[Material transmitted]{.underline}

Instruction 430-4, Employee Performance Management System: Performance
Appraisal (pages 1-25)

Exhibit 430-4-A, Employees Excluded from the Requirements of this
instruction (page A-1)

Exhibit 430-4-B, Delegation of Authorities for Performance Appraisal
Provisions Under the Employee Performance Management System (EPMS)
(pages B-1 and B-2 )

Exhibit 430-4-C, Summary Ratings and Ratings of Record (pages C-1 and
C-2)

Exhibit 430-4-D, Office of Personnel Management Letter of Approval of
Department\'s Performance Management System Plans (page D-l)

[Material superseded]{.underline}

Instruction 430-4, Department Employee Performance Management System
(page 1-13: 81.4, 82.7, and 85.15)

Exhibit 430-4-A, Employees Excluded from the Requirements of this
Instruction (page 1: 81.4)

Exhibit 430-4-B, Department Employee Performance Management System:
Performance Appraisal Summary Data (pages 1-3: 81.4)

Exhibit 430-4-C, Delegation of Authority to Take Certain Actions to
Manage Employee Performance (pages 1-2: 81.8)

Exhibit 430-4-D, Letter from the Office of Personnel Management dated
March 31, 1981 (pages 1-2: 85.15)

[Background]{.underline}

Instruction 430-4 publishes Department policies and procedures on the
planning, reviewing, and appraising of the performance of all employees
except Senior Executive Service, PMRS personnel, and other designated
exclusions. The policies and procedures are a result of new regulations
published March 11, 1986 at pages 8396-8425 of the Federal Register and
represent extensive changes from the Instruction to be superseded.

This Instruction is effective January 1, 1987 if the calendar year
appraisal cycle is used, or October 1, 1987 if the fiscal year appraisal
cycle is used. However, changes in conditions of employment for
bargaining unit employees must be implemented consistent with 5 U.S.C.
Chapter 71 and provisions of negotiated agreements.

Distribution: MS(PERS):HRCF-001

[Filing instructions]{.underline}

File new materials. Change Table of Contents (Instruction O02-1) for the
Personnel Manual to reflect change. Post receipt of this transmittal to
the HHS Check List of Transmittals and file this transmittal in
sequential order after the checklist.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Thomas S. McFee

Assistant Secretary for

Personnel Administration

Subject: EMPLOYEE PERORMANCE MANAGEMENT SYSTEM: PERFORMANCE APPRAISAL

430-4-00 Purpose and Authority

01 Coverage

20 References

30 Definitions

40 Basic Responsibilities

50 Appraisal year and Appraisal Period

60 Planning Performance and Communicating Performance Expectations

70 Conducting Progress Reviews and Updating Performance Plans

80 Rating Performance

90 Using Performance Ratings

100 Orientation and Training

110 Forms and Recordkeeping

120 Evaluation

130 Exceptions to Policies

Exhibit 430-4-A Employees Excluded from the Requirements of this
Instruction

Exhibit 430-4-B Delegation of Authorities for Performance Appraisal
Provisions Under the Employee Performance Management System

Exhibit 430-4-C Summary Ratings and Ratings of Record

Exhibit 430-4-D Office of Personnel Management Letter of Approval of
Department\'s Performance Management System Plans

[470-4-00]{.underline} PURPOSE AND AUTHORITY

A.  This Instruction states the policies, requirements, and
    recommendations that govern performance appraisal for employees
    under the Employee Performance Management System (EPMS). This
    Instruction incorporates by reference the statutory authorities and
    the regulations established by the Office of Personnel Management
    (OPM). This Instruction is also part of the Department\'s
    Performance Management System Plans approved by OPM.

    The purpose of performance appraisal of EPMS employees in the
    Department is:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Responsible office: Division of Pay and Performance Programs, Office of
the Assistant Secretary for Personnel Administration, HHS (FTS 475-0087)

(430-4-00B continued)

1.  To improve individual and organizational effectiveness through the
    integration of the performance planning, review, and appraisal
    process with basic management functions; and,

2.  To be used to execute basic management and supervisory
    responsibilities, to communicate goals and objectives, to identify
    individual accountability, to evaluate and improve individual and
    organizational accomplishments, and to base personnel actions on
    appraisal results.

[430-4-10]{.underline} COVERAGE

This Instruction covers all General Schedule and prevailing rate
employees in the competitive and excepted services within the Department
except those in the following categories:

A.  The Senior Executive Service, and GS-16-18 and equivalents;

    Supervisors and management officials, GM-13 through 15, who are
    covered by the Performance Management and Precognition System;

    Employees excluded under 5 U.S.C. 4301 ; and

    Certain other employees (see Exhibit 430-4-A).

[430-4-20]{.underline} REFERENCES

A.  U.S. Code, Chapter 43 (performance appraisal)

    CFR Parts 293, 430 \[Sections 101, 201(a), and 501\], 451
    (Section 101) and 531 (Sections 401 and 501) and corresponding HHS
    Instructions

[430-4-30]{.underline} DEFINITIONS

A.  [\"Appraisal\"]{.underline} means the act or process of reviewing
    and evaluating the performance of an employee against the described
    performance standard(s).

    [\"Appraisal period\"]{.underline} means the period of time
    established by an appraisal system for which an employee\'s
    performance will be reviewed.

    [\"Appraisal system\"]{.underline} means a performance appraisal
    system established by an agency or component of an agency under
    subchapter I of chapter 43 of title 5, U.S.C., and 5 CFR, Subpart
    430.201, which provides for identification of critical and
    noncritical elements, establishment of

    (430-4-30C continued)\
    \
    performance standards, communication of elements and standards to
    employees, establishment of methods and procedures to appraise
    performance against established standards, and appropriate use of
    appraisal information in making personnel decisions.

    [\"Appraisal year\"]{.underline} means the annual appraisal cycle,
    October 1 to September 30 or a calendar year cycle if approved by
    ASPER (see 430-4-50A).

    [\"Appraising official\"]{.underline} means the supervising official
    who is ordinarily the employee\'s immediate supervisor and does the
    initial rating of the employee\'s performance.

    [\"Critical element\"]{.underline} means a component of a position
    that consists of one or more duties and responsibilities that
    contribute toward accomplishing organizational goals and objectives
    and is of such importance that unacceptable performance on the
    element would result in unacceptable performance in the position.

    [\"Manner of Performance\"]{.underline} means the way an employee
    behaves or acts on the job in order to produce results and is one of
    the two basic parts of performance (the results are the other part).
    While not as important as results, manner of performance is
    important enough to be represented in a performance plan and rating.
    For instance, an employee might have produced a good report (result)
    but forgot to coordinate its release with another office. Standards
    (see definition of \"Performance Standards\") for appraising manner
    of performance describe behaviors or actions involving work
    relationships, like the example just mentioned, personal or
    technical work habits (e.g., actions which reflect initiative or
    resourcefulness), and any other job element or part of it in which
    manner of performance needs to be included.

    [\"Non-critical element\"]{.underline} means a component of an
    employee\'s position that does not meet the definition of a critical
    element but is of sufficient importance to warrant written
    appraisal.

    [\"Performance\"]{.underline} means an employee\'s accomplishment of
    assigned work as specified in the critical and non-critical elements
    of the employee\'s position. The Department also views performance
    as having two parts, manner (see 430-4-G) and results (see 430-4-Q).

    [\"Performance Appraisal System\"]{.underline} (see Appraisal
    System! .

    [\"Performance Management Plan\"]{.underline} means the description
    of the Department's methods that integrate performance, pay, and
    awards systems

    (430-4-30K continued)\
    \
    with its basic management functions for the purpose of improving
    individual and organizational effectiveness in the accomplishment of
    agency mission and goals.

    [\"Performance plan\"]{.underline} means the aggregation of all of
    an employee\'s written critical and non-critical elements and
    performance standard(s).

    [\"Performance standard\"]{.underline} means a statement of the
    expectations or requirements established by management for a
    critical or non-critical element at a particular rating level. A
    performance standard may include, but is not limited to, factors
    such as quality, quantity, timeliness, and manner of performance.

    [\"Progress review\"]{.underline} means a review of the employee\'s
    progress toward achieving the performance standards and is not
    itself a rating.

    [\"Rating\"]{.underline} see Summary Rating.

    [\"Rating of record"]{.underline} means the summary rating required
    at the time specified in this Instruction or at such other times as
    it specifies for special circumstances. There is ordinarily only one
    rating of record in an appraisal year (see Exhibit 430-4-C for an
    exception), and it is usually required at the end of the appraisal
    year (see 430-4-80B.2 for an exception). A rating of record will
    ordinarily reflect as many summary ratings as were made during the
    appraisal year (see 430-4-90A for exceptions).

    [\"Result\"]{.underline} means any output produced by the employee
    and is the more important of the two basic parts of performance
    (manner of performance is-the other part). An example of a result
    would be a written report. Standards (see definition of
    \"performance Standard\") for appraising results usually include
    indicators of quality, quantity and timeliness. For example, an
    indicator of quality of a report would be its degree of technical
    perfection.

    [\"Reviewing Official\"]{.underline} means an official with review
    and approval authority at a level higher in the organization than
    that of the appraising official. Reviewing officials are ordinarily
    two supervisory levels above the employee. (For approval of ratings
    of record that are the basis for proposing a performance award., the
    official with final approval authority must be the official
    responsible for managing the performance awards budget.)

    [\"Summary Rating\"]{.underline} means the written record of the
    appraisal of each critical and non-critical element and the
    assignment of a summary rating level. Not all summary ratings are
    ratings of record, but all ratings of record are summary ratings.

[430-4-40]{.underline} BASIC RESPONSIBILITIES

A.  The Assistant Secretary for Personnel Administration shall:

    1.  Establish requirements for appraisal systems developed within
        the Department for EPMS employees;

        Delegate authority to establish and implement appraisal systems
        (See delegation in Exhibit 430-4-B);

        Consult with national unions which have consultation rights, as
        appropriate.

        Review, approve, and submit to OPM for approval any proposed
        exceptions to the required provisions in this Instruction;

        Provide guidance and advice; and

        Monitor and evaluate the effectiveness of the appraisal systems.

    Heads of OPDIVs, including the Assistant Secretary for Management
    Budget for the Office of the Secretary, shall:

    1.  Determine the specific appraisal system configuration to be used
        within their organizations; obtain ASPER approval of any
        proposed exceptions to the Department\'s requirements; and,
        through ASPER, obtain OPM approval of such exceptions;

        Establish procedures to implement and administer the systems,
        assuring that performance plans, progress reviews, summary
        ratings, performance-related actions, such as awards are done on
        time; that required records are maintained; and that the systems
        are administered equitably;

        Provide orientation and training for supervisors and employees
        in the purpose and procedures of the systems;

        Integrate the performance appraisal system into an overall
        performance management system and other management systems in
        the organization;

        Assure that Administration, Department, and organizational goals
        and objectives are reflected in appropriate performance plans;\
        \
        \
        \
        \
        \
        \
        (430-4-40B continued)

        Provide positive, timely reinforcement to those managers and
        supervisors who are effective in managing employees\'
        performance, who deal effectively with employees who meet and
        exceed performance standards, and who take action with those who
        do not;

        Deal appropriately with managers and supervisors who are not
        effective in managing their employee\'s performance.

        Fulfill any bargaining obligations with exclusively recognized
        unions.

        Monitor and evaluate the appraisal systems as they are
        administered, taking appropriate action to insure changes where
        needed and securing approval where required for the changes; and

        Provide copies of systems and related guidance to all Regional
        Personnel Offices (RPOs), which service employees covered by the
        systems.

    Servicing Personnel Officers shall:

    1.  Provide training as requested and needed;

        Establish procedures to assure that managers and supervisors
        complete EPMS performance plans, progress reviews, and summary
        ratings when they are due;

        Maintain files of all required performance documents in
        accordance with HHS Instruction 293-3 and enter all necessary
        data into the Department\'s personnel/payroll system;

        Transfer all performance documents for transferring, or
        separating employees; and

        Actively support managers and supervisors by providing guidance
        and assistance as necessary or as requested.

    Appraising officials shall:

    1.  Prepare performance plans for employees, encouraging their
        participation in the process as appropriate;

        Secure the approval of employee performance plans from approving
        officials;

    (430-4-40D continued)

    1.  Provide performance plans for employees on internal details and
        temporary promotions and, when feasible, for external details
        and assignments;

        Monitor performance to clarify expectations, identify progress
        and problems, conduct and document progress review(s), modify
        performance plans when warranted, secure approval of
        modifications when required, and maintain whatever records are
        necessary;

        Whenever performance ratings are required, rate employee\'s
        performance in comparison to their performance plans;

        For ratings of record, take into consideration any earlier
        ratings during the appraisal period;

        Secure approval of ratings of record where required;

        Communicate approved ratings of record and any other ratings
        during the appraisal period to employees and furnish them with
        signed copies;

        Take appropriate action with subordinates whose performance is
        Fully Successful or better (e.g., recommending performance
        awards or other forms of recognition);

        Take appropriate action with subordinates whose performance is
        less than Fully Successful including assisting them in improving
        their performance and providing them with a reasonable
        opportunity to demonstrate Fully Successful performance; and

        Maintain records and submit relevant forms and other material as
        required.

    Reviewing officials shall:

    1.  Review and approve employee performance plans;

        Review and approve changes in elements or standards where
        required;

        Review and approve ratings of record, documenting any changes;
        and

        Secure approval of ratings of record and award determinations
        from the official who manages the performance awards budget.

    (430-4-40 continued)

    Employees shall:

    1.  As required, participate in the development of their perfomance
        plans;

        Perform against expectations in their performance plans to the
        best of their abilities;

        Advise their supervisors of changes in circumstances or
        conditions that may affect performance; and

        Review their own performance in preparation for meetings with
        supervisors to discuss progress and document performance.

[430-4-50]{.underline} APPRAISAL YEAR AND APPRAISAL PERIOD

A.  The appraisal year is based on the fiscal year - October 1 to
    September 30. OPDIVs may request approval from ASPER for a calendar
    year cycle. There can be one or more appraisal periods during the
    appraisal year, but the minimum appraisal period shall never be less
    than 120 days unless a rating is transferred from an outside agency
    that has a minimum period of a different length under a Plan that
    was approved by OPM.

    The time period covered by any particular summary rating begins when
    the employee is given the written, final performance plan.

    Ratings of record will normally be prepared as soon as practical
    after the end of the appraisal year except in special circumstances
    (see 430-4-80B.2 and Exhibit 430-4-C, page 1, item 1). Summary
    ratings that are not ratings of record will be prepared as soon as
    practical following the end of their appraisal periods.

[430-4-60]{.underline} PLANNING PERFORMANCE AND COMMUNICATING
PERFORMANCE EXPECTATIONS

A.  The Planning Process

    1.  Preferably at the beginning of the appraisal period, but
        normally no later than 30 days afterwards, written, final
        performance plans will be given to all employees.

        Key activities usually carried out in the development of
        performance plans include (but need not be limited to):
        reviewing the employee\' s official duties and responsibilities
        and the tasks needed to carry them out, reviewing organizational
        goals and objectives, and reviewing the employee\'s current
        accomplishments and immediate goals for the future.

    (430-4-60A continued)

    1.  While final authority for establishing performance plans rests
        with the appraising officials, there should be joint
        participation of the employee and the appraising official in
        developing the plan. How an employee participates in the process
        may vary including, but not limited to, the following
        variations:

        a.  Employee and supervisor discuss and develop the plan
            together;

            Employee provides to supervisor a draft plan;

            Employee comments on draft plan prepared by supervisor; or

            Plan is drafted by a group of employees occupying similar
            positions, with supervisor\'s approval.

        Before a plan can become final, it must be reviewed and approved
        by an official (i.e., the reviewing official) at a higher level
        in the organization than the appraising official except for the
        situation listed in 430-4-80A.lla. (NOTE: The \"organization\"
        means here SSA, HCFA, FSA, each health agency in PHS and each
        Staff Division in OS). Following the review, including the
        making of any adjustments, the reviewing official should explain
        any changes and must sign, date, and return the plan to the
        appraising official. The appraising official, in turn, must sign
        and date the plan and give a copy to the employee. Also, the
        appraising official should explain any changes made by the
        reviewing official and retain a copy.

        The employee should sign and date the final plan upon receiving
        it, which signifies only that the employee has received a copy
        of it. If the employee declines to sign, the appraising official
        must note this in the plan and the date the employee was given a
        copy.

    Performance Plans in Non-Standard Situations

    1.  For permanent position changes during the appraisal year, a
        performance plan must be developed for each position occupied if
        days or more remain in the appraisal year, including extended
        appraisal years when required (see 430-4-8CB.2). If less than
        120 days remain and extension is precluded, the development of a
        plan is optional, although encouraged. The intent here is for
        employees to know what is expected of them even when a summary
        rating is precluded.

    (430-4-60B continued)

    1.  For details, temporary promotions, and IPA assignments expected
        to last 120 days or longer and to end on or before the appraisal
        year:

        a.  If the assignment is within the Department, a separate
            performance plan covering the assignment must be developed
            and given to the employee as soon as possible, but no later
            than calendar days after the beginning of the assignment
            (whenever possible, performance plans should be put into
            effect on the effective date of the assignment in order to
            allow for no less than the minimum appraisal period of 120
            days) .

            If the assignment is outside the Department, the supervisor
            of record must make a reasonable effort to see that the
            employee is given a separate performance plan.

            The performance plan for the position of record must either
            be closed or kept open depending on when the employee
            returns and whether the plan remains applicable. Closing a
            plan means either preparing a summary rating based on the
            plan if the minimum appraisal period was met or inactivating
            the plan if a summary rating based on it is not possible.
            Keeping a plan open means allowing for the employee to
            resume performance under it until a summary rating is due
            (assuming the plan remains applicable).

        For details, temporary promotions, and IPA assignments expected.
        to last 120 days or longer and the first 120 days to overlap two
        appraisal years:

        a.  A separate performance plan overlapping the two years must
            be developed and given to the employee (or a reasonable
            effort to see that it happens must be made by the supervisor
            of record if the assignment is outside the Department).

            The performance plan for the position of record must be
            closed (assuming the assignment does overlap the appraisal
            years).

        For details, temporary promotions, and IPA assignments expected
        to last less than 120 days.

        a.  A separate performance plan covering the assignment is
            optional unless the employee cannot be rated based on a
            performance plan within the Department for the appraisal
            year in which the assignment started but is expected to
            serve the minimum appraisal period in an outside agency for
            which the

    (430-4-60B.4a continued)\
    \
    period is less than 120 days. If this situation occurs, the
    supervisor of record must make a reasonable effort to see that a
    separate plan is developed and given to the employee.

    a.  The performance plan for the position of record must either be
        closed or kept open depending on when the employee returns and
        whether the plan remains applicable.

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    1.  All performance plans developed within the Department for the
        non-standard situations described above and any others must also
        meet the requirements of 430-4-60A and 430-4-60C.

    Content of Performance Plans

    1.  Employee performance plans [must]{.underline} contain one or
        more critical elements that meet the definition given in
        430-4-30F. Critical elements must be based on the requirements
        of the employee\'s position and need to reflect appropriate
        organizational objectives toward which the employee can be
        expected to contribute results.

        Employee performance plans [may]{.underline} also contain one or
        more non-critical job elements that meet the definition given in
        430-4-30H (if just one critical element is used, one or more
        non-critical elements must be included). Non-critical elements
        must also be based on the requirements of the employee\' s
        position.

        More weight must be given both individually and collectively to
        critical elements than to non-critical elements in deriving the
        summary rating. For example, a plan with four critical elements,
        each with a weight of 15 (for a total of 60), and with four
        non-critical elements, each with a weight of 10 (for a total of
        40),would meet this requirement.

        It is Department policy not to mandate Departmentwide inclusion
        of particular job elements in each and every employee\'s
        performance plan because job responsibilties and circumstances
        vary among positions.

        There must be five different levels for rating performance on
        each job element. Intermediate levels or fractional values
        (e.g., 4.5) must not be used. The names of the levels and their
        definitions are these:

        a.  [Outstanding:]{.underline} Outstanding performance is the
            highest level of performance. If this level of performance
            occurs, its very nature makes it stand out above performance
            that should be rated Excellent. For performance to be rated
            Outstanding on a critical element, the performance must be
            of a rare

    (430-4-60C.5a continued)\
    \
    nature. Performance on a critical element should not be rated
    Outstanding solely on the basis of quantity or timeliness criteria.

    a.  [Excellent:]{.underline} Performance rated Excellent is one
        level above performance rated Fully Successful. Excellent
        performance is distinctive, although it does not stand out like
        performance at the highest level. Performance rated Excellent
        clearly exceeded one or more of the requirements in the Fully
        Successful standard and fully met the remaining ones.

        [Fully Successful:]{.underline} The Fully Successful level is
        the level of performance needed to accomplish the job element
        completely by fully meeting all of the requirements specified in
        the Fully Successful standard. Fully Successful performance is
        essential and important to the Department because organizational
        goals and objectives cannot be attained efficiently and
        effectively unless the job elements in employee performance
        plans are fully met.

        Marginally Successful: Performance rated Margina1ly Successful
        is one level below performance rated Fully Successful.
        Marginally Successful performance means the requirements in the
        Fully Successful standard were only partially met or were met
        fully only through unusually close supervision and assistance
        required because of deficiencies in the employee\'s performance.

        Unacceptable: Unacceptable performance is the lowest level of
        performance. Performance is rated Unacceptable when it did not
        meet the requirements in the Fully Successful standard even in a
        marginally successful way.

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    1.  The names and definitions above must be used Departmentwide and
        must be made available to employees.

        A performance standard based on requirements of the employee\'s
        position must be written at the Fully Successful level for
        rating performance on each job element in the plan. To the
        maximum extent feasible, this standard must be:

        a.  Objective, i.e., free from personal feelings or opinions
            that might bias the rating of actual performance;

            Explicit, i.e., clearly written and free of ambiguities;

            (430-4-60C.7 continued)

            Observable or measurable, i.e., specifies discernible
            conditions, characteristics, and the like that allow for
            differentiating between levels of performance; and

            Attainable, i.e., barring unexpected circumstances beyond
            the employee\'s control, the expectations will most likely
            be met because they are commensurate with the level of the
            employee\'s job responsibility and with what would-be
            typically expected of employees occupying similar positions.
            Thus this standard must be neither too easy nor too
            difficult but instead state what is normally expected in
            order for the job element to be fully met.

        The Fully Successful standard for each critical element must
        refer to a requirement for some result. The quality of the
        result needed (see 430-4-30Q) must be specified in at least one
        critical element.

        Manner of performance (see 430-4-30G) must be included in the
        Fully-Successful standard for one or more critical or
        non-critical elements.

        The provision of performance standards at the other levels,
        particularly just above and below the Fully Successful level, is
        encouraged but not required. However, if an employee\' s
        performance is determined to be Unacceptable on one or more
        critical elements, a performance standard at the Marginally
        Successful level must be written and given to the employee at
        the beginning of the opportunity period (see 430-4-90A.2).

[430-4-70]{.underline} CONDUCTING PROGRESS REVIEWS AND UPDATING
PERFORMANCE PLANS

A.  A formal progress review must be held with the employee at least
    once about mid-way through the period covered by the employee\'s
    performance plan. The formal progress review, which should normally
    include a face to face meeting, must:

    1.  Provide for and document an assessment of progress in
        performance relative to the job elements and performance
        standards in the performance plan, any problems encountered or
        anticipated, and any corrective actions taken or warranted; and

        Provide for and document any changes in the performance plan due
        to changes in work assignments or to unanticipated changes in
        the work situation, including those beyond the control of the
        subordinate.

    (430-4-70 continued)

    Both supervisor and subordinate must sign and date a copy of the
    progress review. If the employee declines to sign and date it, the
    supervisor must note this on the progress review and indicate the
    employee was given a copy.

    Updating Performance Plans

    1.  Performance plans may be changed as warranted during the
        appraisal period. Any additions or modifications to the original
        job elements or performance standards made in the plan must be
        initialed and dated by the supervisor and also by the employee,
        and a copy must be given to the employee.

        Anytime during the appraisal period a substantive change like
        adding new elements and standards is made, the change must be
        approved (initialled and dated) by the reviewing official except
        for the situation listed in 430-4-80A.11a. Any changes made
        during the last 120 days of the appraisal period must be
        approved (initialled and dated) by the reviewing official except
        for the situation listed in 430-4-80A.lla.

        If a plan is revised to include new elements and standards, they
        become effective at the time they are given to the employee. The
        employee must not be rated on an \"entirely new element that has
        been in effect less than 120 days or on an element that has been
        deleted before being in effect for 120 days.

[430-4-80]{.underline} RATING PERFORMANCE

A.  The Rating Process

    1.  Before rating an employee\'s performance, the supervisor should
        assemble and review, wherever possible, documentation on the
        employee\' s performance for the period. In this process, the
        supervisor should determine from the employee if there is any
        additional relevant information that should be considered.

        The supervisor must rate the employee\'s performance on each job
        element in the employee\'s official performance plan on which
        the employee has had a chance to perform. The rating must be
        done by comparing the employee\'s performance to the written
        standard for the element. The absence of a written standard at a
        given level, however, shall not preclude the assignment of a
        rating at that level.

    (430-4-80A continued)

    1.  If the performance is determined to be Fully Successful or one
        level above it (\"Excellent\"), the supervisor must indicate
        that rating level on the form but is not required to describe
        the actual performance.

        If the performance is determined to be at any one of the other
        levels, the supervisor must both indicate the rating level and
        describe in sufficient detail on the form the actual performance
        to show how it compares to the relevant standard. If performance
        accomplishments are documented elsewhere (e.g. in production
        reports), only the source document need be cited.

        Five summary rating levels must be used Departmentwide:\
        \
        5 - Outstanding\
        \
        4 - Excellent\
        \
        3 - Fully Successful\
        \
        2 - Marginally Successful\
        \
        1 - Unacceptable

        Summary ratings may be derived through scoring or through using
        operational definitions. Either procedure must conform to the
        following requirements:

        a.  The procedure must not require an employee to be rated
            Outstanding on all elements in order to be given a summary
            rating of Outstanding.

            A summary rating of Marginally Successful must be applied to
            any employee who is rated Marginally Successful on one or
            more critical elements regardless of performance on the
            other elements.

            A summary rating of Unacceptable must be applied to any
            employee who is rated Unacceptable on one or more critical
            elements regardless of performance on the other elements.

            The procedure must ensure that more weight is given
            individually and collectively to critical elements than to
            non-critical elements.

        A scoring procedure is preferred and encouraged because its use
        of elements weights is helpful in developing and carrying out
        the performance plan and because no interpretation is required
        to produce the score.

    (430-4-80A continued)

    1.  If scoring is used, the procedure must be the same for all EPMS
        employees in an OPDIV or health agency. Additionally, the
        individual job elements must be given weights as part of the
        approved performance plan, the weights must be used as
        multipliers of the performance rating levels for the elements,
        and the products must be summed to give a summary rating score.
        Each summary score must then be put into one of the five.
        summary rating levels with each level of scores representing a
        higher level of summary performance than levels of scores below
        it.

        If scoring is not used, the following operational definitions
        based on the [critical]{.underline} elements must be used
        Departmentwide:\
        \
        Outstanding: Rated Outstanding on all but one critical element
        and no less than Excellent on the remaining one. If just one
        critical element is used, must be rated Outstanding on that
        element.\
        \
        Excellent: Rated no less than Excellent on all critical
        elements.\
        \
        Fully Successful: Rated no less than Fully Successful on all
        critical elements.\
        \
        Marginally Successful: Rated Marginally Successful on one or
        more critical elements regardless of ratings on any other
        elements.\
        \
        Unacceptable: Rated Unacceptable on one or more critical
        elements regardless of ratings on any other elements.\
        \
        If there are non-critical elements, ratings on them must also be
        considered in deriving a summary rating. It is suggested that an
        initial rating be derived based just on the critical elements.
        Then, the initial rating should be adjusted, if appropriate,
        based on the non-critical element ratings.\
        \
        In arriving at the summary rating based on both critical and
        non-critical elements, the appraising official must ensure that
        the summary rating conforms to the definitions immediately above
        and to the requirements in 430-4-80A.6.

        There must be [no]{.underline} management action, such as
        prescribing a fixed distribution of ratings, which prevents a
        fair rating of performance in relation to the performance
        standards. However,

    (430-4-80A. 10 continued)\
    \
    there must be procedures established, such as reviews of standards
    and ratings for difficulty and strictness of application, to ensure
    that only those employees whose performance exceeds normal
    expectations are rated at levels above Fully Successful.

    1.  With the exception listed in subsection a below, ratings of
        record and performance-based personnel actions shall be reviewed
        and approved by an official (i.e., the reviewing official) at a
        higher level in the organization than the appraising official.
        Ratings of record must be issued in writing and given to
        employees as soon as practicable after the end of the appraisal
        year but may not be communicated to employees prior to
        approvalby the final reviewer. This does not preclude
        communication about appraisal of performance between a
        supervisor and an employee prior to the determination of the
        rating of record. With the exceptions listed in subsections b
        and c below, ratings of record must also be approved by the
        official with the responsibility for managing the performance
        awards budget.

        a.  Situations in which the official immediately shove the
            appraising official is outside the health agency, the OPDIV,
            or the Staff Division in 0S;

            Situations in which the rating of record is prepared
            [only]{.underline} for WIGI determination; or

            Situations in which awards are not proposed based on the
            rating of record.

        Any summary rating made for an appraisal period during the
        appraisal year must also be issued in writing, signed at least
        by the appraising official, and given to employees as soon as
        practical. Higher level review of a summary rating is not
        required if that rating is not the rating of record.

        Employees who wish to comment on their summary ratings may
        record their comments on the form itself or as an attachment to
        it.

        Employees who disagree with their ratings of record and wish to
        file a grievance may do so in accordance with HHS Personnel
        Instruction 771-3 or an applicable negotiated grievance
        procedure. Summary ratings that are not ratings of record are
        also grievable.

    (430-4-80 continued)

    Summary Ratings in Certain Circumstances (see also Chart 1 in
    Exhibit 430-4-C)

    1.  An employee is considered to be rateable during an appraisal
        year if he or she has performed under at least one EPMS or PMRS
        performance plan covering 120 days or more during that year.

        If an employee would otherwise be unrateable for an appraisal
        year, the year must be extended until 120 days are reached, and
        a rating of record must be prepared at the end of the extended
        year. The year must not be extended if any rating was made
        earlier in the year for another EPMS or PMRS position.

        If an employee permanently changes positions during the
        appraisal year and has performed under a performance plan for at
        least 120 days in the previous position, the employee\'s
        performance in that position must be rated. This summary rating
        and any other summary ratings given throughout the appraisal
        year must also be taken into consideration in deriving the
        rating of record for the appraisal year (lack of any rating,
        however, will not invalidate the rating of record based on the
        other rating\[s\]).

        If an employee is detailed or temporarily promoted to another
        position within the Department and is issued a written approved
        plan of elements and standards covering 120 days or longer in
        that position, the employee\'s performance on the critical
        elements (and non-critical elements if in the plan) established
        for that position must be rated and a summary rating prepared.
        This summary rating along with any other applicable summary
        ratings, if one can be prepared for the position of record) must
        be considered in deriving the employee\'s next rating of record.

        If an employee, after having served 120 days or longer under a
        performance plan in the Department, goes on a detail or IPA
        assignment outside the Department, the employee must be given a
        summary rating for the position of record when the summary
        rating is due. Also, a reasonable effort must be made to obtain
        appraisal information from the outside agency based on the
        separate performance plan if applicable for the assignment. If
        the information is obtained, a summary rating must be prepared
        by the supervisor of record and must be considered in deriving
        the employee\'s next rating of record.

        If an employee has not served under a performance plan in the
        Department for 120 days or longer in the appraisal year before
        going on an outside detail or IPA but has served for the minimum
        appraisal period of and in the outside agency, the supervisor of
        record must make a reasonable effort to prepare a summary rating

    (430-4-80B.6 continued)\
    \
    based on the separate performance plan for the assignment and
    appraisal information obtained from the outside agency. If prepared,
    the summary rating must be considered in deriving the employee\'s
    next rating of record.

    1.  When details, temporary promotions, and IPA assignments meeting
        or exceeding the minimum appraisal period overlap two appraisal
        years, the appraisal year to which the summary rating for the
        assignment applies depends on whether the employee would
        otherwise be unrateable for the appraisal year in which the
        assignment started:

        a.  If unrateable, the summary rating becomes the rating of
            record for the first appraisal year extended.

            If rateable, the summary rating applies to the second
            appraisal year.

        When an employee moves to a different organization in the
        Department or to a federal agency outside the Department at any
        time during the Department\'s appraisal year, the current
        performance ratings of record must be transferred as required in
        5 CFR Part 293, including the summary rating that must be made
        at the time of the position change if the performance plan was
        in effect for at least 120 days. For moves within the
        Department, this last summary rating must be taken into
        consideration when preparing the rating of record for that
        appraisal year.

        When an employee moves into the Department from a federal agency
        outside the Department at any time during the Department\'s
        appraisal year, the summary rating prepared at the time of the
        transfer and forwarded by the outside agency must be taken into
        consideration when preparing the rating of record for that
        appraisal year.

        If there is a new supervisor while the employee remains in the
        same position, the leaving supervisor should provide, in
        writing, information about the employee\'s performance up to the
        time of the change so that the information can be considered in
        preparing a summary rating when it is due.

        The method used for deriving the rating of record from multiple
        summary ratings must be documented on the rating of record. Only
        EPMS or PMRS summary ratings are to be considered in deriving
        the EPMS rating of record for the employee.

    (430-4-80B continued)

    1.  The performance appraisal and resulting rating of a disabled
        veteran may not be lowered because the veteran has been absent
        from work to seek medical treatment as provided in Executive
        Order 5396.

[430-4-90]{.underline} USING PERFORMANCE RATINGS

A.  Actions Based on Less-Than-Fully Successful Performance

    1.  An employee given a summary rating below Fully Successful must
        be provided assistance in an effort to raise the performance to
        the Fully Successful level. Such assistance may include but is
        not limited to: formal training, on-the-job training,
        counseling, and closer supervision. Supervisors are encouraged
        not to delay giving assistance until the rating is made.

        Except with respect to employees occupying positions in Schedule
        C as authorized by 5 CFR Section 213.3301, the following
        requirements must be followed if an employee\'s performance is
        determined to be Unacceptable any time during or at the end of
        the appraisal year:

        a.  The employee must be given written notice that states:

            0.  \(1\) His or her performance is at the Unacceptable
                level

                \(2\) The critical element(s) on which the employee\'s
                performance is Unacceptable

                \(3\) How the employee\'s performance is Unacceptable

                \(4\) The performance standard(s) that must be reached
                in order to be retained (i.e., the Marginally Successful
                level)

                \(5\) The specific assistance or at least a summary of
                the specific assistance (e.g., formal training,
                on-the-job training, counseling, and closer supervision,
                or a combination of the foregoing) that will be given to
                help the employee improve his or her performance (It is
                recommended that this written plan of assistance be made
                part of the written notification. However, it may be
                given to the employee separately)

                \(6\) A specific period of time (it is preferable to
                state dates) in which the employee must perform at least
                at the Marginally Successful level on the critical
                element(s) for which the employee\'s performance was
                Unacceptable.

    (430-4-90A.2a continued)\
    \
    (The period of time must be sufficient to provide the employee with
    a reasonable opportunity to demonstrate acceptable performance)

    0.  \(7\) That if at the conclusion of the opportunity period the
        employee\'s performance is at the Marginally Successful level
        but not at the Fully Successful level on the critical element(s)
        identified above in section 2a.(2), the employee may be
        reassigned

        \(8\) That if at the conclusion of the opportunity period the
        employee\'s performance is still Unacceptable on the critical
        element(s) identified above in section 2a.(2), action must be
        initiated to reassign, reduce in grade, or remove the employee

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    a.  The written notice required above in section 2a must not be in
        the form of a summary rating unless the determination is made at
        the end of the appraisal year.

        The assistance and opportunity period specified in the written
        notice required above in section 2a must be provided to the
        employee.

        If at the conclusion of the opportunity period the employee\'s
        performance is at least at the Marginally Successful level on
        the critical element(s) identified above in section 2a.(2), the
        improved performance must be considered in preparing the rating
        of record for the appraisal year.

        If at the conclusion of the opportunity period the employee\'s
        performance is still Unacceptable on the critical element(s)
        identified above in section 2a.(2), the employee must be
        notified in writing (but not in the form of a summary rating,
        unless the end of the opportunity period coincides with the end
        of the appraisal year) that his or her performance is
        Unacceptable; and reassignment, reduction in grade, or removal
        action must be initiated in accordance with 5 U.S.C. 4303 and
        HHS Instruction 432-1 or 752-1 as may be appropriate.

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    1.  If the opportunity period ends when the appraisal year ends, the
        employee must be given a rating of record according to the
        following requirements:

        a.  If the performance is determined to be Unacceptable, the
            rating of record must be Unacceptable regardless of any
            summary ratings earlier in the appraisal year.

    (430-4-90A.3 continued)

    a.  If the performance is determined to be Marginally Successful or
        better, the rating of record must consider that determination
        and any summary ratings earlier in the appraisal year.

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    1.  Opportunity periods should be timed so that they do not overlap
        appraisal years. But if the opportunity period does continue
        into the next appraisal year:

        a.  The employee must be given a rating of record of
            Unacceptable for the appraisal year in which the opportunity
            period started.

            The current performance plan, including the standards that
            must be reached in order to be retained, must be extended to
            the conclusion of the opportunity period. A summary rating
            must not be prepared at the end of the opportunity period,
            but the employee must be notified in writing what his or her
            performance is determined to be then.

        There is no Departmentwide requirement for opportunity periods
        to be of a certain length. It should be allowed to vary
        depending on such circumstances as the type of job, the number
        and nature of the critical elements involved, the kind of
        assistance planned, etc.

    Other Linkages to Performance Ratings

    1.  Performance ratings will be used for merit promotions, employees
        serving probationary periods, and pay/award determinations.

        Ratings of record will be used to determine additional service
        credit for reduction-in-force (RIF) purposes in accordance with
        5 CFR Part 351.

        a.  For RIF purposes, ratings considered to be ratings of record
            are the rating of record given at the end of the appraisal
            year.

            An employee will not be assigned a new rating of record for
            the sole purpose of affecting his or her retention standing.

            Scheduled ratings of record must not be postponed due to a
            RIF situation. Ratings of record which are issued after the
            most recently determined retention standing, but before the
            date of

    (430-4-90B.2c continued)\
    \
    issuance of a specific RIF notice, must be taken into account in
    determining the employee\'s retention standing.

[470-4-100]{.underline} ORIENTATION AND TRAINING

A.  Every supervisor must be trained in the practical application of the
    Employee Performance Management System in order to assure its
    effective administration. Training will address the provisions
    covering performance appraisal, performance awards, superior
    accomplishment awards, within-grade increases, and quality step
    increases. In turn, supervisors are expected to explain the system
    to subordinate employees in a manner that should enable them to
    understand the system.

[430-4-110]{.underline} FORMS AND RECORDKEEPING

A.  Each OPDIV must design and use its own form(s) for employee
    performance plans, progress reviews, and appraisals- At a minimum,
    forms must contain identifiable space for:

    1.  Documenting job elements, including designation of them
        ascritical or noncritical;

        Documenting elements\' numerical weights (if used);

        Documenting performance standards and their element rating
        levels;

        Documenting one or more progress reviews;

        Documenting individual element ratings;

        Documenting the summary rating level;

        Documenting any employee comments (see 430-4-80A.13);

        Documenting whether the summary rating is the rating of record,
        whether the rating of record is based on two or more summary
        ratings, and what those ratings were, along with the method used
        to derive the rating of record from the multiple summary
        ratings; and

        All appropriate signatures and dates.

    Forms must also state that at least a Fully Successful summary
    rating is required for an acceptable level of competence
    determination for granting a within-grade increase.

    (430-4-110 continued)

    Forms should not be larger than 8 1/2 \"X 11\" for filing
    convenience.

    As a part of monitoring performance, supervisors may make notes on
    significant instances of performance so that they will not be
    forgotten. Such notes will not be required by or be under the
    control of the Department or any of its components. Such notes [are
    not]{.underline} subject to the Privacy Act or accessible under the
    Freedom of Information Act as long as they remain
    [solely]{.underline} for the personal use of the supervisor, are not
    provided [to any other person]{.underline}, are not used [for any
    other purposes]{.underline}, and are retained or discarded at the
    [supevisor\'s sole discretion]{.underline}. NOTE : If the
    supervisor, in describing on the rating form actual performance,
    bases the description in part or in full on specific information
    from such notes, then that information will be recorded on or
    attached to the rating form. Information on or attached to the form
    will be subject to the Privacy Act.

    The maintenance, accessibility, transfer, or disposal of official,
    performance-related documents will be in accordance with Office of
    Personnel Management regulations and Department Instructions in the
    and 297 chapters of the HHS Personnel Manual.

[430-4-120]{.underline} EVALUATION

A.  The Assistant Secretary for Personnel Administration (ASPER) has
    responsibility for the ongoing review of the operation of EPMS
    (icluding performance awards, within-grade increases, and quality
    step increases) throughout the Department and to implement
    improvements as needed. Each OPDIV also has a responsibility for
    monitoring and evaluating its own operation of EPMS (including
    performance awards, within-grade increases, and quality step
    increases), within the framework of the Department requirements and
    implementing instructions, and to implement improvements as needed.\
    \
    Each year the ASPER schedules and conducts an assessment of
    personnel programs and their operation, including the area of
    performance management. A variety of assessment procedures are used.
    They include employee/supervisory questionnaires, statistical
    indicators, on-site assessments, special studies, and self
    assessments. A department guide, \"Guide for Reviewing Performance
    Management Program Operation,\" is followed in monitoring
    conformance to statutory, regulatory, and policy requirements.\
    \
    The agencies annually submit data generated by the performance
    management cycle through the Departmentwide personnel system. The
    data are then analyzed and compiled into reports. EPMS reports will
    include information such as rating distributions, performance award
    distributions, and expenditures.

[430-4-130]{.underline} EXCEPTIONS TO POLICIES

The Assistant Secretary for Personnel Administration must approve any
exceptions to the policies in this Instruction. Approval by the Office
of Personnel Management is also required when exceptions involve matters
under its purview.

EMPLOYEES EXCLUDED FROM THE REQUIREMENTS OF THIS INSTRUCTION

1.  All employees appointed under Schedule A authorities O, P, Q, and V
    whose appointment is limited to 1 year or less;

2.  Administrative Law Judges appointed under section 3105 of title 5
    United States Code;

3.  Patient employees;

4.  Experts and consultants serving in an individual capacity and
    members of advisory committees;

5.  Fellows appointed under Section 207(g) of the Public Health Service
    Act, as amended;

6.  Persons serving under an appointment in the excepted service having
    a time limit of less than 120 days;

7.  Employees in military service;

8.  Residents, interns, and other student employees who receive stipends
    under title 5, United State Code 5352;

9.  Personnel on detail to a public international organization; and

10. Presidential appointees.

[DEPARTMENT OF HEALTH& HUMAN SERVICES Office of the
Secretary]{.underline}

**Memorandum**

Date December 2, 1986

From Assistant Secretary for

Personnel Administration

Subject Delegation of Authorities for Performance Appraisal Provisions
Under the Employee Performance Management System (EPMS)

To Heads of Operating Divisions

Assistant Secretary for Management and Budget

1.  Under the authority vested in the Assistant Secretary for Personnel
    Administration (ASPER) by memorandum from the Secretary dated
    January 24, 1983, I hereby delegate the authorities indicated in
    this memorandum for managing the performance of employees covered by
    the Employee Performance Management System to Heads of Operating
    Divisions, including the Assistant Secretary for Management and
    Budget for employees of the Office of the Secretary at headquarters
    and in the regions.

    The following authorities may not be redelegate, except by the
    Assistant Secretary for Health, who may redelegate them to health
    agency heads without authority to redelegate:

    a.  Develop and administer performance appraisal systems in
        accordance with the equirements of HHS Employee Performance
        Management System: Performance Appraisal.

        Request ASPER approval, contingent upon subsequent approval by
        the U.S. Office of Personnel Management where required, for
        exceptions to the requirements referred to in HHS Instruction
        430-4.

    For the employees under their supervision, I hereby delegate to
    immediate supervisors, through the officials in the supervisory line
    above them, the authorities of an appraising official as set forth
    in HHS Instruction 430-4.

    For the employees under their supervision, I hereby delegate to all
    second line supervisors, through the officials in the supervisory
    line above them, the authorities of a reviewing official as set
    forth in HHS Instruction 430-40 This includes the authority to
    finalize ratings of record except as indicated in paragraphs 5 and 6
    below. However, there is no requirement for a reviewing official in
    any instance in which the Secretary, an Office of the Secretary
    Staff Division Head, an Operating Division Head, or the head of a
    health agency within the Public Health Service is the appraising
    official.

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A.  Page 2 - Heads of Operating Divisions\
    Assistant Secretary for Management and Budget

    1.  I hereby delegate to officials with the responsibility for
        managing performance awards budgets the authority to finalize
        ratings of record when awards are proposed based on the rating
        of record. (Within-grade increase determinations are not awards
        for the purpose of this delegation.)

        Regional Personnel Officers have the authority to concur in
        final ratings for the personnel staff of each Indian Health
        Service Area that has its Area Office in their respective
        regions. The Regional Personnel Officer, Region VI, has the
        authority to concur in final ratings for the personnel staff of
        the Gillis W. Long Hansen\'s Disease Center.

        The ASPER retains the authority to:

        a.  Establish Departmentwide requirements for performance
            appraisal systems; and

            Approve exceptions to the Department\'s requirements,
            contingent upon subsequent approval by OPM where required.

        Requirements and instructions for exercising the authorities
        cited above are contained in HHS Instruction 430-4.

        All redelegations must be in writing and in accordance with HHS
        Instruction 250-3, Delegation of Personnel and EEO Authority and
        Headquarters/Regional Office Relationships.

        This delegation is effective January 1, 1987, for calendar year
        appraisal cycles and October 1 , 1987, for fiscal year appraisal
        cycles. It supersedes the ASPER delegation memorandum of June
        30, Subject: Delegation of Authority to Take Certain Actions to
        Manage Employee Performance. However, existing redelegations
        made under that memorandum that are consistent with the
        provisions of this delegation will continue in effect until new
        redelegations are made under the authority of this memorandum

Thomas S. McFee

SUMMARY RATINGS AND RATINGS OF RECORD

1.  A rating of record is always a summary rating. An EPMS employee can
    have only one rating of record for an appraisal year except in
    certain situations pertaining to WIGI determinations (see 531-4).

2.  There may be occasions in which an employee will have more than one
    summary rating in an appraisal year. Occasions that require a
    summary rating are provided in Chart 1 and in 430-4-8OB. To
    determine whether any other occasions not included there require a
    summary rating, consult with the Department\'s Division of Pay and
    Performance Programs.

3.  All EPMS and any PMRS summary ratings in the appraisal year must be
    considered when deriving the EPMS rating of record for the year
    except in certain situations involving Unacceptable performance (see
    430-4-90A) .

4.  In deriving a rating of record from two or more summary ratings, any
    variations in length of performance plans, complexity of
    assignments, or any other relevant factors may need to be
    considered. Because there can be so many variations in such factors,
    appraising and reviewing officials have discretion in determining
    whether and how the factors under consideration will contribute to
    the derivation.

Chart 1

  ----------------------------------- -----------------------------------
  Some Occasions for Preparing\       [\
  [a Summary Rating\                  Status of the Summary
  ]{.underline}                       Rating]{.underline}

  1\. At the end of the appraisal     1\. The one summary rating is the
  year, and there were no earlier     rating of record for the appraisal
  summary ratings in the year (this   year.
  is the usual situation) .           

  2\. At the end of the appraisal     2\. The summary rating made for the
  year, and there were one or more    position held at the end of the
  earlier summary ratings in the year appraisal year is considered along
  (if there has not been a            with the earlier summary rating(s)
  performance plan in place for at    in deriving the rating of record
  least 120 days for the position in  for the appraisal year.
  the Department held at the end of   
  the appraisal year, a summary       
  rating must not be prepared for     
  that position in this particular    
  situation).                         

  3\. At the end of an extended       3\. The one summary rating is the
  appraisal year to allow an employee rating of record for the appraisal
  to be rated who had not been rated  year.
  earlier in the year (the only       
  occasion permitting an extension of 
  the appraisal year).                

  4\. At the time an employee changes 4\. The summary rating made at the
  positions after having served at    time of the position change is
  least 120 days under a performance  considered along with any earlier
  plan for the position being         and subsequent ratings in the
  vacated.                            appraisal year in deriving the
                                      rating of record for the year.

  5\. At the time an employee\'s      5\. The summary rating is a new
  performance is determined to have   rating of record even when the
  changed significantly enough to     determination is made before the
  result in a different WIGI          end of the appraisal year (at which
  determination or at the time a      time in such a case another rating
  determination is made that the      of record must be prepared taking
  employee has demonstrated sustained into consideration performance
  performance at an acceptable level  subsequent to the determination) .
  of competence after having been     
  denied a within-grade increase (see 
  531-4).                             
  ----------------------------------- -----------------------------------

United States

**Office of**

**Personnel Management** Washington, D.C. 20415

SEP 3 1986

Mr. Thomas S. McFee

Assistant Secretary for

Personnel Administration

Office of the Secretary

Department of Health and Human Services

Washington, D. C. 20201

Dear Mr. McFee

The purpose of this letter is to approve the Performance Management
System (PMS) Plans required under section 430.103(b) of Title 5, Code of
Federal Regulations.

The following plans for the Department of Health and Human Services are
approved:

> Performance appraisal plan for GS and Prevailing Rate employees
> (required at 5 U.S.C. 4302 and 4304).
>
> Performance Awards plan (required under 5 CFR Part 430, Subpart E).
>
> Plan for making within-grade increase and quality step increase
> determinations (required under 5 CFR Part 531, Subparts D and E).
>
> Superior Accomplishment Awards plan (required under Part 451, Subpart
> A).

Any proposed changes to the PMS plan(s) must be submitted to this office
for prior approval if the change would affect a provision of the plan
covered by regulation or law. Any other changes also should be sent to
us in order that we are assured of maintaining updated copies of your
plans in our files

Sincerely,

Barbara L. Fiss

Acting Assistant Director

for Performance Management/PSO