OPM Revives Plan to Increase Role of Performance Ratings in RIFs

The notice says that of the more than 300,000 federal employees who left in 2025, RIFs accounted for only “a very small percentage”—on the order of 7 percent—with retirements, buyouts and deferred resignation offers accounting for the rest. Image: kentoh/Shutterstock.com
By: FEDweek Staff

OPM has revived and broadened a proposal from the first Trump administration to increase the role of performance ratings in determining retention in reductions in force, while downplaying the roles of length of service and veterans’ preference.

Proposed rules in the March 5 Federal Register would fundamentally change longstanding policies regarding many aspects of the federal layoff process, which involves dividing employees in affected components into groups and applying a formula for determining who is retained, who is separated and who may be reassigned to other, often lower-graded, positions.

“The proposed rule would make the RIF regulations more streamlined, efficient, and merit-based by prioritizing performance over tenure and length of service when determining which employees will be retained in a RIF and modifying the types of employees who are excluded from RIF competition,” OPM said in the notice with a 60-day comment period.

Under current policy, tenure is the first retention factor, with employees on permanent appointments who have three years of service first, those on probationary periods and others with less than three years second, and those under time-limited appointments third. Preference is next given to veterans with a compensable service-connected disability of 30 percent or more, then others with veterans status, and then non-veterans.

Next is length of actual service, with performance ratings are the last factor. The ratings for the last three years are averaged and added to actual years of service. Under the most commonly used five-level rating system, a rating of “outstanding” (Level 5) is worth 20 years, “exceeds fully successful” (Level 4) 16 years; and “fully successful” (Level 3) 12 years.

Says the notice: “Under this proposal, employees competing in a RIF will first be sorted into: their appropriate tenure group (competitive service versus excepted service); then within each tenure group, by performance in descending order based on values assigned for the employee’s three most recent ratings of record. Then, performance credits would be augmented by additional points based on veterans’ preference.”

Under the proposal, the last three performance ratings would be averaged as they are now, but on a points basis—7 for a Level 5, 5 for a level 4, and 3 for a level 3. Veterans’ preference also would be changed to a points basis, with 5 points added for a 30 percent or more service-connected disability and 3 points added for others with veterans’ status.

Any ties afterward would be broken by “tenure subgroup”—with those having at least three years of creditable service ranked higher—and then, if necessary, by length of service.

The notice mentions that DoD/DoW has used a similar arrangement in recent years under a separate authority, saying OPM “is convinced by DoD’s experience that prioritizing performance is the right approach.”

The notice also mentions separate recently proposed rules to eliminate the Level 2 “minimally successful” rating and addresses how such a change would be incorporated if finalized. However, it does not address the much broader impact of those rules, imposing a forced distribution pattern on ratings—not yet defined but potentially allowing for only 30 percent of employees to be rated at the top two levels.

Said the AFGE union, “By gutting seniority protections and handing agencies sweeping new discretion over who stays and who goes, OPM is making it easier to conduct politically motivated layoffs dressed up as ‘performance-based’ decisions. But the performance system itself is being rigged by another recent proposed OPM rule that would cap how many employees can receive high ratings, ensuring that ‘performance’ reflects not actual merit but management’s subjective preferences.”

“This rule would weaponize those ratings, making performance the dominant RIF factor, letting agencies use subjective awards to sort employees, and stripping many workers out of RIF protections entirely,” it said.

In raising the value of performance ratings over veterans preference and length of service, the rules mirror those proposed late in 2020 but not finalized before the start of the Biden administration, which withdrew them. However, the latest proposal goes farther in some ways, for example by:

* Allowing agencies to define a “competitive area” for a RIF as within the lines of “any organizational unit, or combination of organizational units, on an agency’s official organizational chart” including by field office, or by geographic location.

* Excluding from RIF procedures employees serving initial probationary periods and those are serving temporary or time-limited appointments of 1 year or less, who typically are the first to go—which would make it more likely that they could be retained. (Those serving an additional probationary period after promotion to manager or supervisor would be included in an RIF affecting those positions.)

* Excluding from the requirement to use RIF procedures for furloughs of 30 days or more any furloughs caused by funding lapses; furloughs due to agency moves to save money would remain covered.

* Ending a requirement to use RIF procedures because jobs are reclassified due to “erosion of duties” in certain circumstances.

The proposal meanwhile addresses numerous technical matters, such as situations where an employee has been under different performance ratings systems during the pertinent four years; where the employee has not had at least three formal ratings in that time; those hired under the post-secondary student hiring authority; eligibility for career transition programs and for re-employment priority; and more.

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