According to guidance issued earlier in the year, in agencies with five or more SES members, no more than 30 percent generally may be rated at level 4 or 5. Image: Andrii Yalanskyi/Shutterstock.com
By: FEDweek StaffOPM has finalized rules that clear the way for agencies to impose a forced ratings pattern for their career SES members starting with the fiscal 2026 ratings cycle, saying that “action must be taken in order to re-set and infuse rigor into the SES performance appraisal process.”
Final rules in the September 15 Federal Register do not specify a distribution, but cite an expectation in early-year guidance that in agencies with five or more SES members, no more than 30 percent generally may be rated at level 4 or 5. There would continue to be no set distribution pattern for the first three levels.
Performance ratings are especially important for SES members since they do not receive annual basic federal pay raises but rather are paid within a range with raises and performance awards based on those ratings.
Like the earlier guidance and proposed rules, the notice cites data from the 2023 rating cycle in which 64 percent of execs were rated as level 5 (outstanding) and another 32 percent as level 4 (exceeds fully successful). It says those numbers are higher than those of 2015 when GAO called attention to the issue—when 85 percent received one of the top two ratings—and those of the last of what had been a series of OPM reports on ratings distributions—when the 2016 figure was 92 percent.
“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,” it says.
OPM noted that comments to the proposed rules were generally favorable from federal agencies although negative from federal employee unions and professional organizations. The latter expressed concern about “creating an environment of unhealthy competition, decreased morale and reduced collaboration among employees,” as OPM summarized their comments.
OPM said however that since SES ratings are based on both individual and organizational performance, “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.”
“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,” it said. It also said it “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.”
It added: “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.”
The final rules are largely unchanged from the proposed version, although a new provision would allow for excluding non-career SES members from the predetermined ratings distributions in response to a comment that they otherwise “might receive preferential consideration for high rating levels at the expense of career SES members’ ratings.”
The rules meanwhile remove any considerations related to carrying out DEI-related policies from an executive’s rating.
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