Performance Management System Changes for Feds; Goal is to End “Inflation” of Ratings

The Trump Administration is making changes to the performance management system for federal employees, with the new rules designed to “end inflation of employee performance ratings” and boost disciplinary methods. Federal employees are commonly rated on a five-level scale, with the ratings used to determine everything from cash bonuses to terminations. 

The administration hopes the policy changes will bring the federal workforce into a high-performance, high-accountability culture. The goal is to have it in place by the start of fiscal year (FY) 2026 and follows early changes to performance management plans for members of the Senior Executive Service (SES) and those in Senior Level, Scientific and Professional positions. 

“For many decades now, performance management across the Federal workforce has fallen short of what the American people should expect. Too often, this has resulted in a lack of accountability and inflated performance ratings,” wrote Office of Personnel Management (OPM) Director Charles Ezell in a memo. 

Individual, Agency Contributions in Focus

The memo spelled out a host of new rules designed to “normalize” the federal ratings system and “reflect individual contributions to organizational results and outcomes.”

What that means is that agencies must rigorously define what is required to achieve performance at the various levels. For example, a “fully successful” rating must reflect that the employee is achieving all expectations for the position and is contributing to the agency’s success in meeting organizational goals. Ratings above “fully successful” must reflect performance that far exceeds the position’s responsibilities. 

Agencies must also ensure that there are not a disproportionate number of employees rated at the highest performance levels to end ratings “inflation.”

OPM writes that clear expectations must be set ahead of time for the employee, and include “performance expectations and goals that align individual employee efforts with organizational goals, the agency’s mission, and the President’s policy priorities.”

In addition, managers were told to limit pass/fail evaluation systems to seasonal workers, teachers, General Schedule (GS) grades 1-4, and Federal Wage System employees.

And senior executives who manage at least ten employees will be graded on how the ratings of their subordinates “reflects the performance of their organization.”

Supervisors and managers must also receive training on performance management within one year of appointment to a supervisory position and refresher training every three years.

Boosting Accountability and Speedy Removals

A second component of this plan is boosting employee accountability.

OPM told agencies to review and update performance and disciplinary policies to ensure that poor performers can be swiftly removed, reduced in grade, or reassigned. 

“This is especially important for agencies that have been exempted by President Trump from collective bargaining due to their national security and/or investigative missions and are transitioning from having agency employment policies dictated by collective bargaining,” wrote OPM Director Ezell. 

Agencies were also told they have “broad flexibility in terminating probationary or trial period employees who fail to adequately perform or who fail to advance the organization’s mission.”