(a) To encourage excellence in senior executive performance, each agency must develop and administer one or more performance management systems for its senior executives.
(b) Performance management systems must provide for:
(1) Planning and communicating performance elements and requirements that are linked with strategic planning initiatives;
(2) Consulting with senior executives on the development of performance elements and requirements;
(3) Monitoring progress in accomplishing elements and requirements;
(4) At least annually, appraising each senior executive's performance against requirements using measures that balance organizational results with customer and employee perspectives; and
(5) Using performance information to adjust pay, reward, reassign, develop, and remove senior executives or make other personnel decisions.
(c)Additional system requirements
(1)Appraisal period. Each agency must establish an official performance appraisal period for which an annual summary rating must be prepared.
(i) There must be a minimum appraisal period of at least 90 days.
(ii) An agency may end the appraisal period any time after the minimum appraisal period is completed, if there is an adequate basis on which to appraise and rate the senior executive's performance.
(iii) An agency may not appraise and rate a career appointee's performance within 120 days after the beginning of a new President's term of office.
(2)Summary performance levels. Each performance management system must have at least three summary performance levels: one or more fully successful levels, a minimally satisfactory level, and an unsatisfactory level.
(3)Method for deriving summary ratings. Agencies must develop a method for deriving summary ratings from appraisals of performance against performance requirements. The method must ensure that only those employees whose performance exceeds normal expectations are rated at levels above fully successful. An agency may not prescribe a forced distribution of rating levels for senior executives.
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