at 5 CFR 430.308(d)(7),
the labor organization asserted that OPM's conclusion was that the
regulation is inconsistent with 5 U.S.C. 7201 and went on to say ``It
is hard to understand how OPM reaches this conclusion, based on the
plain statutory language at 5 U.S.C. 7201(b) which states, `It is the
policy of the United States to insure equal employment opportunities
for employees without discrimination because of race, color, religion,
sex, or national origin.' '' Comment 26.
It should be noted that 5 U.S.C. 7201(b) goes on to say, ``The
President shall use his existing authority to carry out this policy.''
5 U.S.C. 7201(b). The removal of DEI language from 5 CFR 430.308(d)(7)
and 5 CFR 430.311(a) follows from and is consistent with President
Trump's Executive Order titled, ``Ending Radical and Wasteful
Government DEI Programs and Preferencing.'' E.O. 14151, 90 FR 8339
(Jan. 29, 2025). This order directs the termination of all DEI
policies, programs, and preferences in the Federal Government, under
whatever name they appear. OPM is eliminating promoting DEI as an SES
performance appraisal factor because making promoting DEI at work as a
basis for evaluating SES performance is, at a minimum, confusing and
contradictory in light of the President's Executive Order. It also may
lead to the impression that executives should (1) be ideologically
committed to DEI, when DEI is very controversial, condemned by the
Trump Administration, and may lead to unlawful hiring practices, and
(2) have leeway to engage in DEI practices that are unlawful as
described in U.S. Equal Employment Opportunity Commission (EEOC) \23\
and U.S. Department of Justice (DOJ) guidance.\24\ OPM does not believe
that 5 U.S.C. 7201 required this confusing performance appraisal factor
at 5 CFR 430.308(d)(7). Furthermore, eliminating the promotion of
``diversity'' and ``inclusion'' as appraisal factors does not impede
SES members from having their appraisal take into account equal
employment opportunity requirements, or compliance with merit systems
principles, as required by 5 U.S.C. 4313(5). Similarly, eliminating the
requirement in Sec. 430.308(d)(7) to promote ``engagement'' removes a
redundant requirement. Engagement is already accounted for in SES
appraisals. The new SES appraisal system and plan issued on February
25, 2025, includes standardized critical elements, one of which is
titled ``Holding Others Accountable and Treating them Fairly.'' This
critical element includes requirements for SES to treat all employees
fairly and consistent with their merit and competence, as well as obey
laws regarding equal employment opportunity. OPM expects that all
employees should receive fair and equitable treatment in all aspects of
personnel management consistent with Merit System Principles, including
5 U.S.C. 2301(b)(2).
---------------------------------------------------------------------------
\23\ EEOC, What You Should Know About DEI-Related Discrimination
at Work (March 19, 2025).
\24\ U.S. Department of Justice, Implementation of Executive
Orders 14151 and 14173: Eliminating Unlawful DEI Programs in the
Federal Operations (March 21, 2025) available at https://www.justice.gov/ag/media/1388501/dl?inline.
---------------------------------------------------------------------------
Commenters opposing the removal of DEI language in 5 CFR 430.311
did so mostly through statements that opposed removing DEI language in
general as opposed to targeting objections to OPM's changes to 5 CFR
430.311. In this final rule, OPM is amending the regulation on PRB
membership so that agency heads are encouraged to select members that
are committed to applying the requirements in the SES Performance
Appraisal System and Plan and assuring an SES of the highest caliber.
This replaces the current regulatory language encouraging agency heads
to consider diversity and inclusion in establishing their PRBs. Any
system that would inject racial considerations into who is chosen for a
particular position at an agency--be it the PRB or anything else--would
be in tension with SFFA as well as other cases such as McDonald v.
Santa Fe Trail Transp. Co., 427 U.S. 273, 280 (1976) and Ricci v.
DeStefano, 557 U.S. 557 (2009). Therefore, OPM is not adopting any
recommendations to retain DEI language or replace the eliminated
language from 5 CFR 430.308 or 5 CFR 430.311 with other DEI language.
Expected Impact of This Rulemaking
A. Statement of Need
OPM is issuing this final rule pursuant to its authority to issue
regulations governing performance appraisals in the SES in subchapter
II of chapter 43 of title 5, United States Code. The purpose of this
rulemaking is to provide a means by which only the highest performing
SES members receive the highest performance ratings. Previous efforts
\25\ to promote rigor in SES performance appraisal by encouraging
agencies to develop more stringent performance requirements have not
resulted in significant changes to SES ratings distributions.
---------------------------------------------------------------------------
\25\ See, supra, footnote 14.
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During the FY23 performance appraisal cycle, across 91 Federal
agencies, the distribution of SES members' performance ratings was as
follows: 64.3% (4608 members) were rated ``Outstanding'' at Level 5,
31.7% (2273 members) were rated ``Exceeds Fully Successful'' at Level
4, 3.6% (261 members) were rated ``Fully Successful'' at Level 3, 0.2%
(15 members) were rated ``Minimally Satisfactory'' at Level 2, and 0.1%
(10 members) were rated ``Unsatisfactory'' at Level 1.\26\ The
distribution of these ratings demonstrates that there continues to be
inflation of SES performance ratings and that action must be taken in
order to re-set and infuse rigor into the SES performance appraisal
process. As such, the removal of the prior prohibition of
[[Page 44298]]
forced distribution of SES ratings is necessary to enable the
establishment and enforcement of limits on SES rating levels.
---------------------------------------------------------------------------
\26\ See, supra, footnote 3.
---------------------------------------------------------------------------
B. Impact
By applying a forced distribution of SES performance ratings,
agencies and individual SES members will be held to a higher standard
of accountability because there will be a pre-established limited
number of higher performance ratings, thereby ensuring only the truly
deserving performers are rewarded for their performance.
Removing the regulatory prohibition on forced distribution is an
important first step towards recalibrating agencies' focus and efforts
on ensuring meaningful distinctions in SES performance ratings. OPM
expects that forced distribution will incentivize improved performance
of SES members as they no longer will expect to receive the highest
ratings without demonstrating superior performance relative to the
other senior executives in their agency. This will ultimately improve
the performance of the government in providing services to the American
public.
C. Costs
This final rule is expected to affect the operations of more than
90 Federal agencies--ranging from cabinet-level departments to small
independent agencies--that have employees in the SES. Individuals
employed by these agencies will spend time updating agency SES
performance appraisal policies and procedures during fiscal year 2025
to prepare for implementation in the fiscal year 2026 performance
appraisal period. Typically, an agency's Executive Resources staff
handles tasks associated with updating SES performance plans and
refining policy documents. Therefore, 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.
To comply with the regulatory changes in this rule, affected
agencies must review the rule and update their policies and procedures.
We estimate that, in the first year following publication of a 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 should result in
estimated costs of about $12,400 per agency and about $1.1 million
Governmentwide.
SES members revise their performance requirements each year as they
develop their performance plans. OPM anticipates that adjusting their
performance requirements to reflect the updated critical elements may
take each executive 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 to
develop performance requirements for the annual performance plan. Based
on the average salary for the ES pay plan in September 2024 (most
recent available data), we assume an average salary rate of $207,313,
or $99.67 per hour.\27\ 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 $199.34 per
hour. There are approximately 8,430 members of the SES corps in the
executive branch. This results in a one-year, transitional increase in
costs of about $420,000 Governmentwide.
---------------------------------------------------------------------------
\27\ Average SES pay drawn from Office of Personnel Management
FedScope data, available at https://www.fedscope.opm.gov/.
---------------------------------------------------------------------------
OPM anticipates that the overall implementation costs will be
limited in duration and total about $1.5 million. OPM did not receive
any comments on its estimates of costs.
D. Benefits
The 2015 GAO report expressed that a cultural shift might be needed
among agencies and employees to acknowledge that a rating of ``Fully
Successful'' is already a high bar and should be valued and that
``Outstanding'' is a difficult level to achieve.\28\ The application of
a forced distribution within the SES performance appraisal system will
reinforce the understanding that success as a senior executive is
aligned to the appropriate rating at the ``Fully Successful'' level. By
establishing a limit on the number of SES members who can receive a
rating above the ``Fully Successful'' level, 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 virtually all of
their senior executives at the highest performance ratings, thus
encouraging SES members to strive for increased levels of performance
and ultimately provide better results for the government and the
American public. Consistent with the letter and intent of 5 U.S.C. 3131
and 4312(a), only truly deserving senior executives will be recognized
and rewarded for excellent performance.
---------------------------------------------------------------------------
\28\ Supra, footnote 2.
---------------------------------------------------------------------------
E. Regulatory Alternatives
OPM considered the alternative of not removing the prohibition on
forced distribution and instead issuing further guidance encouraging
agencies to be increasingly rigorous in their management of SES
performance to promote meaningful distinctions in SES performance.
However, previous attempts to achieve this result through guidance have
not been successful in curbing inflated SES ratings; instead, it
appears that the percentage of SES receiving Level 4 or 5 performance
ratings has only increased. Without the ability to place limits on SES
ratings, there will almost certainly continue to be a pervasive
inflation of ratings and a lack of accountability and meaningful
distinction in performance ratings throughout the SES.
OPM also considered the alternative of reinstating the review of
SES performance plans by OPM as part of the SES performance appraisal
system certification review process. Prior to the issuance of OPM's
further streamlined performance appraisal system certification process
in 2018, referred to as Certification 2.0, agencies were required to
submit a sample of performance plans to OPM for review. OPM could
revert to requiring agencies to submit SES performance plans for review
to ensure that performance requirements are properly calibrated to
established SES performance standards. OPM's practice of reviewing
individual SES performance plans was abandoned under Certification 2.0
primarily due to the administrative burden that it placed on agencies
and OPM. While the aim of this rule is to increase the performance of
SES, OPM also must consider the mandate to deliver a government to the
American people that is lean and efficient. Returning to the practice
of OPM reviewing individual SES performance plans is not a practical
alternative given the additional time required by OPM to review, and
for agencies to make corrections to, SES performance requirements. In
addition, it is unlikely that requiring OPM to individually certify
agency SES performance plans would meaningfully shift the distribution
of SES performance ratings in the absence of a repeal of the rule
against forced distribution.
OPM received several comments that suggested alternatives to
removing the prohibition on forced distribution.
[[Page 44299]]
OPM's consideration of these alternatives is addressed in the
discussion of comments. See, e.g., the preceding discussion of comments
15, 23, and 26.
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). A
regulatory impact analysis must be prepared for major rules with
economically significant effects of $100 million or more in any one
year. This rulemaking does not reach that threshold but has otherwise
been designated a ``significant regulatory action'' under section 3(f)
of Executive Order 12866. This final rule is not an Executive Order
14192 regulatory action because it does not impose any more than de
minimis regulatory costs.
C. Federalism
This rulemaking 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 proposed rule does not have
sufficient federalism implications to warrant preparation of a
Federalism Assessment.
D. Civil Justice Reform
This rulemaking 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). In addition, this is a rule related
to agency management or personnel and agency practice or procedure that
does not substantially affect the rights or obligations of non-agency
parties and thus does not come within the meaning of the term ``rule''
as used in the Congressional Review Act. See 5 U.S.C. 804(3)(B), (C).
Therefore, the reporting requirements of 5 U.S.C. 801 do not apply.
G. Paperwork Reduction Act
This regulatory action will not impose any reporting or
recordkeeping requirements under the Paperwork Reduction Act.
List of Subjects in 5 CFR Part 430
Decorations, Government employees.
Office of Personnel Management.
Stephen Hickman,
Federal Register Liaison.
Accordingly, for the reasons stated in the preamble, OPM amends 5
CFR part 430 as follows:
PART 430--PERFORMANCE MANAGEMENT
0
1. The authority citation for part 430 continues to read as follows:
Authority: 5 U.S.C. chapter 43 and 5307(d).
Subpart C--Managing Senior Executive Performance
0
2. Amend Sec. 430.305 by revising paragraph (a)(5) and adding
paragraph (d) to read as follows:
Sec. 430.305 System standards for SES performance management systems.
(a) * * *
(5) Derive an annual summary rating through a mathematical method
that ensures executives' performance aligns with level descriptors
contained in performance standards that clearly differentiate levels
above fully successful;
* * * * *
(d) OPM may establish, and refine as needed, a forced distribution
of SES rating levels which agencies must apply when rating SES members,
except that noncareer SES members may be excluded from such forced
distribution requirements, as determined by OPM.
0
3. Amend Sec. 430.308 by:
0
a. Revising paragraph (d)(6);
0
b. Removing paragraph (d)(7); and
0
c. Redesignating paragraph (d)(8) as (d)(7).
The revision reads as follows:
Sec. 430.308 Appraising performance.
* * * * *
(d) * * *
(6) The effectiveness, productivity, and performance results of the
employees for whom the senior executive is responsible; and
* * * * *
0
4. Amend Sec. 430.311 by revising paragraph (a)(1) to read as follows:
Sec. 430.311 Performance Review Boards (PRBs).
* * * * *
(a) * * *
(1) Each PRB must have three or more members who are appointed by
the agency head, or by another official or group acting on behalf of
the agency head. Agency heads are encouraged to choose individuals for
each PRB committed to applying the SES Performance Appraisal System and
Performance Plan and the requirements therein and promoting and
assuring an SES of the highest caliber.
* * * * *
[FR Doc. 2025-17788 Filed 9-12-25; 8:45 am]
BILLING CODE 6325-39-P