How OPM's 40% Rating Cap Works

OPM now caps Level 4 and 5 ratings at 40% of covered employees, down from the 48% who received them last year, and the cap affects awards and RIF standing.

Source: OPM, FY 2026 Standardized Distribution of Rating Levels and FY 2026 Performance Awards Guidance for Federal Employees (September 21, 2026); OPM workforce data.

Who the cap covers

For the fiscal 2026 cycle, no more than 40% of career GS employees, career SES members, and Senior Professionals can receive a Level 4 or Level 5 rating combined. OPM calls it a ceiling, not a target, and no other rating level is capped.

Wage Grade employees, noncareer SES, Schedule C and G appointees, inspector general offices, and very small agencies are excluded. Bargaining units whose contracts bar forced distribution are left out until those contracts end.

Last year, according to OPM data, 30% of employees under five-level systems got Level 5 and 18% got Level 4. The required calibration process will mean lowering many ratings.

What changes for awards

OPM's guidance sets these ranges for GS awards, as a share of basic pay: Level 5 at least 7%, Level 4 at least 4%, and Level 3 no more than 3%, with awards capped at $25,000. At least 60% of each bonus pool should go to Level 4 and 5 performers. Agencies may skip Level 3 awards, and no one rated below Level 3 is eligible for one.

Rating level	FY 2026 GS award range, as a share of basic pay
Level 5, Outstanding	At least 7%
Level 4, Exceeds Fully Successful	At least 4%
Level 3, Fully Successful	No more than 3%, and agencies may skip it
Level 2 or 1	No award

Why RIF standing is involved

Under OPM's RIF rules that took effect September 2, an employee's three most recent ratings of record set performance credit: 7 points for Level 5, 5 for Level 4, 3 for Level 3, and 0 for Level 2 or 1. Fewer top ratings means fewer high scores if a RIF happens. FFEBA's RIF, VERA and VSIP guide explains the ranking.

OPM's case and the criticism

OPM says inflated ratings carry no real signal and water down awards for top performers. It points to 2024 FEVS results showing only 47% of employees agreed that differences in performance are recognized in a meaningful way. Director Scott Kupor has written that there is "no shame" in a Fully Successful rating.

NTEU disagrees. After an IRS division acknowledged employees' frustration with the new process and told staff that a Fully Successful rating does not mean mediocre, the union said, "An arbitrary cap on the highest category of ratings undermines morale."

Key dates

Agencies were required to send OPM their closeout parameters, and any request to exceed the cap, by October 30. A waiver can raise the cap by up to 10 percentage points but never above 50% combined, and only for agencies that beat most of their published performance targets. OPM will answer waiver requests by November 20. Agencies report final distributions to OPM in 2027.

• 1

  October 30

  Agencies send OPM their closeout parameters and any waiver request.

• 2

  November 20

  OPM answers the waiver requests.

• 3

  2027

  Agencies report their final rating distributions to OPM.

Frequently Asked Questions

Sources: OPM, Memorandum, FY 2026 Standardized Distribution of Rating Levels and FY 2026 Performance Awards Guidance for Federal Employees (September 21, 2026); OPM, Performance Appraisal for General Schedule, Prevailing Rate, and Certain Other Employees, 91 FR 41521 (July 7, 2026); OPM, Reduction in Force final rule (August 3, 2026); FEDweek (October 27, 2026, and earlier coverage); Government Executive (October 2026).