§ 430.101 Statutory provisions.

This subpart sets forth for the benefit of the user the provisions of subchapter I of chapter 43 of title 5, United States Code, relating to establishment of performance appraisal systems and appraisals of employees' performance.

(a) Definitions. 5 U.S.C. 4301 contains the following definitions:

For the purpose of this subchapter(1) "Agency" means

(A) An Executive agency;

(B) The Administrative Office of the United States Courts; and

(C) The Government Printing Office;

but does not include

(i) A Government corporation;

(ii) The Central Intelligence Agency, the Defense Intelligence Agency, the National

Security Agency, or any Executive agency or unit thereof which is designated by the President and the principal function of which is the conduct of foreign intelligence or counterintelligence activities; or

(iii) The General Accounting Office.

(2) "Employee" means an individual employed in or under an agency, but does not include

(A) An employee outside the United States who is paid in accordance with local native prevailing wage rates for the area in which employed;

(B) An individual in the Foreign Service of the United States;

(C) A physician, dentist, nurse, or other employee in the Department of Medicine and Surgery, Veterans Administration whose pay is fixed under chapter 73 of title 38;

(D) An administrative law judge appointed under section 3105 of this title;

(E) An individual in the Senior Executive Service;

(F) An individual appointed by the President; or

(G) An individual occupying a position not in the competitive service excluded from coverage of this subchapter by regulations of the Office of Personnel Management; and

(3) "Unacceptable performance" means performance of an employee which fails to meet established performance standards in one or more critical elements of such employee's position.

(b) Establishment of performance appraisal systems. 5 U.S.C. 4302 provides:

(a) Each agency shall develop one or more performance appraisal systems which—

(1) Provide for periodic appraisals of job performance of employees;

(2) Encourage employee participation in establishing performance standards; and

(3) Use the results of performance appraisals as a basis for training, rewarding, reassigning, promoting, reducing in grade, retaining, and removing employees;

(b) Under regulations which the Office of Personnel Management shall prescribe, each performance appraisal system shall provide for

(1) Establishing performance standards which will, to the maximum extent feasible, permit the accurate evaluation of job performance on the basis of objective criteria (which may include the extent of courtesy demonstrated to the public) related to the job in question for each employee or position under the system;

(2) As soon as practicable, but not later than October 1, 1981, with respect to initial appraisal periods, and thereafter at the beginning of each following appraisal period,

communicating to each employee the performance standards and the critical elements of the employee's position;

(3) Evaluating each employee during the appraisal period on such standards;

(4) Recognizing and rewarding employees whose performance so warrants;

(5) Assisting employees in improving unacceptable performance; and

(6) Reassigning, reducing in grade, or removing employees who continue to have unacceptable performance but only after an opportunity to demonstrate acceptable performance.

(c) Responsibilities of the Office of Personnel Management. 5 U.S.C. 4304 provides:

(a) The Office of Personnel Management shall make technical assistance available to agencies in the development of performance appraisal systems.

(b) (1) The Office shall review each performance appraisal system developed by any agency under this section and determine whether the performance appraisal system meets the requirements of this subchapter.

(2) The Comptroller General shall from time to time review on a selected basis performance appraisal systems established under this subchapter to determine the extent to which any such system meets the requirements of this subchapter and shall periodically report its findings to the Office and to the Congress.

(3) If the Office determines that a system does not meet the requirements of this subchapter (including regulations prescribed under section 4305), the Office shall direct the agency to implement an appropriate system or to correct operations under the system, and any such agency shall take any action so required.

(d) Regulations. 5 U.S.C. 4305 provides:

"The Office of Personnel Management may prescribe regulations to carry out the purpose of this subchapter.".

Subpart B-Regulatory Requirements of the Office of Personnel Management

§ 430.201 Coverage.

(a) Employees and agencies covered by statute. (1) 5 U.S.C. 4301(1) lists agencies covered by this part.

(2) 5 U.S.C. 4301(2) lists employees covered by statute by this part.

(b) Statutory Exclusions. This subpart does not apply to agencies or employees excluded by 5 U.S.C. 4301(1)

and (2), the United States Postal Service and the Postal Rate Commission.

(c) Administrative exclusions. The Office may exclude any position or group of positions in the excepted service under the authority of 5 U.S.C. 4301(2)(G). The following are excluded:

(1) Positions in Schedule C of 5 CFR, Part 213.

(2) Positions filled by Noncareer Executive Assignments under 5 CFR, Part 305.

(3) Positions for which employment is not reasonably expected to exceed 120 days in a consecutive 12-month period.

(d) Agency requests for exclusions. Heads of agencies or their designees may request the Director of the Office of Personnel Management to exclude positions in the excepted service. The request must be in writing, explaining why the exclusion would be in the interest of good administration.

§ 430.202 Definitions.

In this part, terms are defined as follows

(a) "Appraisal system" means a performance appraisal system established by an agency or component of an agency under subchapter I of chapter 43 of title 5, U.S.C. and Subpart B of this part which provides for establishment of performance standards, identification of critical elements, communication of standards, and critical elements to employees, establishment of methods and procedures to appraise performance against established standards, and appropriate use of appraisal information in making personnel decisions.

such as quantity, quality, and timeli

ness.

(e) "Critical element" means a component of an employee's job that is of sufficient importance that performance below the minimum standard established by management requires remedial action and denial of a withingrade increase, and may be the basis for removing or reducing the grade level of that employee. Such action may be taken without regard to performance on other components of the job.

(f) "Appraisal period" means the period of time established by an appraisal system for which an employee's performance will be reviewed.

§ 430.203 The performance appraisal proc

ess.

(a) As required by 5 U.S.C. 4302(a), each agency shall establish one or more appraisal systems for appraising the work performance of employees during an appraisal period.

(b) 5 U.S.C. 4302(a) and (b) require that each appraisal system shall provide for establishing performance standards based on the requirements of employees' positions, communicating the standards of performance and the critical elements of the position at the beginning of each appraisal period, and appraising employees based on a comparison of performance with the standards established for the appraisal period. An agency shall encourage participation of employees in establishing performance standards.

(c) Performance standards and critical elements must be consistent with the duties and responsibilities contained in employees' position descriptions.

(d) An appraisal system shall not permit any preestablished distributions of expected levels of performance (such as a requirement to rate on a bell curve) that interfere with appraisal of actual performance against standards.

(e) 5 U.S.C. 4302 requires that each appraisal system shall provide for periodic appraisals of performance. Employees shall generally be appraised on at least an annual basis. Agencies may provide for longer appraisal periods when duties and responsibilities of

a position or the tour of duty of a position so warrant.

(f) Critical elements and performance standards shall be in writing.

(g) Periodic appraisals shall be in writing and shall be provided to the employee.

(h) A system shall provide for obtaining information about performance of employees detailed or temporarily assigned to different positions when assignments are of sufficient duration to provide information about performance, and agencies shall give appropriate consideration to this information in making personnel decisions.

(i) Performance appraisals shall be

used:

(1) To provide employees with information on their performance and how it may be improved.

(2) As a basis for decisions to grant awards; grant or withhold pay increases, i.e., within-grade increases, step increases, and quality step increases; grant merit pay; reassign; promote; train; retain in reduction in force; and reduce in grade or remove.

§ 430.204 Appraisal system documentation.

(a) Each appraisal system must include statements of:

(1) The employees that it covers;

(2) The method or procedure by which performance standards and critical elements are established and employees are appraised;

(3) The ways in which employees are advised of performance standards and critical elements, are kept informed of their performance, and are notified of their appraisals;

(4) The supervisory officials, by definition or category, who are responsible for appraising performance and, if applicable, reviewing or approving appraisals;

(5) The records to be kept and the uses of those records; and

(6) The manner in which appraisals are used as a basis for personnel decisions, or reference to where this information may be found.

§ 430.205 Training and evaluation.

To assure that the requirements of the law will be effectively implement

ed, agencies must provide appropriate training and information to supervisors and employees on the appraisal process, and must establish methods and procedures to evaluate periodically the effectiveness of their appraisal system(s) and to improve the system(s).

§ 430.206 OPM review of appraisal systems.

(a) Agencies must submit proposed systems to the Office of Personnel Management for review as conforming to the requirements of this part. Submissions may either be agency-wide appraisal systems or requirements which the systems of subordinate organizations must meet. The Office will normally review these systems within 30 days.

(b) The Office will review the operation of appraisal systems and supporting documentation with respect to compliance with the requirements of this part, contribution to agency effectiveness and efficiency, and appropriate use of performance information in personnel decisions.

(c) As provided by 5 U.S.C. 4304(b)(3), if the Office determines that an agency system does not meet the requirements of this part, it shall direct the agency to implement an appropriate system or to correct operations under the system. The agency shall take any action so required.

Subpart C-Implementation and Interim Procedures

§ 430.301 Implementation of this part. Each agency covered by subparts A and B of this part shall submit proposed appraisal systems to the Office for review on or before July 31, 1981. Each agency must implement an approved system or systems on or before October 1, 1981, and must inform all employees covered by this part of the performance standards and critical elements of their positions as soon as the system is approved, but, in no event, later than October 1, 1981. Nothing herein prohibits an agency from developing and implementing critical elements and standards for particular positions prior to the devel

opment and implementation of critical elements and standards for all positions within the agency. Once critical elements and standards are developed for particular positions, they may be used as a basis for agency action including reducing in grade and removing employees. Critical elements and performance standards developed for particular positions prior to the establishment of a complete system must be reduced to writing an provided to the employee before an agency proposes to take an action based on these elements and standards.

§ 430.302 Interim assignment of performance ratings.

The requirement for and the system of assigning summary adjective performance ratings which were in effect on January 10, 1979, shall continue in effect until the agency implements an appraisal system which conforms to the provisions of this part.

vide for reassigning, reducing in grade, or removing employees who continue to have unacceptable performance but only after an opportunity to demonstrate acceptable performance.

(Pub. L. 95-454, Oct. 13, 1978, 92 Stat. 1132) (b) Actions based on unacceptable performance. 5 U.S.C. 4303 provides:

(a) Subject to the provisions of this section, an agency may reduce in grade or remove an employee for unacceptable performance.

(b) (1) An employee whose reduction in grade or removal is proposed under this section is entitled to

(A) 30 days' advance written notice of the proposed action which identifies

(i) Specific instances of unacceptable performance by the employee on which the proposed action is based; and

(ii) The critical elements of the employee's position involved in each instance of unacceptable performance;

(B) Be represented by an attorney or other representative;

(C) A reasonable time to answer orally and in writing; and

(D) A written decision which

(i) In the case of a reduction in grade or removal under this section, specifies the instances of unacceptable performance by the employee on which the reduction in grade or removal is based, and

(ii) Unless proposed by the head of the agency, has been concurred in by an employee who is in a higher position than the employee who proposed the action.

(2) An agency may, under regulations prescribed by the head of such agency, extend the notice period under subsection (b)(1)(A) of this section for not more than 30 days. An agency may extend the notice period for more than 30 days only in accordance with regulations issued by the Office of Personnel Management.

(c) The decision to retain, reduce in grade, or remove an employee

(1) Shall be made within 30 days after the date of expiration of the notice period, and

(2) In the case of a reduction in grade or removal, may be based only on those instances of unacceptable performance by the employee

(A) Which occurred during the 1-year period ending on the date of the notice under subsection (b)(1)(A) of this section in connection with the decision; and

(B) For which the notice and other requirements of this section are complied with.

(d) If, because of performance improvement by the employee during the notice period, the employee is not reduced in grade or removed, and the employee's performance continues to be acceptable for 1 year

from the date of the advance written notice provided under subsection (b)(1)(A) of this section, any entry or other notation of the unacceptable performance for which the action was proposed under this section shall be removed from any agency record relating to the employee.

(e) Any employee who is a preference eligible or is in the competitive service and who has been reduced in grade or removed under this section is entitled to appeal the action to the Merit System Protection Board under section 7701 of this title.

(f) This section does not apply to

(1) The reduction to the grade previously held of a supervisor or manager who has not completed the probationary period under section 3321(a)(2) of this title,

(2) The reduction in grade or removal of an employee in the competitive service who is serving a probationary or trial period under an initial appointment or who has not completed 1 year of current continuous employment under other than a temporary appointment limited to 1 year or less, or

(3) The reduction in grade or removal of an employee in the excepted service who has not completed 1 year of current continuous employment in the same or similar positions.

(Pub. L. 95-454, Oct. 13, 1978, 92 Stat. 1133)

(c) Regulations. 5 U.S.C. 4305 provides that the Office of Personnel Management may prescribe regulations to carry out the purpose of this subchapter.

Subpart B-Regulatory Requirements of the Office of Personnel Management

§ 432.201 Coverage.

(a) Actions covered. This part covers reduction in grade and removal of an employee based solely on unacceptable performance.

(b) Employees and agencies covered. The employee and agency coverage of this part is identical with that of § 430.201(a) of Part 430 of this title.

(c) Exclusions. (1) This part does not apply to actions excluded by 5 U.S.C. 4303(f).

(2) This part does not apply to employees and agencies excluded under § 430.201 (b), (c), and (d) of Part 430 of this title.

(3) This part does not apply to the following:

(i) An action initiated under the authority of 5 U.S.C. 1206;