IRS Leaders Urge Staff to Maintain Excellence Despite New Performance Rating Caps
New federal rules cap high performance ratings at 40 percent, causing morale issues. IRS leadership urges staff to maintain high standards despite the changes, while unions argue the policy harms retention and ignores the financial impact of lower ratings.
Key points
- New rules effective for fiscal 2026 limit combined levels 4 and 5 ratings to 40 percent for most federal categories.
- A calibration process requires higher officials to adjust supervisor ratings to meet these caps, often lowering scores.
- IRS chief of internal consulting Joseph Ziegler emailed staff urging them to continue performing at an outstanding level regardless of rating labels.
- The National Treasury Employees Union (NTEU) criticized the cap as arbitrary, arguing it undermines morale and retention.
- Unions are challenging the new rules through court cases and grievance procedures.
Background
Recent federal workforce reforms have included changes to promotion timelines and resignation processes. The current rating cap is part of a broader shift in how performance is measured and rewarded within the civil service.
Why it matters
The forced distribution model risks demotivating skilled federal employees by decoupling high performance from recognition. This could impact retention and service delivery, especially as lower ratings affect pay, awards, and layoff protection.
What to watch
The NTEU and other employee organizations will continue legal and grievance challenges against the new rating rules. Agencies will finalize fiscal 2026 ratings under the new calibration framework.
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