OPM Says New Performance Rating Rules Apply to Current Evaluation Cycle

The new performance evaluation rules for federal employees will apply for the current evaluation cycle which closes in September. The overhaul ends the longstanding ban on forced distribution of ratings, allowing the Office of Personnel Management (OPM) to establish target ranges for the number of employees who can receive the highest ratings.

While no formal guidance on a timeline for implementation was issued, OPM told FedWeek that the standardized rating system applies to the fiscal year (FY) 26 and FY27 performance appraisal cycles.

“Agencies must establish a calibration program for the FY26 performance appraisal closeout no later than September 20, 2026 (end of FY26 appraisal cycle). Additionally, agencies must design their new GS performance management systems, and have them approved by OPM, prior to October 1, 2026 (for FY27 implementation),” said OPM to FedWeek.

In addition, OPM says it will publish separate guidance in the coming weeks to close out the FY26 appraisal cycle.

In a separate manual - which OPM states is not a formal memorandum – OPM provides a target example of ten percent of employees rated as Level 5 (outstanding) with a possible range of five to 15 percent falling into the top category, and 20 percent rated as a Level 4 (exceeds fully successful) with a possible range of 15 to 25 percent falling into that category.

The manual says variations will be allowed by agency component, geography, occupation, and other factors. 

Targeting Ratings Inflation

OPM says the overhaul is needed to cut down on ratings inflation and more accurately measure the performance of employees. 

“The evidence clearly shows that the federal government’s approach to performance management has long struggled to accurately measure employee performance,” OPM said. 

For example, the agency noted that in 2024, 43 percent of employees below the senior level were rated a 5 (outstanding).

Critics of the overhaul, however, argue that forced distributions could hurt morale, workplace culture, and innovation.

The American Federation of Government Employees (AFGE), for example, argued that “The standardized distribution of ratings will effectively result in employees being rated not based on their ability, knowledge and skill, but instead, against one another. This type of rating system has all the earmarks of a popularity contest, not a meritocratic evaluation system.”