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OPM Performance Appraisal Rule: Key Risks for Feds

collective bargaining federal employment mspb performance appraisals whistleblower protection Feb 26, 2026

On February 24, 2026, OPM published a proposed rule that could significantly reshape how federal employees are rated, rewarded, and disciplined. Comments are due by March 26, 2026. While this is not final, it is detailed—and it signals a real shift in philosophy.

Among other changes, OPM proposes allowing agencies to impose standardized rating distributions (including caps on top ratings), eliminating “Level 2,” removing the mandatory higher-level review for an “Unacceptable” rating, limiting pass/fail systems, tightening when ratings can be changed after issuance, requiring biennial OPM certification of appraisal systems, and barring most negotiated grievance challenges to ratings under 5 U.S.C. § 7121. It also expressly permits comparative ranking for ratings, awards, and promotions.

The practical takeaway: performance may no longer be judged solely against objective standards. It may depend on where an employee falls on a curve.

Caps and Comparative Ranking: From Standards to Scarcity

Ratings inflation is a legitimate management concern. But a standardized distribution model is a blunt instrument. When agencies impose caps on top ratings, high-performing teams inevitably face artificial scarcity: someone must be rated lower even if everyone met or exceeded standards.

That shift—from “Did you meet the criteria?” to “How do you rank against peers?”—can change office culture. Scarce rewards tied to opaque rankings often increase internal competition, discourage collaboration, and incentivize risk-avoidance. In environments already strained by return-to-office shifts and reorganization, forced distribution may generate more EEO complaints and retaliation claims—not fewer.

If comparative ranking becomes central, employees should expect closer scrutiny of documentation and sharper disputes about fairness.

The Grievance Ban: A Major Structural Change

The proposed bar on challenging ratings through the negotiated grievance process is one of the most consequential provisions. Arbitration is often the only realistic neutral review for employees who believe a rating was biased or retaliatory.

OPM suggests existing collective bargaining agreements will not be erased immediately. But if this rule is finalized as written, future agreements could exclude rating grievances entirely. That shifts disputes into slower and higher-stakes channels—EEO complaints, OSC disclosures, or waiting for a performance-based action.

When independent review narrows, the stakes of each rating rise.

Fewer Guardrails, Higher Consequences

Removing required higher-level review for a Level 1 (“Unacceptable”) rating eliminates an important structural safeguard. One supervisor’s judgment can directly affect within-grade increases, awards eligibility, and whether a performance-based action begins. In a stricter system, oversight typically expands—not contracts.

Eliminating Level 2 also removes the middle ground. Without a formal “needs improvement” lane, the system risks becoming binary: rate “Fully Successful” and move on, or escalate directly to “Unacceptable.” That may reduce early intervention and structured assistance.

The proposed supervisory element addressing whistleblower protections is conceptually positive. But without transparency and meaningful review pathways, it risks becoming symbolic.

What Federal Employees Can Do Now

First, review your performance plan. Are the standards specific and measurable? If not, request clarification in writing.

Second, document outcomes—not effort. Track deliverables, metrics, and measurable impact. Assume comparative analysis may matter.

Third, request mid-cycle feedback in writing. Silence is not protection.

Finally, consider submitting a comment before March 26. Practical recommendations include: transparency around rating caps, exception processes for high-performing units, adverse-impact monitoring, and preserving a meaningful independent review mechanism.

This rule is proposed—not final. But if implemented, it would reshape ratings, awards, promotions, and performance-based actions across the federal workforce. Awareness and preparation now can reduce anxiety later.

Legal Disclaimer: The information provided in this article is for informational purposes only and should not be construed as legal advice. While I am a federal employment attorney, this post does not create an attorney-client relationship. Every situation is unique, and legal outcomes depend on specific facts and circumstances.

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