Office of Personnel Management Director John Berry sent a June 8 memorandum to agency heads reiterating that within-grade increases, or step increases, should not be given to employees with performance ratings below "fully successful" or the equivalent.
"The payment of within-grade increases should never be viewed as automatic or routine," Berry wrote in the memo.
There are 10 steps within each General Schedule grade. Step increases are periodic boosts in a GS employee's rate of basic pay from one step of the grade within a position to the next higher step of that grade.
The two-year pay freeze on federal employees does not affect step increases, or performance-based bonuses, which some lawmakers view as a loophole. The House in May passed legislation that would eliminate pay raises for poor-performing federal employees.