FINAL

Effective August 2005

HHS Instruction

Personnel Manual

HHS Transmittal

HHS PERSONNEL INSTRUCTION 337

Category Rating and Selection Procedures

# 337-00 Purpose

# Background/Authority

# References

30. **Summary of Category Rating**

**337-40 Summary of OPM Requirements**

**337-50 HHS Use of Category Rating**

**337-60 Quality Category Definitions**

# 337-70 Referral and Selection of Candidates

# 337-80 Security

**337-90 Reporting and Record Keeping Requirements**

100. **Program Review and Evaluation**

# 

# 337-00 Purpose

The purpose of this Instruction is to state the Department's policies
concerning use of Category Rating.

# 

# 337-10 Background/Authority

On June 13, 2003, the Office of Personnel Management (OPM) issued
interim regulations implementing several human resource flexibilities
enacted in the Homeland Security Act (HSA) of 2002 (P.L. 107-296). One
of the flexibilities authorizes federal agencies to use an alternative
rating and selection procedure in the hiring process. Section 1312 of
the HSA provides that "OPM in exercising its authority under section
3304, or an agency with delegated examining authority under section
1104(a) (2), may establish a **category rating** system for evaluating
candidates for positions in the competitive service based on merit and
consistent with regulations prescribed by OPM, rather than assigning
individual numerical ratings." Category rating is synonymous with
alternative rating as described in 5 U.S.C. § 3319. The regulations,
which are not final, add Subpart C to 5 CFR § 337; however, OPM expects
to codify the HR flexibilities at 5 U.S.C. § 3319 within one year of
their issuance.

# 337-20 References

-   5 CFR 337

-   P.L. 107-296, Homeland Security Act, Title XIII, Sec. 3319

-   Delegated Examining Operations Handbook, Chapter 3, Section B

-   Delegated Examining Operations Handbook, Chapter 5, Section B

-   Category-Based Rating and Selection Handbook --OPM Workshop 11/24/03

**337-30 Summary of Category Rating**

Category rating is a process of evaluating qualified candidates by
considering the quality of their experience, education and training and
placing them into pre-defined "quality categories" rather than assigning
individual numerical scores. Quality categories (e.g. "Best Qualified, "
"Well Qualified," and "Qualified") are groupings of candidates with
similar levels of job-related knowledge, skills, abilities and
competencies. As in traditional rating and ranking, criteria for
evaluating candidates are identified through the job analysis process.
Critical tasks or major duties are identified for the position and
subject matter experts, in consultation with the human resource (HR)
specialist, establish job-related task examples for use in evaluating
applicants. These task samples are then translated into questions and
responses that are used by an automated rating system (QuickHire) to
self-evaluate applicants, or into category level definitions used in
manual rating procedures.

When using an automated (QuickHire) system to evaluate applicants, the
Selecting Official and the HR Specialist work together to determine
which questions/responses are "key" or essential to the performance of
the job's duties. Task examples include questions regarding applicants'
experience, education, and other job-related criteria that demonstrate
knowledge, skills, abilities and competencies for the critical tasks of
the job.

When using manual rating procedures, the Selecting Official and the HR
Specialist work together to develop category level definitions that
include relevant task examples. Task examples include questions
regarding applicants' experience, education, and other job-related
criteria that demonstrate knowledge, skills, abilities and competencies
for the critical tasks of the job. (See OPM Delegated Examining Handbook
for procedures.
[http://www.opm.gov/deu/Handbook_2003/DEOH-Section-19.asp#Heading2198](../Category%20Rating%20ProceduresHHS-modified-4.doc))

The flexibility of the category rating system is that it affords the
selecting official a wider choice of selectable candidates than
previously allowed under the "rule of three." In category rating, a
selecting official may choose **any** of the candidates in the highest
quality category **as long as a veteran in that category is not passed
over for a non-veteran**.

**337-40 Summary of OPM Requirements**

-   Two or more "quality categories" are defined through a job analysis
    (i.e. the systematic process of determining the KSAs/competencies
    directly related to performance on the job) conducted in accordance
    with the *Uniform Guidelines on Employee Selection Procedures.*

-   Each category must have a clear definition that distinguishes it
    from the other categories.

-   After determining that a candidate meets minimum qualifications,
    candidates are placed in one of the pre-defined categories.

-   The "rule of three" does not apply---candidates that are placed
    within the **highest** quality category are referred for selection.
    If there are fewer than three candidates in the highest category,
    the highest and second highest categories **may** be merged.

-   There is absolute veteran's preference within each category.
    Qualified preference eligibles are listed ahead of non-preference
    eligibles within each category grouping. In certain instances,
    veterans with a compensable service-connected disability of at least
    10% (i.e. CPS and CP) **must** be placed in the **highest**
    category.

-   Requirements of the Career Transition Assistance Program (CTAP) and
    Interagency Career Transition Assistance Program (ICTAP) continue to
    apply.

-   Agencies must establish documentation and record-keeping procedures
    for reconstruction purposes.

-   Agencies must submit an Agency report to Congress on use of their
    category rating and selection procedures each year for the first
    three years following the program's establishment.

# 337-50 HHS Use of Category Rating 

The category rating system may not be the most appropriate rating method
for every recruitment situation. For example, category rating may
**not** be used for filling positions covered by the Luevano Consent
Decree (see Appendix A for an abbreviated list of common Luevano-covered
positions in the Department; a full listing of Luevano --covered
positions is available at Appendix D of the OPM Delegated Examining
Operations Handbook.) Given the position and potential applicant pool,
the selecting official and HR specialist must consider if category
rating is the most beneficial method to fill a vacant position. Other
federal agencies' experience suggests that the **category rating
procedure is most effective when the selecting official desires a large
number of candidates and/or there are multiple positions to be filled.**

## **337-60 Quality Category Definitions**

[]{.mark}

Two automated methods, and one manual method are currently authorized
for the rating of candidates and their assignment to quality categories.
The first automated procedure is referred to as the "key item" method
and the second automated rating approach is identified as the "score
based" method. The manual method follows the A-C-E rating approach
identified in the OPM Delegated Examining Handbook. These procedures are
described below. Any of these three approaches may be used by the HR
Specialist to evaluate candidates under the HHS category rating
procedures. Other methods may be used, once approved by Office of Human
Resources (OHR), Assistant Secretary for Administration and Management,
Office of the Secretary.

**A. Key Item Category Rating Method**

[]{.mark}

When the vacancy has closed for receipt of applications and supplemental
documents, the HR Specialist will use QH data mining process to
determine the percentage of key responses applicants have indicated that
they possess, as outlined below:

**[Best Qualified Category]{.underline}** \-- Applicants who have
responded that they possess at least 75% of the key responses.

**[Well Qualified]{.underline}** \-- Applicants who have responded that
they possess at least 50%, but less than 75% of the key responses.

**[Qualified]{.underline}** \-- Applicants who are minimally qualified
and have responded that they possess less than 50% of the key responses.

**[Not Qualified]{.underline}** -- Applicants who are not minimally
qualified.

**B. Score Based Category Rating Method**

When the vacancy has closed for receipt of applications and supplemental
documents, the HR Specialist will separate candidates into quality
groups based on their QH score (that ***[is not]{.underline}***
augmented[^1] with additional points for veterans preference -- however,
veterans do have selection preference -- see below). QH scores are a
reflection of the quality and appropriateness of the candidate's
training, education and experience relative to the vacancy being filled.
Higher scores reflect an overall better fit between the competencies
that the candidate possesses and the requirements of the specific
vacancy. Quality groups are defined by the score ranges below[^2]:

-   Best Qualified Category \-- Applicants who have a QH score between
    95 and 100.

-   Well Qualified \-- Applicants who have a QH score between 85 and
    94.99.

-   Qualified \-- Applicants who have a QH score between 70 and 84.99.

### C. Manual Category Rating Method

The HR Specialist and Selecting Official work together to develop an
A-C-E type crediting plan (see OPM Delegated Examining Handbook, Chapter
5, Section B). When the vacancy has closed for receipt of applications
and supplemental documents, the HR Specialist will separate candidates
into quality groups based on their meeting one of the three identified
benchmark descriptions. The benchmarks are a reflection of the quality
and appropriateness of the candidate's training, education and
experience relative to the vacancy being filled. They also include any
Quality Ranking Factors identified by the Selecting Official as being
preferred and relevant to the vacancy. The Best Qualified benchmark
reflects an overall ideal fit between the competencies that the
candidate possesses and the requirements of the specific vacancy.
Quality groups are defined in the vacancy announcements by tying in key
concepts from the benchmarks to the Quality Category. For example:

-   Best Qualified Category \-- Applicants who have experience that is
    almost identical to those performed in the position, including any
    Quality Ranking Factors identified.

-   Well Qualified \-- Applicants who have experience that is very
    similar to those performed in the position.

-   Qualified \-- Applicants who meet minimum qualification
    requirements, but do not show experience or skill beyond that.

**337-70 Referral and Selection of Candidates**

-   Selections are made from the *highest quality category* for which
    there are applicants, on the basis of merit, without regard to race,
    color, religion, gender, sexual orientation, national origin,
    physical disability, age or political affiliation.

-   **For professional and scientific positions** (e.g. positions
    requiring specific education and/or degree) at GS-9 or higher,
    preference eligibles who qualify and have a compensable
    service-connected disability of 10% or more (i.e. CPS and CP) are
    placed at the top of the **appropriate category grouping for which
    they qualify (Best Qualified, Well Qualified or Qualified).**

-   **For positions other than professional and scientific at the GS-9
    level or higher,** preference eligibles who have a compensable
    service-connected disability of 10% or more are placed at the top of
    the **Best Qualified category,** with all other Superior quality
    veterans preference eligibles.

-   Selecting officials **may not** pass over a veteran to select a
    non-veteran unless a written objection (i.e. documentation of the
    reason why the veteran should not be hired) is submitted to and
    sustained by the designated official. Objections should rarely
    occur. Veterans preference eligibles cannot be passed over to
    appoint lower-ranked non-veterans preference eligibles unless there
    is a sustained objection based on qualifications, suitability or
    other reasons considered to be disqualifying under 5 U.S.C. 3318 and
    5 CFR 332.406 (as described in the OPM Delegated Examining Guide).
    Should there be an objection to a veterans preference eligible
    having a 30% or greater service-connected disability (CPS), then the
    reasons for the objection must be put in writing and presented to
    the applicant. The applicant then has 15 days from the date the
    letter is sent to rebut the objection. Only OPM may adjudicate any
    such objection to a CPS eligible.

-   Any veteran in the group under consideration may be selected
    regardless of the type of preference they are entitled to.
    Compensably Disabled veterans do not have any greater selection
    privileges than Tentative Preference veterans.

-   **If there are fewer than three candidates** in the Best Qualified
    category, the two highest categories ("Best Qualified" and "Well
    Qualified") **may** be **merged** into one category. When merging
    categories, a new category is created and all preference eligibles
    from the Well Qualified group (in addition to those already grouped
    in the Best Qualified category) "float" to the top of this new
    category. The HR specialist must explain the merge option carefully
    to the selecting official. Merging is **not** mandatory and can
    **only** be exercised when there are **fewer than three candidates
    in the Superior category.**

-   Under category rating, eligibles are listed in the following order:

1.  Agency Reemployment Priority List (RPL) eligibles;

2.  Interagency Career Transition Assistance Program (ICTAP) and Career
    Transition Assistance Program (CTAP) eligibles;

3.  Eligibles who were entitled to, but not given, due consideration;

4.  Eligibles in the highest quality category (including CP and CPS
    veterans);

5.  Eligibles in other quality categories, as needed.

-   Candidates in the highest quality category (i.e. "Best Qualified")
    are referred to the selecting official. Candidates are referred in
    alphabetical order and preference eligibles are listed ahead of
    non-preference eligibles.

-   If there are CTAP / ICTAP candidates and CP / CPS candidates, then
    selection can be made equally from either class of candidates.

**337-80 Security**

All documentation developed in the Category Rating Process is considered
confidential (i.e., examples of quality category indicators, benchmark /
task examples) and must not be disclosed in the vacancy announcement or
otherwise made available to candidates or others without a need to know.
In addition, all documentation must be kept in a secured environment
(e.g. locked file cabinet or safe.) [Violations can result in the
cancellation of the vacancy announcement.]{.underline}

**337-90 Reporting and Record Keeping Requirements**

According to OPM regulations, agencies are required to submit an annual
report to Congress on the use of the category rating and selection
procedures in each of the three years following the program's
establishment. Specifically, the Department is required to report the
following information to OPM:

-   The number of employees hired under the system;

-   The impact the system has had on the hiring of veterans and
    minorities, including those who are American Indian or Alaska
    Natives, Asian, Hispanic, Black or African American and native
    Hawaiian or other Pacific Islanders;

-   The way in which managers were trained in the administration of the
    system.

# The record keeping requirements of the Delegated Examining Operations Handbook, Appendix C also apply to records related to the Department's Category Rating Procedure.

RNO data will be collected via a report generated through either the
automated system (Quick Hire), or for manual cases, through the use of
an authorized RNO data collection form included as part of the
application package and submitted with other application materials.

**337-100 Program Review and Evaluation**

The following information must be provided to OHR within 60 days of the
selection of a candidate using category rating (see Appendix B for
required reporting format):

-   Title, grade and occupational series of the position;

-   Total number of applications received;

-   Number of preference eligibles and minority candidates that
    [applied]{.underline} for the position;

-   Number of qualified candidates by quality category;

-   Number of selections made;

-   Number of preference eligibles and minority candidates
    [selected]{.underline};

-   Number of preference eligibles and minority candidates who actually
    entered on duty;

-   "Certificate of Eligibles Survey" from the selecting official
    regarding level of satisfaction with the process.

Appendix A:

Common Luevano-Covered Positions at the Department of Health & Human
Services (GS-5 and GS-7)

> **POSITION TITLES SERIES**
>
> Administrative Officer 0341
>
> Arts and Information, General 1001
>
> Budget Analysis 0560
>
> Business and Industry, General 1101
>
> Contracting Series \* 1102
>
> Economics \* 0110
>
> Education and Training, General \* 1701
>
> Financial Administration and Programs 0501
>
> General Supply 2001
>
> Health Insurance Administration 0107
>
> Human Resources Management 0201
>
> Information Technology Specialist (Trainee) 2210
>
> Inspection, Investigation, and Compliance (Gen) 1801
>
> Intelligence 0132
>
> Inventory Management 2010
>
> Investigator, Criminal 1811
>
> Investigator, General 1810
>
> Miscellaneous Administration and Program 0301
>
> Paralegal Specialist 0950
>
> Program Management and Program Analysis 0343
>
> Psychology \* 0180
>
> Public Affairs 1035
>
> Public Health Program Specialist 0685
>
> Public Health Quarantine Inspection 1864
>
> Safety and Occupational Health Management 0018
>
> Security Administration 0080
>
> Social Science 0101
>
> Technical Writing and Editing 1083
>
> Technical Information Services 1412
>
> Telecommunications 0391
>
> Transportation Specialist 2101
>
> Writing and Editing 1082
>
> \* Position requires specific educational requirements

[^1]:

[^2]: ^1^ Note that the QH system must be configured to not
    automatically add veterans' preference points.

    ^2^ Note that other scores, higher or lower, than 95 may be used to
    identify the Best Qualified Category, if supported through proper
    documentation and identified prior to the position being announced.
    Recommend keeping the Well Qualified lower range cutoff at 85.