he Civil Service Reform Act created a new performance management system in 1978 and bosses and staffers have been complaining about it ever since. In 1993, the National Performance Review slammed the system, calling it inflexible, unresponsive to agency needs, overly concerned with poor performers and inattentive to those who could improve, threatening to managers and employees, and a hindrance to team-building. NPR's critique spurred a 1995 regulation (published in the Aug. 23, 1995, Federal Register) giving agencies much wider latitude to design their own rating systems.
The rule opened the door to pass/fail or three-level ratings, removed roadblocks to team evaluations; allowed ratings input from co-workers and customers, as well as supervisors; and urged agencies to involve employees and unions in tailoring performance systems. Broad use of 360-degree feedback and pass/fail ratings would have been impossible without the rule.
The fuss about ratings begs one essential question: Why care about them when pay raises depend largely on locality and longevity? At minimum, you should care because anything below a "fully successful" or its equivalent could make you ineligible for within-grade raises. To garner a quality step increase, you'll need performance "significantly above that expected at the 'fully successful' level," according to the new rule. In addition, many agencies continue to base monetary awards on ratings, so the higher your rating, the more cash you might get.
Your rating also can improve your chances of surviving downsizing. During a reduction in force, your right to retain a job depends on your career status, veterans preference, length of service and performance rating. Performance ratings are credited in extra years of service-20 years for an "outstanding," 16 for an "exceeds fully successful" and 12 for "fully successful"- and the more service credit you have, the more likely you'll hang on to a job. This link with retention has many agencies thinking twice about moving to pass/fail systems in which a "pass" can be worth no more than a "fully successful," in other words, 12 years.
Finally, there still are organizations where employees still work hard just for the reward of a coveted "outstanding." In the end, ratings mean different things in different workplaces. By retooling the rating rule, the Office of Personnel Management recognized the importance of matching performance systems to organizations' cultures and priorities. Where teamwork is the focus, 360-degree feedback and pass/fail ratings may fit the bill. Organizations that esteem individual effort can keep the traditional five rating levels and offer bonuses tied to them. Agencies also can hand out awards ranging from a share of the cash saved by improved performance to extra time off.