OPM now requires agencies to limit the combined share of Level 4 (“Exceeds Fully Successful”) and Level 5 (“Outstanding”) ratings to no more than 40% of General Schedule employees for the current rating cycle ending September 30. This cap also applies to career Senior Executive Service employees.
OPM emphasizes that the cap is a ceiling, not a target – agencies are not required to hit 40%, only to stay below it. Still, the practical effect is clear: many employees who previously received top ratings will now fall into lower categories, even if their performance has not changed.
Why OPM Implemented the Cap
The new limit stems from OPM’s broader overhaul of federal performance management, which includes eliminating the long‑standing prohibition on forced distribution. The administration argues that too many employees have historically been rated at the highest levels, creating ratings inflation and reducing meaningful distinctions in performance.
By standardizing rating distributions, OPM aims to:
- Reinforce accountability
- Increase consistency across agencies
- Ensure that top ratings reflect truly exceptional performance
This shift aligns with the administration’s stated goal of promoting a “high‑performance workplace culture.”
Open Season Countdown: Prepare Before the Rush
Impact on Federal Employees
The most immediate effect is that fewer employees will receive the highest ratings, regardless of agency culture or historical patterns. Supervisors who previously rated large portions of their workforce at Level 4 or 5 will now be required to adjust ratings downward to comply with the cap.
For employees, this means:
- Reduced access to bonuses and awards, which are often tied to top ratings
- Slower progression for those seeking quality step increases
- Greater competition for the limited number of top ratings available
- Potential morale challenges, especially in high‑performing teams where many employees previously earned top marks
OPM argues that a smaller pool of high performers will allow agencies to provide larger bonuses to those who do earn the top ratings.
Agency Responsibilities
Agencies must now:
- Apply the 40% cap across their entire GS workforce
- Ensure compliance during the rating cycle
- Adjust internal performance management policies to align with OPM’s standardized distribution rules
These requirements follow OPM’s finalized regulations authorizing forced – or “standardized” – distribution patterns across the federal workforce.
Cumulative Ratings
OPM frames the change as a move toward fairness and accountability; many employees and managers will have to adjust their expectations, and morale may suffer as a consequence.
As agencies implement the cap, federal employees should prepare for a more competitive ratings environment where performance distinctions carry greater weight.
This really isn’t anything new. As a manager at the Federal Aviation Administration for many years, I saw Washington headquarters limit the number of outstanding and exceptional performance awards managers could give employees every year. The more things change, the more they tend to stay the same.
