Reference Materials
Performance Management History
This document summarizes the key factors that have helped set the stage for the current performance management approaches.
The Centralized Federal Performance Management System
The Civil Service Reform Act of 1978 brought performance appraisal to the center of many aspects of personnel management. The Governmentwide system was standardized in the mid-1980's to use five rating levels and establish strict links between ratings and related personnel actions such as cash awards. Over the years, dissatisfaction with this one-size-fits-all approach increased. Rating inflation grew steadily and the entire system lost its credibility for all its stakeholders.
Previous Studies on Performance Appraisal
Several committees studied and recommended changes for the Federal performance appraisal system. In 1990, the Committee on Performance Appraisal for Merit Pay, a National Research Council committee established at OPM's request, reviewed current research on performance appraisal and merit pay and supplemented the research findings with an examination of the practices of private sector employers. In 1991, the Pay-for-Performance Labor-Management Committee examined ways to strengthen the linkage between the performance of Federal employees and their pay. Also that year, the Performance Management and Recognition System (PMRS) Review Committee was established to review and recommend improvements to the PMRS system of merit pay for the Government's mid-level managers. All three committees concluded that an appraisal approach must be flexible and decentralized so that it would be able to fit its context of both work technology and organization culture. Consensus was also clear about the value of involving employees in the design and implementation of appraisal and awards systems for increasing credibility and acceptance.
Additional Recommendations for Change
In its initial report, From Red Tape to Results (1993), the National Performance Review recommended a decentralized approach to performance management that would encourage employee involvement in system design, focus on improving performance, and maintain individual accountability. In its more detailed accompanying report, Reinventing Human Resource Management (1993), the NPR was more specific, proposing that decentralized systems should be developed by managers and employees and their representatives; policies should be revised to support team structures; and pass/fail appraisal should be possible. The National Partnership Council also supported the NPR recommendations and noted the shared interest of both labor and management to foster high-performance organizations. The President's Management Council called for more flexibility and decentralization, while emphasizing using appraisal to establish and maintain individual accountability.
Stakeholder Interests
Many stakeholders had voiced concerns about the Federal performance management system as it operated prior to the 1995 regulations. Employees were dissatisfied with the old system; it was the single greatest source of grievances. Unions expected change to the system based on the recommendations in the Pay-for-Performance Labor-Management Committee report. Management associations expected change based on the recommendations in the PMRS Review Committee report. Taxpayers wanted to see pay-for-performance and individual performance accountability systems for Federal employees in part because many believe that service is poor, that mediocre performance is tolerated, and that pay raises are automatic. Federal managers had been demanding change and expressing growing frustration with the system that did little to add value or help them actually manage performance. And Congress had expressed the strong need to maintain individual accountability through the appraisal process and to ensure that rewards are allocated appropriately and can be justified.
Conflicting Purposes
A principal source of these problems and stakeholders' concerns lay in the underlying conflict between two purposes system designers intended for the performance management procedures and requirements. First, performance appraisal was to be the means of establishing and maintaining individual accountability and the basis for making decisions about rewards and sanctions. But it was also supposed to lead to improved employee and agency performance. Experience has demonstrated that the hard links between ratings and rewards have led inexorably to inflated ratings against standards that do not serve as effective performance targets and stretch goals. While the private sector has not solved the problems this dual use of performance management systems can produce, it does appear that organizational commitment to the performance management system reduces the problems that occur when the summary appraisal is the focus of the system. When the emphasis is on managing—rather than primarily judging—performance, frequent feedback to performers allows for correction of performance deficiencies before the summary appraisal is made.
Credibility Requires Improved Measurement
As important as achieving a more effective balance between the reward allocation and performance improvement purposes of performance appraisal may be, the real key to increasing the credibility and utility of performance management processes lies in improving the performance measures that are used. Emphasizing individual accountability led to agencies establishing performance elements and standards that extracted process-input tasks and responsibilities from position descriptions. Although they were appropriate and usable for sustaining performance-based adverse actions before the Merit Systems Protection Board, such elements and standards often did not lend themselves to results measurement or goal setting. Also, although measuring individual outputs and results is usually possible, it may not be cost effective compared to the performance management value of measuring group or team outputs and results.
Governmentwide Performance Initiatives That Link to Performance Management
Fortunately, several Governmentwide initiatives are leading agencies to reexamine and improve their performance measures. The 1995 performance management regulations are primed to use those measures for managing and rewarding employees. Key performance initiatives require agencies to set goals and standards and to measure their performance in terms of results. When employee and group performance plans are aligned with these agency goals, everyone's efforts are focused on goal achievement and improving organizational performance. Setting goals and measuring performance are part of an effective performance management process. The Government Performance and Results Act of 1993 (GPRA) provides for the establishment of strategic planning and performance measurement in the Federal Government. It requires agencies to develop strategic plans and performance plans for program activities. Those performance plans establish objective, quantifiable, and measurable goals; establish performance indicators; and provide a basis for comparing program results with plan goals. And on September 7, 1993, the President issued Executive Order 12862, "Setting Customer Service Standards," which requires agencies to identify and survey their customers; post customer service standards and measure results against them; and publish a customer service plan that includes customer service standards and describes future plans for customer surveys.
Historical Chronology
A chronology of the major milestones in the evolution of employee performance management in the Federal Government is presented below.
Year | Actions |
---|---|
2016 |
Introduced Performance Management Plus
|
2015 |
Introduced the Recruitment, Engagement, Diversity, and Inclusion (REDI) Roadmap
Revised Senior Executive Service appraisal regulations
Streamlined the Senior Executive Service (SES) performance appraisal system certification process
|
2014 |
Issued final SL/ST pay regulations
|
2012 |
Established a model SES performance appraisal system
|
2011 |
Established Goals-Engagement-Accountability-Results (GEAR) Model
|
2009 |
Revised regulations on training and development of supervisors
|
2008 |
Senior Professional Performance Act
Authorized certifications up to 24 months with a possible 6 month extension for SES and SL/ST appraisal systems
|
2007 |
Established Performance Appraisal Assessment Tool (PAAT) for SES and SL/ST appraisal systems for determining certification
|
2006 |
Established Performance Appraisal Assessment Tool (PAAT) for non-SES employees
Revised awards regulations on performance-based awards
|
2005 |
Revised awards regulations on calculating the payment of performance-based awards
|
2004 |
Issued interim regulations for Certification of Performance Appraisal Systems
Issued final Senior Executive Service pay regulations
Revised regulations on performance-based awards to non-GS employees
|
2003 |
National Defense Authorization Act for Fiscal Year 2004
Provided authority for the Department of Defense to design its own human resources systems, including a pay-for-performance system
|
2002 |
Chief Human Capital Officers Act
Required the establishment of systems, standards, and metrics for assessing agencies’ management of human capital
Established Chief Human Capital Officers (CHCO) and the CHCO Council
Provided authority for the Department of Homeland Security to design its own human resources systems, including a pay-for-performance system
|
2000 |
Revised Senior Executive Service appraisal regulations
|
1998 |
Revised regulations on ratings of record
|
1997 |
Revised regulations on reduction in force and performance management
|
1995 |
Revised performance management regulations
|
1993 |
Performance Management and Recognition System terminated
|
1992 |
Revised regulations on summary rating levels for General Schedule and Prevailing Rate appraisal systems
|
1991 |
Legislation again extends the Performance Management and Recognition System
Federal Employees Pay Comparability Act
|
1989 |
Legislation extends the Performance Management and Recognition System (PMRS)
Revised Senior Executive Service appraisal regulations
|
1986 |
Final Performance Management System regulations issued
Regulatory pay-for-performance system established
|
1985 |
Final Performance Management and Recognition System appraisal and pay regulations issued
|
1984 |
Civil Service Retirement Spouse Equity Act
|
1978 |
Civil Service Reform Act Agencies required to develop appraisal systems for all Federal employees
|
1962 |
Salary Reform Act
|
1958 |
Government Employees' Training Act
|
1954 |
Incentive Awards Act
|
1950 |
Performance Rating Act
|
1940 |
Ramspeck Act
|
1935 |
Uniform Efficiency Rating System
|
1923 |
Classification Act of 1923
|
1912 |
First Law on Appraisal
|
1883 |
Pendleton Act, or Civil Service Act
|
Legal Citations
Guide to Legal Citations
The information contained in this website is based on title 5, United States Code, and title 5, Code of Federal Regulations. In an effort to help you locate the legal authority for topics related to employee performance and awards, the U.S. Office of Personnel Management has compiled the common performance management topics. The first column of each table lists the topic and other words commonly used to refer to these topics. The middle column presents a description of each topic. Use this description to determine if you would like to access the full legal citation.
Topic | Description | Citation(s) |
---|---|---|
Additional Performance Element |
A type of performance element that does not affect the summary rating level but can be used to help focus employees on goals and achievements that are important to the organization. |
5 CFR 430.203 (definitions) |
Additional Service Credit |
Additional years of service credit added to an employee's actual years of service when determining retention in a reduction in force. The credit is usually based on the 3 most recent ratings of record within the last 4 years. |
5 CFR 351.504 |
Appraisal |
The evaluation of performance in comparison to the elements and standards in an employee's performance plan. |
5 CFR 430.203 (definitions) |
Appraisal Period |
The period of time covered by a specific performance plan during which performance will be evaluated against elements and standards and for which a rating of record will be prepared. |
5 CFR 430.203 (definitions) |
Appraisal Program |
The specific procedures and requirements established by the organization for evaluating employee performance. |
5 CFR 430.203 (definitions) |
Appraisal System |
The agency-established framework of policies and parameters within which performance appraisal programs are designed. The Office of Personnel Management reviews and approves appraisal systems. |
5 CFR 430.203 (definitions) |
Appraisal System Approval |
The review of an agency's established parameters and flexibilities to ensure that they comport with the intent of law and regulations. An agency must submit a description of its appraisal system to OPM for approval, using OPM Form 1631. |
5 CFR 430.209 |
Appraising Official |
The person who evaluates an employee's performance and assigns the element rating(s) and rating of record. |
5 CFR 430.207(b) |
Award |
Something given or a ceremony or event held to recognize someone either as an individual or a member of a group for a specific achievement that the agency values, or as payment of a promised incentive that is often based on predetermined criteria such as productivity or performance goals. |
5 CFR 451.102 (definitions) |
Awards Limitations |
Awards in excess of $10,000 per individual must be approved by the Office of Personnel Management. Awards in excess of $25,000 require Presidential approval. Awards may not be given during a Presidential election period (June 1 of an election year to January 20 of the following year) to certain employees in the excepted service or the non-career Senior Executive Service. Cash awards may not be given to employees in certain Executive level positions when appointed by the President with Senate confirmation. |
5 CFR 451.106(b) |
Cash Award |
A lump-sum payment made to an employee in recognition of an achievement or as payment of an incentive. |
5 CFR 451.104(a)-(c) |
Critical Element |
Those aspects of a job for which an employee can be held individually accountable and that must be done successfully in order for the organization to complete its mission. |
5 CFR 430.203 (definitions) |
Employee Involvement |
Seeking and including employee ideas and opinions in the development of awards programs, performance systems and programs, and employee performance plans. |
5 CFR 430.204(c) |
Forced Distribution |
Limitation on the use of particular summary appraisal levels. This practice is prohibited when doing performance ratings or ratings of record. |
5 CFR 430.208(c) |
Government Performance and Results Act |
Law requiring agencies to set organizational goals pertinent to the agency mission as well as means to accurately measure them. Such goals should be cascaded through the organization and linked to the development of employee elements and standards. |
1993 Government Performance and Results Act |
Invention Award |
An award given for an invention developed by one or more employees. May take the form of a cash, honorary, informal recognition, or time-off award. |
5 CFR 451.104(a) |
Marginal Performance |
The level of performance below "Fully Successful" but above "Unacceptable" that is sufficient to be retained in the position. However, agencies should assist employees to improve their performance whenever it falls below the "Fully Successful" level. |
5 CFR 430.207(c) |
Minimum Period |
The period of time specified in an organization's appraisal program that must be completed before a performance rating may be prepared. |
5 CFR 430.207(a) |
Monitoring Performance |
Reviewing employee performance to check progress and identify any problems. |
5 CFR 430.207(b) |
Non-critical Element |
Aspects of an employee's job that are not critical elements that the organization wants to have impact the summary rating level. Can include aspects of shared accountability, such as group or team elements. |
5 CFR 430.203 (definitions) |
Performance Award |
An award based on the employee's most recent rating of record of Level 3 (Fully Successful or equivalent) or higher. Performance awards may only take the form of cash. |
5 CFR 451.104(a) |
Performance-Based Actions |
Allows for the reduction in grade or removal of an employee based solely on performance. |
5 CFR, part 432 |
Performance Management |
The integrated processes of planning, monitoring, developing, rating, and rewarding employee performance. |
5 CFR 430.102(a) |
Performance Standards |
The expression of how well an employee has to perform on the associated element in order to be appraised at a specific level. Standards should be attainable and verifiable. |
5 CFR 430.203 (definitions) |
Performance Plan |
The written or automated document that communicates to the employee what is expected in the job. The performance plan includes the critical and non-critical elements and standards, plus any additional elements, on which the employee will be evaluated. |
5 CFR 430.203 (definitions) |
Performance Rating |
Appraisals done at other times than at the end of the appraisal period. |
5 CFR 430.203 (definitions) |
Presidential Awards |
The President has the authority to grant awards to Federal employees. OPM must approve most cash awards over $10,000. The President approves all awards of more than $25,000. |
5 CFR, part 451, subpart B |
Progress Review |
Communication with an employee about progress on the elements in the employee's performance plan. There is no limit on the number of progress reviews a supervisor can hold during a cycle, but at least one formal progress review is required. |
5 CFR 430.203 (definitions) |
Quality Step Increase |
An increase in base pay given to recognize excellence in performance. Must be based on the highest rating level used by the appraisal program (Level 5, "Outstanding," if used), and meeting agency-established criteria when the program does not use Level 5. |
5 CFR, part 531, subpart E |
Rating of Record |
The evaluation of an employee's performance as compared to the elements and standards for performance over the entire appraisal period. |
5 CFR 430.203 (definitions) |
Recordkeeping |
Instructions on how to record and report ratings of record and awards as well as how long to retain information in official files. |
5 CFR 430.209(b), (e), and (f) |
Reduction In Force Credit |
Additional years of service credit added to an employee's actual years of service when determining retention in a reduction in force. The credit is usually based on the 3 most recent ratings of record within the last 4 years. |
5 CFR 351.504 |
Second Level Review |
Review of a rating or award recommendation by someone at a higher level in the organization than the person recommending the rating or award. Required for "Unacceptable" ratings of record. Not required for other ratings of record or awards. |
5 CFR 430.208(e) |
Special Act or Service Award |
An award given in recognition of an employee achievement or contribution or as payment as an employee incentive. May be given to individual employees or groups of employees. |
5 CFR 451.104(a) |
Suggestion Award |
An award granted to an employee or group of employees for an accepted suggestion. |
5 CFR 451.104(a |
Summary Levels |
The designators assigned to the summarization of the element appraisals of employee performance done by comparing actual performance to the elements and standards in the employee's performance plan. |
5 CFR 430.208(b) and (d) |
Summary Pattern |
The aggregation of summary appraisal levels used in a particular appraisal program. Each pattern must include summary Levels 1 ("Unacceptable") and 3 ("Fully Successful"). |
5 CFR 430.208(d) |
Superior Accomplishment Award |
An award based on the employee's most recent rating of record of Level 3 (Fully Successful or equivalent) or higher. Performance awards may only take the form of cash. |
5 CFR 451.104(a) |
Time-off Award |
An award given to an employee or group of employees that takes the form of paid time off. May be based on performance as reflected in a rating of record or as a specific contribution. |
5 CFR 451.104(a) and (f) |
Within-grade Increase |
A periodic increase in an employee's pay based upon a Level 3 (Fully Successful or equivalent) or higher rating of record and completion of specific waiting periods. The General Schedule method of pay progression within an employee's current grade. |
5 CFR, part 531, subpart D |