STUDY OF EFFICIENCY RATING SYSTEMS IN THE FEDERAL SERVICE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP57-00384R000500090005-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 38
• Document Creation Date: December 9, 2016
• Document Release Date: August 16, 2000
• Sequence Number: 5
• Publication Date: February 1, 1950
• Content Type: STUDY

Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
[COMMITTEE PRINT]
February 1, 1950
COMMITTEE ON POST OFFICE AND CIVIL SERVICE
HOUSE OF REPRESENTATIVES
STUDY OF
EFFICIENCY RATING SYSTEMS
IN THE FEDERAL SERVICE
(Pursuant to Section 903, Title IX of the Classification Act
of 1949, P. L. 429, 81st Congress)
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1950
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
COMMITTEE ON POST OFFICE AND CIVIL SERVICE.
TOM MURRAY, Tennessee, Chairman
JAMES H. MORRISON, Louisiana
GEORGE P. MILLER, California
JAMES C. DAVIS, Georgia
JOHN BELL WILLIAMS, Mississippi
JOHN A. WHITAKER, Kentucky
THURMAN C. CROOK, Indiana
RAYMOND W. KARST, Missouri
HOMER THORNBERRY, Texas
JAMES V. BUCKLEY, Illinois
F. ERTEL CARLYLE, North Carolina
EUGENE J. McCARTHY, Minnesota
A. S. HERLONG, JR., Florida
CHESTER C. GORSKI, Now York
GEORGE M. RHODES, Pennsylvania
EDWARD H. REES, Kansas
HAROLD C. HAGEN, Minnesota
ROBERT J. CORBETT, Pennsylvania
KATHARINE ST. GEORGE, New York
ANTONI N. SADLAK, Connecticut
EDWARD H. JENISON, Illionois
USHER L. BURDICK, North Dakota
GARDNER R. WITHROW, Wisconsin
H. R. GROSS, Iowa
JAMES S. GOLDEN, Kentucky
Aak
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
UNITED STATES CIVIL SERVICE COMMISSION,
Washington 25, D. C., January 31, 1950.
Hon. SAM RAYBTTRN,
Speaker of the House of Representatives.
DEAR MR. SPEAKER: Section 903 of title IX of the Classification
Act of 1949 (Public Law 429, 81st Cong.) provides as follows:
service and submit a report to Congress on or before February 1, 1950, setting
forth its findings as to the operation and administration of such systems and such
recommendations (including specific recommendations for legislation) as it may
deem advisable.
This stud has been made and the required report is submitted
herewith. This report contains a discussion of the problems, de-
scriptions of the various efficiency rating systems in the Federal
service, information concerning the operation and administration of
these systems, and recommendations.
Specific recommendations for legislation are also included.
By direction of the Commission.
HARRY B. MITCHELL, Chairman.
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
CONTENTS
Page
Chapter I. Descriptions of efficiency-rating systems in the Federal Service_ 1
Systems not under the jurisdiction of the United States Civil Service
Commission:
The Foreign Service (Department of State) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1
Department of Medicine and Surgery (Veterans' Administration) - 3,
Post Office Department____________________________________ 4
The Tennessee Valley Authority----------------------------- 9
Systems approved by the United States Civil Service Commission:
Bonneville Power Administration (Department of the Interior)__ 10
Department of Defense_____________________________________ 12
Department of the Air Force____________________________ 12'
Department of the Army_______________________________ 14
Department of the Navy_______________________________ 16?
United States Maritime Commission------------------------- 18'
The Panama Canal---------------------------------------- 19,
Department of the Treasury________________________________ 20.
Veterans Canteen Service (Veterans' Administration) - - - - _ _ _ _ _ _ 22
Uniform efficiency-rating system____________________________ 23
Approved variations within the uniform efficiency-rating system
authorized by the United States Civil Service Commission--__ 28
Chapter II. Recommendations for performance-evaluation plans-------- 30
Chapter III. Legislative proposals ----------------------------------- 33
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
CHAPTER I. DESCRIPTIONS OF EFFICIENCY RATING SYSTEMS USED IN
THE FEDERAL SERVICE
There are three general situations regarding efficiency rating systems
for civilian employees in the Federal service. The uniform efficiency
rating system developed by the Civil Service Commission applies to
all employees in positions covered by the Classification Act and to
other employees by administrative action of departments and agencies.
A number of departments and agencies have developed their own
systems for employees whose positions are not under the Classifica-
tion Act. Some of these agency systems have to be approved by the
Civil Service Commission under the provisions of the act of July 31,
1946 (60 Stat. 751). Others are not under this act and are not sub-
mitted to the Civil Service Commission for approval.
The systems of the first four agencies, described below, are not
under the jurisdiction of the Civil Service Commission. These systems
are used in the Foreign Service (Department of State), the Depart-
ment of Medicine and Surgery (Veterans' Administration), the Post
Office Department, and the Tennessee Valley Authority. Following
these are descriptions of systems approved by the Civil Service Com-
mission for employees whose positions are not under the Classification
Act and who are not rated under the uniform system. Finally there
is presented a description of the uniform system and a summary of
the variations in the uniform system which have been approved by
the Civil Service Commission upon the request of the specific agencies
listed.
SYSTEMS NOT UNDER THE JURISDICTION OF THE UNITED STATES CIVIL
SERVICE COMMISSION
The Foreign Service (Department of State)
Annual efficiency reports for Foreign Service officers have been pre-
pared for many years. These reports formerly consisted of narrative
,.r statements or impressions of reporting officers setting forth past per-
formance and apparent possibilities of development in various types
or phases of Foreign Service work. The reports were based on a broad
outline or guide of matters to be considered. A formal rating system
was first established after the approval of the Foreign Service Act of
1946. In 1947 a group of consultants was employed by the State
Department to make a study for the purpose of developing a perform-
ance-merit-rating system for use with Foreign Service officers. As a
result of this study, a performance report was put into use in 1948.
The performance-report system is used to rate approximately 1,300
employees in embassies, consulates, and related offices over the entire
world. In past years ambassadors or other officers in charge rated
the members of their staff whether or not they were personally familiar
with the employees or their detailed performance. However, under
the now system, the immediate supervisor is the rater and the officer
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
2 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
in charge is the reviewer. One copy of the report is forwarded to the
central office in Washington, and a duplicate copy is placed in the
confidential file at the local office. The system provides that, while
formal notice is not required, reports of unsatisfactory performance or
of deficiencies, weaknesses, or shortcomings should be discussed by
the rater with the employee at the time of preparation of the report.
Upon request by any employee, he is furnished a summary of his
performance report and his adjective summary. Five adjective
summaries are provided which are identical to the adjective ratings
used under the uniform efficiency rating system. Performance re-
ports are prepared annually on August 1, but special reports are pre-
pared 6 months after officers have been on new assignments or at
different posts of duty. This results in a great number of 6 months'
ratings in view of frequent changes in personnel at diplomatic posts.
Performance reports are considered important by agency officials
because they tend to promote more effective supervisory practices.
They are believed to improve day-to-day accomplishment by causing
supervisors to be more conscious of their responsibilities and better
acquainted with the services of their employees, and by encouraging
discussions of performance by supervisors with employees. They are
Also considered important for consideration in the making of transfers,
reassignments, and other administrative actions. They are used by
selection boards in making promotions. Because of the uses made of
performance reports, extensive information concerning the officer re-
ported on is included in the report and is believed to be desirable.
The performance report form consists of four parts. Part T con-
tains numerous blocks of items, each block having four or five un-
related statements, words, or phrases which are intended to be
descriptive of the performance of Foreign Service officers. In each
block of items the rater underlines the item which is most charac-
teristic of the officer being rated, and he crosses (X) the identifying
letter of the item which is least characteristic of his performance.
The items in each block are unrelated purposely, the idea being that
judgment in selecting the characteristic items will not be affected by
other related considerations. The rating method is known as the
forced choice method. Part II of the form lists 13 factors which
affect or are related to job performance. The rater evaluates the
competence of the officer being rated by placing a check mark in one
of three columns opposite each factor: A equals superior, B equals
satisfactory or up to required standard, and C equals below standard.
The rater marks only those factors which are pertinent, and space is
provided for adding factors which the rater feels affect the officer's
performance. Space is further provided for any comments on the
performance factors. Part III provides for a five-level evaluation of
an officer's proficiency in foreign languages. Part IV consists of a list
of major types of work to which an officer may be assigned in the
Foreign Service. The rater indicates his evaluation of the competence
of the officer in the various types of work by checking one of three
columns as follows: A equals excellent qualifications, will work well
without supervision; B equals well qualified, can be trusted to do
competent work, needs no supervision on routine matters; C equals
needs improvement, competence below standard required. Space
.is provided for comments and recommendations on placement. On
the back of the last page of the report form, as sections of part II,
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE 3
space is provided for a summary description of the officer and his work
and for recommendations. At the bottom of the page the adjective
summary is entered with a definition of performance for each level
of rating provided.
Foreign Service inspectors visit a certain number of diplomatic
posts each year covering the entire Service in about 3 years. These
visits usually last about 2 or 3 weeks and cover all of the functions
of the particular office. Detailed reports are made on all phases of
the work and the personnel involved.
,While the prescribed performance report form is normally used,
some offices prefer to continue using the narrative report form and
the agency permits unlimited variation in the prescribed method.
Management officials have not been entirely satisfied with the results
of the system now in use. It is felt that improvement is necessary
and desirable, and a new form probably will be designed after further
study of the problem.
Department of Medicine and Surgery (Veterans' Administration)
The proficiency rating system for the analysis of the general effec-
tiveness of doctors of medicine, dentistry, and osteopathy, and of
registered professional nurses in the Veterans' Administration was
established under authority of the act of January 3, 1946 (Public
Law 293, 79th Cong.). The system was first established in August
1947, and was revised, effective July 1, 1949.
Under this system, employees receive a rating annually on the
anniversary date of appointment. Approximately 18,750 professional
employees are rated under the system, two-thirds of which are nurses
and the remaining number are divided on a ratio of about 4 doctors
to 1 dentist. The rating is prepared by the immediate supervisor
and reviewed by the next supervisor in line of responsibility, who
prepares a narrative summary regarding the performance of the
employee, which serves for worth-while purposes of administrative
reassignment, transfer, promotion, demotion, or separation. Con-
sideration first was given to utilizing the uniform efficiency rating
system prescribed by the Civil Service Commission, but it was
determined that such system did not serve the purpose of recording
necessary information and analyses of employees' work. However,
many of the rating elements used under that system are defined in
v.ro terms very similar to the rating elements used under the uniform
efficiency rating system. Management officials feel that the report
form, as used, is adapted to the assignments of the persons rated.
The proficiency report form contains 20 rating elements numbered
-from 11 to 30, in the nature of "personality," "professional," and
"administrative" elements, most of which are rated in any assignment.
An "over-all" evaluation element is provided also. Other entries are
provided for on the form, such as capacity for advancement and the
degree of contact between the rater and the employee rated, Provi-
sion is made on the report form also for narrative statements by
reviewing officials. Specific element patterns have been prescribed
for each type of assignment and are required to be adhered to strictly.
Eight numbered evaluation levels or "rating scales" are provided for
each of the 20 rating elements and 8 numerical evaluation levels are
used for the "over-all evaluation" even though 1.2 levels are provided
for the latter element on the form. The rater places an "X" in the
61561-50-2
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
4 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
appropriate level of each element rated and, by the use of a table of
weights for the particular assignment pattern, adds and records the
numerical score rating. By conversion, an adjective rating is deter-
mined. Employees are formally notified of their ratings.
Originally, six adjective rating levels were used, as follows: Poor,
fair, good, very good, excellent, and superior. Many employees
desired an "excellent" or "superior" rating and appealed their as-
signed ratings. This dissatisfaction was believed by agency officials
to be caused by the weight that was given to efficiency ratings in the
previous promotion program and to the lack of clear distinction
between the rating levels. Another cause of appeals was the difference
in viewpoint of supervisors as to performance that would justify
assignment of a particular adjective rating. In view of these prob-
lems the system was changed, effective July 15 1949, to provide for
only two ratings, namely, satisfactory and unsatisfactory. A third
higher level of "outstanding" was considered but was omitted from
the system because the agency officials felt that no useful purpose
could be anticipated. Management officials of the Department of
Medicine and Surgery take the view that while ratings are important,
undue stress is placed on rating systems which provide for multiple
adjective rating levels. There are no approved variations from the
rating system as prescribed.
Agency officials indicate that the rating process now in use has
been received favorably by both employees and supervisors. The
ratings are used informally for administrative purposes, the primary
value being derived from an analysis of individual element evaluations
and of the narrative statements appearing on the report. It is felt
by the Department that improvement in the rating elements and
patterns could be made but no changes are contemplated until more
experience has been gained with the present rating system. These
officials believe that the system as now designed will adequately serve
the purpose of rating performance of professional people in their
organization.
Post Office Department
The Post Office Department has five efficiency rating systems, three
of which are similar, which are used in its field services. The history
of efficiency ratings in the Post Office Department is best reflected
in the history of the individual systems now in use. The philosophy
of management with respect to the systems is reflected in the reaction
of the employees, supervisors, and chiefs of the specific field services
under discussion.
The efficiency rating systems for motor vehicle service and pneu-
matic tube service and for the custodial service are almost identical
with the efficiency rating system for the postal service. The only
real difference is in the demerits, which are considerably less in number
than for the postal service. These two systems are not discussed in
detail as the postal service system is fully covered under the discussion
of that system.
Detailed description of the efficiency rating systems for the postal
service, the postal transportation system, and the post office inspection
service follows.
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE 5
Postal service
The efficiency-rating systems for the postal service include all those
employees who serve as supervisors, post-office clerks and rural carriers
at first- and second-class offices, city and village delivery carriers,
special-delivery messengers at first-class offices, and mail handlers.
A system of efficiency ratings for this particular service was estab-
lished after the act of March 2, 1907, which first established automatic
grade-salary increases for clerks and carriers in first- and second-class
post offices. This act provided that certain employees of the post
office would be promoted to the next highest salary grade after
completion of 1 year of satisfactory service. Following this act, the
Postmaster General observed that there was a lack of uniformity on
what various postmasters considered satisfactory service and consid-
erable variation in the certifications made in compliance with the law.
He, therefore, appointed a commission of inspectors to devise an
efficiency-rating system which would produce a uniform basis for
ratings in the post-office service throughout the country. Such a
system was devised and placed in effect on January 1, 1909. In his
annual report to Congress in 1909, the Postmaster General states with
respect to this new system that the ratings were based on the quantity
of work employees perform, their accuracy in doing it, their compliance
with the postal regulations and office rules as to conduct, their punc-
tuality and regularity in attendance, and their familiarity with the
regulations and instructions regarding their duties as shown by examin-
ations.
Several years ago efficiency ratings were extended to third-class
post-office employees, supervisory employees, and rural carriers out
of first-class offices. Here again the regulations provide for evaluation
of work performance plus conduct evaluation based on a merit and
demerit system. The merits and demerits are spelled out in detail in
the agency regulations, which are attached to this study. There is
provision, also, for an evaluation of the results of examinations which
are given which determine the proficiency of the employee in distribut-
ing mail.
The postal service emphasizes that the efficiency-rating evaluation
is based on the work performance of the individual while the merit-
demerit system is devised to reflect his conduct in a position which is
constantly under public scrutiny. Rating form 3990A provides for
an adjective rating only, there being four possible adjective ratings,
i. e., outstanding, good, fair, and unsatisfactory. An employee who
has a "fair" efficiency rating is not eligible for automatic promotion
or promotion to a supervisory position. It is the Department's
view that an employee who has an unsatisfactory rating is not suited
for retention in the service. Separations are made on letters of
charges, however.
Approximately 300,000 employees are rated under this system,
which is uniform for all post offices. It is used extensively in selec-
tion of employees for preferred assignments, for filling supervisory
positions, as well as for its essential purpose of providing a basis for
automatic salary promotion.
While the Department feels that this system has definitely contrib-
uted to the morale of the employees and has resulted in substantial
justice to all employees-the goal of the Postmaster General who
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
6 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
decreed its use in 1909-there have been complaints against it by
some representatives of employee organizations who feel that undue
stress is given to the demerit side of this form of evaluation.
The postal service has some changes to their system under con-
sideration but have not studied these proposed changes to the point
where they feel a discussion of them would be of value to their service
or the Government as a whole.
Postal transportation system
The postal transportation system, formerly known as the railway
mail service, has used some system of evaluating employees since its
creation in 1865. At first there was a simple record of errors for each
employee, then, by 1872, there was kept a record of the scheme
examinations so that the office would know how well an employee
knew his job and how well he applied that knowledge. By 1880 the
system was being formalized with a specific form containing a record
of performance as well as the results of scheme examinations. In
addition, a separate form was used to evaluate probationers before ow
conversion to permanent status. The railway mail service continued
to use this type of evaluation with changes and additions until 1913
when a general conference of division superintendents met for the
purpose of revising the efficiency rating system. On February 3,
1913, they adopted what is substantially the present system, making
a list of plus and minus points (the forerunner of the present merit
and demerit points) which system was tried out by all the division
superintendents during the remainder of that year. In January 1914
the system was published as an Efficiency Rating System, a system
to determine the efficiency and value of a clerk's service, based only
on definite and ascertained facts, after he has had an opportunity to
be heard in his defense, by noting a certain number of points, plus or
minus, in the individual record. In 1921 the system was revised to
some extent and was called a service-rating system, the title which
is still used. In 1922 it was revised again and the plus and minus
points were changed to merits and demerits. During this revision
the items which earned merits and demerits were reduced from a
very long list to one which could be contained on one page. No
substantial changes have been made in the system since that date
but the list of merit and the demerit points has been revised from AWk.
time to time.
The postal transportation system uses a form on which employees
are rated on personal qualifications, quality of performance, amount
of work produced, and the qualifications shown on the job. There is
an additional space on the form for rating supervisory qualifications
which ratings are not combined with the evaluation of performance
as a clerk. There is also a space on the rating form for results of
performance examinations, which are mandatory during probationary
periods. In conjunction with the rating form there is a conduct
evaluation based on a merit-demerit system. The postal transporta-
tion system emphasizes that the efficiency rating form is designed to
evaluate the work performance of an individual while the merit-
demerit list reflects his conduct in a position which is constantly
under public scrutiny. The merits and demerits are given in detail
in the regulations covering this system.
Ratings are given quarterly during the probationary year of service
and are used to determine the general qualifications of the individual
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 05
Approved Frog Release g2001/07~/2t5 : CIA-RDP57S 0038ERE0005000900E
for permanent appointment. Thereafter, ratings are made annually
on May 31. Consideration is given to efficiency ratings as well as to
seniority in the selection of clerks for supervisory positions. Gener-
ally, efficiency ratings are used for the postal transportation system
as they are used in the uniform system. Ratings indicating satis-
factory service are necessary for successive promotions and faithful
and meritorious service is necessary for meritorious promotions to the
three additional grades provided by the act of July 8, 1945, effective
July 1, 1945. There are approximately 27,000. permanent employees
and. 7,000 substitute or hourly wage employees covered by these
ratings. The system is uniform and final approval of ratings is given
by the Washington office of the service in question. The present
rating form was adopted over 15 years ago but has been modified
from time to time, the latest change being made in August 1949.
Officials of the postal transportation system believe that the
efficiency-rating system has been generally satisfactory to both the
men and the Department. Unions have approved it and the Depart-
ment officials point out that the simplicity of the form removes the
need for a heavy training program. They feel that the basic qualifica-
tions necessary to properly rate an individual are an understanding of
the five gradations of performance under each element and an un-
biased personal knowledge of the work of individual to be rated.
This system, which employs five gradations for each element factor,
is a numerical system with the rater checking the gradation which he
believes applicable to the employee. Should he desire to do so, he
can translate the rating factors into an adjective rating. However,
it is not necessary for the rating official to do so. He may transmit the
rating report with his check marks to the district superintendent for
review and approval and that official translates the markings into an
adjective rating and notifies the employee. The adjective ratings
are "excellent," "very good," "good," "fair," and "poor." Appeals
of these ratings are made in the same manner as for other offices in
the Department, the individual appealing through channels to the
head. of the Department, if he so desires.
The postal transportation system encourages personal interviews
with employees at the time ratings are assigned. It recognizes, how-
ever, that the nature of the work, requiring absence from head-
quarters, does not always permit these interviews and ratings are,
therefore, given on occasion without personal discussion with the
employee. A discussion is mandatory if an employee expresses dis-
satisfaction with the rating.
The postal transportation system feels that its rating form is an
inventory of the worth of an employee to the service; that it is a notice
to the employee of the value placed on his services by his agency,
and that it results in a continuing effort on the part of the employee
to earn "good" or better ratings. While the conduct record (merit-
demerit system) is a month-to-month notice to the employee of his
over-all conduct and gives him an idea of just what adjective rating
he will earn, the agency requires that the employee be given an advance
warning when it is apparent that his performance and conduct will
result in a rating below "fair.".
The agency has recently revised its rating system and does not
contemplate any further changes at this time except the addition of a
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
8 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
few items to the supervisory qualifications on the form. The agency
points out the act of May 26, 1936, effective August 16, 1936, put
field officials of the post office under the Classification Act of 1923 and
that they remained thereunder until removed by the act of July 6,
1945, effective July 1, 1945. As a consequence, the postal transporta-
tion system had an excellent opportunity to observe their own un-
graded efficiency-rating system and the uniform system and feel that
their present system has effectively combined the advantages of
both systems.
Post office inspection service
Post office inspectors were authorized by an act of Congress, effec-
tive July 1, 1880, and the files of that service indicate that there has
been some form of employee evaluation used in the inspection service
since its creation. For the most part these evaluation or efficiency
ratings have been made in specific terms with respect to the service
rendered. From 1941 until 1945, the inspection service used the
uniform system. On July 1, 1945, inspectors were removed from the
provisions of the act of August 1, 1941 (Public Law 200, 77th Cong.),
and immediately reverted to their own efficiency-rating form.
The efficiency-rating system in use by the post office inspection
service provides for a rating on seven major varieties of work and for
three major characteristics of each of these seven varieties. A copy
of the rating is furnished to the employee in order that he may be
advised of his standing in his agency. The rating system provides for
automatic salary increases and administrative promotions based on
efficiency ratings of "good" or better, and is intended to disclose the
type of work for which the employee is best qualified. Ratings gen-
erally are made by the local official in charge on April 30 of each year
and go through channels to the Chief Inspector for final approval.
This system, which covers post office inspectors, post office inspectors
in charge of field divisions, assistant post office inspectors in charge,
and clerks in the office of inspectors and in the offices of inspectors in
charge, has three separate forms for rating. Inspectors are rated on
Form 516 by the assignment of a numerical value to the elements on
which they are rated. The adjective ratings are determined by the
numerical values assigned to the various elements. A rating of
"unsatisfactory" results from a numerical value of 1; "passable," 2
and 3; "satisfactory," 4 and 5; while "superior" is determined by
values of 6 and 7. There is a question requiring the rater to list the
assignment for which he considers the inspector best qualified and
also a question as to whether the inspector has passed a promotion
examination. Inspectors in charge and assistant inspectors in charge
are rated on Form 516-A, the rating being concerned almost wholly
with those qualities which indicate leadership and administrative
ability. The same numerical values as used in Form 516 are used in
marking these elements and the final rating is determined in the same
manner as for inspectors.
The third class of employees under this rating system are the clerks
and supervisor-clerks attached to the various offices under the super-
vision of inspectors and inspectors in charge. This rating is con-
cerned both with skill in the position and the attitude and conduct
of the employee. The form contains several questions with respect
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Wga~p I~/107 9 21 . -203R4i00 ORA00L 09000 E 5 9
to promotion possibilities and qualifications for promotion. The
:same numerical values are used in determining the rating as are used
for the inspectors and supervisory inspectors" A total of 1,168 em-
ployees are rated under this system.
Appeals may be made, through proper channels, all the way to the
Postmaster General.
Administrative officials in charge of the inspection service of the
post office feel that their efficiency-rating system fully meets the needs
of that service. They feel it is clear, concise, gives a good picture of
a man's ability, performance on the job, and future value in a higher
position. All of these things, they feel, are necessary to meet the
needs of the chief inspector. The regulations pertaining to the
service are brief and are contained in the headquarters operation
bulletins issued by the chief post office inspector.' (See appendix.)
While the Department has no specific changes in mind, it has made
an administrative decision to study the efficiency-rating system in
the near future with a view to determining whether there should be
any changes in it to take care of the changes in management concept
which have resulted from a recent reorganization of the Department.
The Tennessee Valley Authority
The present service-review plan for employees on annual salaries
in the Tennessee Valley Authority has been in effect since August 1,
1945. It was developed through a joint study of the problem by the
agency and employee organizations within the agency. The previous
-service-review plan was adopted in 1936 and provided for semiannual
evaluations which were used mainly for within-grade salary increases.
Detailed reports were made only on employees whose services were
either exceptionally good or unsatisfactory. The present plan is
considered a continuous supervisory activity supplemented by formal
reviews covering specific periods of service. The major purpose of
the review plan is to improve both individual and group performance.
The services of over 5,000 employees on annual salaries are reviewed
under this plan.
Under the present plan, service reports are required after the first
16 months an employee occupies a new position and annually thereafter.
These reports take into account the employee's performance of his
specific job duties and also his effect upon other employees and upon
the working group as a whole. The service of an employee is re-
viewed and reported by his immediate supervisor who delegates or
assigns work to the employee, reviews work to maintain proper
standards and who is directly responsible for work results. It is dis-
cretionary with operating divisions of the agency as to the extent of
further review and approval of service reports by higher-level super-
visors. It is required that the immediate supervisor furnish a copy
of the service report to the employee and arrange an interview with
him for full discussion of the report.
The service-review form contains the usual heading information
identifying the report, and provides space for entering statements of
all job functions performed by the employee during the period covered
by the report. ' For each job function the supervisor evaluates
separately how well the employee met requirements by entering an
(X) mark in one of four columns indicating four evaluation levels.
The columns are headed by the following phrases: (1) "Better than
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved
For111R1~rc
fully adequate performance"; (2) "Fully adequate performance";
(3) "Acceptable performance but some improvement needed"; and
(4) "Unacceptable performance." Below the statements of func-
tions, provision is made for rating "Other elements of service" which
in one rating takes into account cooperation in achieving group ob-
jectives, informal relations with others in the working group, and
adherence to policies and regulations. The rater answers a question
"Were other elements of the employee's service adequate?" by mark-
ing "Yes," "Yes, with some exceptions," or "No." On the back of
the service-review form, space is provided for the rater to explain and
summarize his conclusions regarding work performance and other
elements of service. Total service is evaluated by marking (X) one
of two statements, namely: "Total service was adequate or better"
or" Total service was not adequate." In case the latter statement is
checked the rater is expected to choose one of three possible recom-
mendations listed on the form : "Change of duties in position," "Con-
ditional retention in position," or "Removal from position."
The agency feels that service reviews, in addition to improving the
supervisor-employee relationship and performances of both supervisors
and employees, should be used in making judgments concerning trans-
fer, demotion. promotion, within-grade salary advancement, reduc-
tions in force, and terminations.
The Division of Chemical Engineering of the TVA uses a combined
service report and personnel action form for annual trades and labor
positions. The performance reporting part of this form is basically
similar to the employee service report form used for other employees
in TVA. Another deviation from regular procedures permits a report
to be issued before discussion with the employee if he has resigned with-
out notice or if, for other reasons, he is not available.
The agency feels that the present service review plan is well suited
to TVA because it was developed after many years' experimental
experience with various types of performance review plans, it is a
product of joint thinking and planning by TVA management and em-
ployee organizations, it has been modified as necessary since adoption
to meet current needs and to improve its effectiveness, it is the result
of a long period of development and adaptation, and it is closely inte-
grated with the general. pattern of personnel administration in the
TVA. The agency through survey methods has found that its service
review plan has been accepted very favorably by both supervisors and
employees.
Few changes in review procedure have been suggested by operating
people in the agency and these suggestions related mostly to the ap-
plication of the plan rather than to the report form. No changes in
the plan are contemplated at the present time.
Bonneville Power Administration (Department of the Interior)
The Bonneville Power Administration adopted an efficiency-rating
system in March 1947 with an annual rating date of March 31 of each
year. The agency states that the efficiency-rating system was in-
stalled in response to many requests from the hourly workers in the
Administration. The agency points out that the type of work per-
formed in the Administration differs so greatly from the average
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved ForsReIaaee 200/25 ROIA DF G03 41 5flD99A0VA~511
Government agency that the hourly employees felt that they should
be evaluated under a system which gave attention to their crafts.
It was the decision of management that the uniform system did not
do this. There are 824 employees paid by hourly rates at the Admin-
istration in various types of positions from truck driver to rigger.
The rating form adopted by the Bonneville Power Administration
is very similar to the forms used by the Departments of the Army
and of the Air Force. The 15 rating elements are with 1 exception
very similar to the 15 rating elements used by the 2 Departments,
mentioned above. In fact, in giving the history of the rating system,
the Administration points out that their system is patterned after
the Army system with minor changes. The only change of any im-
portance in the rating form is in element 3. The question in the
Administration's form deals with the ability of the employee to perform
all of the different jobs assigned to his craft. The question in the
Army rating form is concerned with how rapidly the individual per-
forms his work. Under each of the 15 rating elements there are 3
statements, identified as "A," "B," and "C," describing levels of work
performance related to the element. Each one of these three levels
describes performance and tells whether it is weak, adequate, or out-
standing. The 15 elements are so devised that 9 elements will be
used for each of the occupational levels rated. Those general occu-
pational levels conform to the levels in the other systems, elements 1
through.9 being used for unskilled and semiskilled labor, elements 3
through 11 for skilled labor, and elements 7 through 15 for foremen
and supervisors. The final adjective rating is based on a conversion
table which is given in the instructions from which, depending on the
number of A's, B's, or C's, the adjective rating may be obtained.
The five possible adjective ratings conform to the five ratings used in
the uniform system, The use of nine rating elements in the order
provided by the regulations is mandatory.
There are three types of official ratings used by the Administration.
A regular rating is made on March 31 of each calendar year. Proba-
tional or trial-period ratings are made at the end of the first 10 months
of service on all probationary employees. A special rating is made
when there is no appropriate current official rating and a rating is
necessary for administrative action.
The ratings are made by the immediate supervisor, reviewed by a
person higher in the line of supervision who is familiar with the em-
ployee's work, and approved by an efficiency-rating committee, after
which the employee receives an official notice of his rating. Em-
ployees have" the right to appeal within 60 days to a review board
composed of the Director of Personnel, the assistant general counsel,
and the executive secretary, or their alternates. No member of the
board may sit in a case which involves an employee of his division.
The regulations are silent on what administrative action may be taken
in the case of an employee who receives an "unsatisfactory" rating.
On the rating form and on the "Notice of hourly employees official
efficiency rating" form-the form used to notify the employee-the
employee is told that an "unsatisfactory (rating) means that your
general performance and worthiness are unsatisfactory; you are suffi-
ciently deficient in important respects to justify possible transfer to
other work, demotion, or dismissal unless marked improvement
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
12 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
occurs." There being no range of hourly rates for a job, a rating of
"fair" involves no wage decrease.
The agency believes that the efficiency-rating system which it has
adopted for hourly employees meets the needs of the agency and the
employees in a satisfactory manner. They are not contemplating
any major changes in the system at this time.
Department of Defense
The Department of Defense has not, as of this writing, established
a single efficiency rating system for the ungraded service. A careful
study of the systems in use in the three components of the Department-
the Army, the Air Force, and the Navy-was undertaken in June of
1949, at the request of the Bureau of the Budget. This study, which
extended over a 6-week period, resulted in the Department reaching a
decision that for the time being there would be no major changes made
in the efficiency rating systems now in use. A careful analysis was
made of these systems which showed that they were well designed for
the purposes they serve.
The study showed, however, certain differences in the treatment of
employees which the Department regarded as undesirable. A com-
mittee, composed of representatives of the three services, was ap-
pointed to study these differences and to arrive at a standard criterion
for the ungraded efficiency rating systems now in use. To date, the
committee has not reached any decision. In the meantime, the in-
dividual systems now in use in the Department of Defense will be
described under the three services.
Department o f the Air Force
Prior to 1944 the Air Force had no compulsory efficiency rating
system for employees who were not subject to the Classification Act
and the uniform efficiency rating system. Commanding officers could
use the uniform system, and some of them did, or they could use what-
ever system filled their needs. In 1944 the Air Force began work on
an efficiency rating system especially designed for their ungraded
employees. As a starting point, they studied systems in use in
industry and Government-systems which were utilized for both
administrative and industrial personnel. As a result of their work,
the Air Force devised an experimental system along the lines of the
present system, using informal language and a different scoring
method. The initial system did not provide for any appeal to higher
authority in the same installation, nor was it so worded as to clearly
indicate levels of performance under the element questions, and was,
therefore, regarded as not wholly desirable.
In view of the clear language in sections 12 and 14 of the Veterans'
Preference Act, the Air Force reached a decision that the experimental
system would have to be formalized and simplified so that the scoring
method was quickly and easily understood and so that it would be
necessary for supervisors and employees to discuss the ratings and
generally familiarize themselves with the basis for efficiency ratings.
At about this time, higher management in the War Department
reached a decision that an efficiency rating system for ungraded
employees was essential to meet the needs of the Veterans' Preference
Act. A committee was appointed, composed of representatives of the
Army Service Forces and the Air Forces, the two component parts
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07125 : CIA-RDP57-00384R000500090005-5
STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE 13
of the then War Department which had many ungraded employees,
and on January 20, 1946, the present ungraded efficiency-rating
system was adopted.
The committee made every effort to keep the system simple, easily
understood by the type of people which for the most part would be
using it, and yet obtain for management a real appraisal of the em-
ployees of any given installation. It was the decision of the agency
that some form of rating of employees that was uniform in its applica-
tion and which did a reasonable job of appraisal was an essential tool
of management. Rapidly decreasing personnel quotas, changes in
management objectives, other problems that faced the Department
after the war, had all contributed to the fooling of top management
that some form of appraisal of the employees was an absolute necessity.
The committee devised a form which they felt would be fair to
management and the employees, quickly and readily understood by
the employees and their supervisors. As finally approved, the rating
form contained 15 ratings elements, each stated in question form.
Under each of these 15 elements there are 3 statements describing
Now,i levels of work performance related to the element. Each one of these
three describes the employee's performance and tells whether it is
"weak," "adequate," or "outstanding." The 15 elements are so
devised that 9 elements will be used for each of the 3 general occupa-
tional levels rated. For instance, the first 9 elements on the form are
used to rate unskilled or semiskilled workers; elements 3 through 11
are used to rate skilled workers, while the last 9 elements, 7 through
15, are used for rating foremen, supervisors, and others in adminis-
trative capacities. Use of the elements is mandatory, there being
no choice of elements on the part of the rater. Ratings are given by
the immediate supervisor, reviewed by the next-in-line supervisor,
and approved by the civilian personnel officer of the installation. A
change in the regulations has been prepared which will delegate
authority for final approval of ratings to an efficiency rating committee.
Five possible adjective ratings or over-all evaluations are given
which conform to the five ratings used in the uniform system. The
markings on the elements are similar to the uniform system, an A
indicating plus or outstanding, B, check or adequate, and C denotes
minus or weak. The method of arriving at the adjective rating,
however, is different from that of the uniform system. A conversion
table is given in the instructions from which, depending on the number
of A's, B's, or C's, the adjective rating may be obtained. Air Force
has an administrative unofficial rating given 30 days after appoint-
ment or transfer to another position. There are now approximately
72,000 ungraded employees evaluated under this system.
It is significant to note that there are some differences in the
systems under the Air Force and the Army, even though they are now
substantially the same and were exactly the same on the date of adop-
tion. The major differences are those: the Air Force rates twice a
year while Army rates once a year; also, Air Force provides for special
ratings when necessary in lieu of entrance ratings; the Air Force does
not now require a written warning in advance of a "fair" or "unsatis-
factory" rating, while the Department of the Army makes such warn-
ing mandatory. Amendments to the regulations have been prepared
which will require an entrance rating, ratings semiannually on anni-
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
14 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
versary dates, and mandatory warnings to employees at least 30 days
in advance of a "fair" or "unsatisfactory" rating.
The Air Force feels that efficiency ratings are a necessary tool of
management for the evaluation of employees and a formalized way of
making sure that supervision is doing its job. It also provides a
formal method for employee and supervisor to discuss and review
performance. They regard this discussion of performance as neces-
sary for supervision as well as for the employee. Efficiency ratings
in the ungraded service are used for within-wage step promotions.
Wage increases may be made to the middle of a wage grade on the
basis of a "good" efficiency rating. For increases above the middle
of a wage grade it is necessary that an employee have a "very good"
or better rating. One salary step demotion is prescribed for a rating
of "fair" if the employee is above the middle step of his grade. Dis-
missal or reduction to a lower grade is prescribed for an "unsatis-
factory" rating.
The Air Force has been studying the results of its efficiency
rating system and has found that on the whole both employees and
supervisors have reacted very favorably to the present system. They
feel that it is a system which they can understand and evaluate.
The agency feels that some credit-perhaps much of the credit-
for the favorable reception accorded the present efficiency rating
system is due to the time and effort put in by the agency in indoctrinat-
ing employees and supervisors in the theory, regulations, and prac-
tical purposes of the efficiency rating system adopted by the agency.
No substantial change is contemplated in the regulations as they are
now in use other than given above.
Department of the Army
Prior to the enactment of the Veterans' Preference Act of 1944,
section 12 of which specified that efficiency ratings would be one of
four factors used in determining retention preference order, the War
Department (as it then existed) had not adopted an efficiency rating
system for ungraded employees. Ungraded employees could receive
efficiency ratings, and a variety of rating systems were used, including
the system prescribed by the Civil Service Commission for employees
rated under the Classification Act, commonly known as the uniform
system. It was not mandatory that ratings be given. Some installa-
tions did not give ratings at all, while others rated as needed. The
use of ratings as well as the system to be used was left to the adminis-
trative discretion of operating officials.
After the approval of the Veterans' Preference Act, it was clearly
indicated to the Department that some form of evaluation of em-
ployees not subject to the uniform system was needed if management
was to retain its best-qualified people in the coming reductions in
force. The Secretary of War instructed the Army Service Forces and
the Air Forces (both in the War Department at that time) to devise
and develop an efficiency rating system for ungraded employees.
Considerable study was given to this matter. The first system,
devised by the Air Forces in the fall of 1944, was not wholly accept-
able, it being felt that the system as then devised did not meet the
needs of all services in the agency. A three-man committee then
devoted their efforts to establishing a system for the ungraded em-
ployees which would meet with the approval of the Civil Service
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE 15
Commission and serve the needs of the War Department components.
On January 20, 1946, the present ungraded efficiency-rating system
was adopted.
The committee made every effort to keep the system simple, easily
understood by the type of people which for the most part would be
using it, and yet obtain for management a real appraisal of the em-
ployees of any given installation. It was the decision of the agency
that some form of rating of employees that was uniform in its appli-
cation and which did a reasonable job of appraisal was an essential
tool of management. Rapidly decreasing personnel quotas, changes
in management objectives, other problems that faced the Department
after the war, had all contributed to the feeling of top management
that some form of appraisal of the employees was an absolute necessity.
The committee devised a form which it felt would be fair to man-
agement and the employees, quickly and readily understood by the
employees and their supervisors. As finally approved, the rating
form contained 15 rating elements, each stated in question form. Un-
der each of these 15 elements there are three statements describing
weak, adequate, and outstanding levels of work performance related
to the element. One of these three is chosen to describe the employ-
ee's performance. The 15 elements are so devised that 9 elements
will be used for each of the three general occupational levels rated.
For instance, the first 9 elements on the form are used to rate unskilled
or semiskilled workers; elements 3 through 11 are used to rate skilled
workers, while the last 9 elements, 7 through 15, are used for rating
foremen., supervisors, and others in administrative capacities. Use of
the elements is mandatory, there being no choice of elements on the
part of the rater. The new regulations which will go into effect about
January 1, 1950, provide for a deviation in the adjective rating where
one or more elements do not apply. Ratings are given by the immedi-
ate supervisor, reviewed by the next-in-line supervisor, and approved
by an efficiency-rating committee. The committee, which is approved
by the head of the installation, must be composed of from three to
five members with at least one member from the employees rated
under the uniform system and one member from employees rated
under the ungraded system. The committee reviews and approves
all ratings given at the installation.
Five possible adjective ratings or over-all evaluations are given
which conform to the five ratings used in the uniform system. The
markings on the elements are similar to the uniform system, an A
indicating plus or outstanding, B,.check or adequate, and C denotes
minus or weak. The method of arriving at the adjective rating, how-
ever, is different from that of the uniform system. A conversion
table is given in the instructions from which, depending on the number
of A's, B's, or C's, the adjective rating may be obtained. One salary
step decrease is prescribed for a rating of "fair" if the employee is
above the middle step of his grade. Dismissal or reduction to a
evlua evaluated There
lower apgrade is
proximately 55,000 ungraded l employees rating.
now under
this system.
The only variations from the system of any consequence are the
exceptions granted to the Sixth Army and to the Adjutant General's St. Louis ' Mo., to use task
statements with written standards. Center At task t atement and standard
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
16 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
of performance is a description of the duties of a specific position and
contains a list of the specific tasks with a statement as to the level of
performance which is required for satisfactory performance of each
task. In addition, most task statements contain a rating element or
task which evaluates the individual in his presence on the job, ability
to work with others, etc. Instead of using the element evaluations
generally used under the uniform system or the 15 elements provided
by the Army system for ungraded employees, the employee is rated
on the relatively few task statements appropriate to his job. The
Sixth Army has applied this deviation to all of the employees under
the Sixth Army, irrespective of whether they are rated under the
uniform system or the Department system for ungraded employees.
Since the system was devised, the War Department has become
the Department of the Army under the Department of Defense.
The Army feels that this efficiency rating system meets the needs,
of its administrative officials who have charge of the ungraded em-
ployees; that it is simple to use, easy to understand, and that by
and large it is serving its intended purpose. On the whole, inspections
and follow-ups have shown that the reaction of operating people to
the system has been very good. Ratings are given on a yearly basis.
The system, as devised, requires an entrance rating, a rating 6 months.
after date of entrance, and an anniversary rating thereafter. One
deviation has been made in the anniversary rating in the case of one
large bureau which preferred to retain the annual rating date of
March 31.
Under this system, employees have the right of appeal, the regula-
tions regarding appeals being the same for both the uniform and
ungraded systems. There is also a mandatory provision in the regu-
lations with respect to a written warning of not less than 30 days or
more than 6 months to an employee whose performance indicates that
his rating will probably be "fair" or less.
Efficiency ratings are widely used in the Department as a means
of discussion between supervisors and employees with respect to work
performance, it being mandatory to discuss the rating when given,
as a means of evaluation of employees considered for promotion and
for the normal uses of efficiency ratings as specified in the uniform
system. They also form a basis for step increases within the wage
range. Am
A system of efficiency ratings for ungraded employees in the Navy
Department was originally established in 1925 and continued in use
without notable change until June 30, 1945, when the shop efficiency
rating system was established. This system provided for numerical
efficiency rating but was modified later to provide for adjective
ratings similar to those used under the uniform efficiency rating
system. The shop system was approved by the Civil Service Com-
mission in accordance with the provisions of the act of July 31, 1946
(60 Stat. 751).
The shop efficiency rating system was designed specifically for
rating performance of employees in trades positions where super-
visors ordinarily are not concerned with paper work to much extent
:And usually dislike responsibilities requiring paper work. The
agency feels that the rating form is designed in such a way that a
Department of the Navy
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved
minimum amount of instruction and of rating time is needed for its
effective use. Under the system, ungraded employees receive an
official rating each 6 months, the rating dates being left to the dis-
cretion of the different activities. Approximately 225,000 ungraded
employees are presently rated under the system.
Under the shop system the immediate supervisor who controls
and is responsible for the employee's work is the rater. The rating
passes through several levels of supervision for review and is signed by
a higher-level supervisor as a reviewer. The rating may be questioned
at any level of the reviewing process. Final approval of ratings
rests with a central review board. An optional rating method is
provided and is utilized at certain activities whereby a committee of
supervisors having knowledge of the employee's work act jointly as
the reviewing authority before the rating reaches the central review
board. The rating forms used under this system list rating factors
which are explained on the forms. The form for nonsupervisory
employees has, as rating factors, "knowledge of work," "quantity of
work," "quality of work," and "adaptability." The form for super-
visors has "use of supervisory and occupational knowledge," "effec-
tiveness in getting work done," "effectiveness in obtaining high-
quality work," and "personal characteristics shown on the job."
There are four evaluation levels for each rating factor, each level
containing statements indicating degrees of performance. The per-
formance evaluation is made by the rater indicating, through the
use of a check mark, the selected level which most nearly describes
the performance of the employee. By the use of a special conversion
table, an adjective rating is determined on the basis of the number of
rating factors marked in the different performance evaluation levels.
Five adjective ratings are provided; namely, "excellent," "very
good," "good," "reasonably satisfactory," and "unsatisfactory."
The system provides that the efficiency rating should be discussed
with the employee by his supervisor before he is formally notified of
the rating. Agency regulations prohibit the making of a rating less
than "good" unless the employee has been advised, either orally or
in writing, wherein his performance fails to meet requirements for a
"good" rating, has been told how he may improve his performance
to attain such. a rating, and has been given the opportunity and super-
visory assistance needed to make the improvement.
An employee receiving an official rating of "unsatisfactory" is
required to be reassigned, demoted, or separated for inefficiency.
No adverse action is required for a rating of "reasonably satisfactory";
however, administrative measures are encouraged to bring the em-
ployee's performance to a full satisfactory level. Ratings are used
formally for reduction-in-force purposes and within-grade pay in-
creases. Other administrative uses, such as promotion and transfer,
are left to the discretion of the several activities, but full use of the
ratings is advocated by the Department. Other than the optional
rating method, the system is uniform for all naval activities.
The Department feels that the shop system is especially adaptable
to its uses because it is easily understood by supervisors and does
not require much time for them to make accurate ratings. It was
indicated that the system had been accepted very favorably by
operating people, and about the only objections of any consequence
concern one of the rating factors, namely, "knowledge of work,"
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25: CIA-RDP57-00384R0005000900 RU ICE
OF EFFICIENCY RATING SYSTEMS IN E ICE
which in some quarters had been interpreted to relate to personal
qualifications rather than to demonstrated knowledge of assigned
work. However, as a whole, the system has been found to work
very effectively, and no changes are anticipated at this time.
United States Maritime Commission
The Maritime Commission adopted an efficiency rating system for
its ungraded employees for the first time in February 1948. In
adopting this system for its employees, it gave credit for the develop-
ment of the system to the Department of the Air Force. Its system
is an adaptation of the system in use by the Departments of the Army
and the Air Force, there being only slight variations from these
systems.
The Maritime Commission's efficiency rating form is self-explana-
tory. The face of the form gives all information necessary to identify
the employee, to explain to him and to his supervisor the five adjective.
ratings possible under the system, and contains a conversion table
which shows what weight is given to the element evaluations. On the
reverse side of the form are the 15 rating elements, each with its 3
levels of performance, which is the same as that used both by the Army
and. the Air Force.
In adapting this form to its use, the Maritime Commission elab-
orated on two rating elements to point out the adverse effect absentee-
ism may have on dependability and work schedules, questions 2 and
10. Question 9 on the Army's form p'rtains to the care, conservation,
and maintenance of material, supplies, equipment, and tools. This,
and the throe levels of performance pertaining thereto, have been
shortened by the Maritime Commission to reflect the employee's
record for care and maintenance of equipment. The form itself, in
addition to containing the conversion table, has been designed so as
to readily reflect visually the ratings as given.
The form omits reference to the employee's rights to appeal to a
statutory board of review, there being no such rights at the time the
form was devised. However, the agency assumes that the personnel
office to whom the employee is referred will advise an employee fully
as to his appeal rights. There are other differences in the maritime
system as compared to the one used by the Department of the Army.
The maritime system refers to the 3 groups rated under the 15 ele-
ments as groups I, II, and III, instead of groups A, B, and C. Per- A k
haps the most important difference is that it provides for some dis-
cretion in the selection of the elements, an administrative officer
being able to substitute one element for another if necessary to properly
reflect an employee's services. It is mandatory, because of the
conversion table, to rate nine elements but some flexibility in the
selection of the elements to be rated is permitted by the Maritime
Commission. The regulations provide for an adequate and effective
training program.
Ratings are given semiannually, on April 30 and October 31, with
fixed dates for completion of each step of the rating process to the
point that the employees receive their ratings within approximately
6 weeks after the closing date of the rating period.
Provisions have been made for two types of ratings: a semiannual
rating, which is a regular rating, and a special rating, should such a
rating become necessary. Special ratings may be given to employees.
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved
who do not have a rating within the grade or position in which they
are serving should it be necessary to have a rating for reduction-in-
force purposes or for some other reason where an appropriate efficiency
rating is essential. A third rating is permitted when, in the adminis-
trative judgment, such a rating is desirable. This rating, called an
administrative-unofficial rating, may be made only with the advance
approval of the field personnel officer and may not be used for purposes
for which official ratings are required.
The Maritime Commission has not laid down any policy with respect
to warnings to employees when it is apparent that the employee's
service will be less than "good." The regulations are completely
silent in this respect.
A survey has recently been made by the Maritime Commission to
determine the efficacy of the efficiency-rating system as well as of the
reaction of both employees and management to a system. The
official who made the survey found that not only were the employees
pleased with their efficiency-rating system but that management had
likewise found it desirable. The mandatory provisions for interviews
with each employee during the course of the rating and the require-
ments that supervisors discuss performance with employees in specific
rather than over-all terms, have been found to be very useful aids to
management. The agency believes that the adoption of the present
system has filled a need by improving employee and supervisory
relationships as well as expediting the work. No changes are con-
templated at this time, it being generally felt that the present form,
while not perfect, reflects performance of employees very satisfactorily.
The Panama Canal
The Panama Canal has adopted a craft efficiency rating. system
designed for rating the performance of employees in craft positions
and for supervisors of such employees. Employees are rated 6 months,
after probationary appointment, 6 months after each change to a
position of different service, class, or grade, and otherwise annually
on December 31.
Under the craft system the immediate supervisor who controls and
is responsible for the employee's work is the rating official. The,
reviewing official is the supervisor highest in line of authority above
the rating official who has personal knowledge of the general perform-
ance of the employee to be rated and of the standards of performance
Nue of the unit to which the employee is assigned. Ratings are approved
by an efficiency rating committee.
The rating form for craft employees provides for four rating factors:
"Knowledge of work or trade," "Quantity of work," "Quality of
work," and "adaptability," while the. rating form for craft supervisors
provides for four rating factors: "Use of supervisory and occupational
knowledge," "effectiveness in getting work done," "effectiveness in
obtaining high quality work," and "personal characteristics shown on
the job." Each of these rating factors has five degrees of performance
on one of which the employee must be rated. The space for each of'
these five degrees of performance contains a statement describing the
performance necessary for that particular level. A conversion table
is used to convert the rating into the adjective ratings "excellent,"
"very good," "good," "fair," and. "unsatisfactory"; the same adjective
ratings as are used in the uniform system. Agency regulations pro
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
20 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
vide that no "fair" or "unsatisfactory" regular efficiency rating shall
be made or recognized as an official rating unless advance warning
was given to the employee, such warning to be in compliance with
the civil service procedures for the uniform system. Efficiency ratings
in the Panama Canal craft efficiency rating system are used for
reduction in force purposes as well as other uses generally prescribed
for the uniform system. Since pay is set on an hourly basis, there
are no within-grade pay increases.
Department of the Treasury
The efficiency-rating system for ungraded employees of the Treasury
Department was approved by the Civil Service Commission in accord-
ance with the provisions of the act of July 31, 1946 (60 Stat 751).
The Treasury Department as such did not have an efficiency-rating
system for ungraded employees until after the passage of the above-
named act. There were four bureaus in the Treasury Department
at that time which had a number of ungraded employees and each
bureau head was at liberty to adopt an efficiency-rating system of his
own selection, use the uniform-efficiency-rating system, or refrain
from rating the employees in any way. Historically, the different
bureaus chose different methods of ratings. Specifically, the Mint used
the uniform system for all employees, the Coast Guard used a com-
bination of the uniform system and the ungraded system of the Navy,
the largest shipyard using the ungraded system of the Navy, while
all other yards, field installations, and depots used the uniform system
for all employees. The Bureau of Federal Supply (now transferred
out of the Treasury) used the uniform system for all of its employees,
both graded and ungraded. The Bureau of Printing and Engraving
did not use an efficiency-rating system of any kind for its ungraded
employees.
After the approval of the Veterans' Preference Act of 1944, the
Treasury Department gave consideration to some form of evaluation
of employees in order to comply with provisions of section 12 of that
act, which provides that veterans with efficiency ratings of "good" or
better shall be retained in preference to competing nonveterans.
Since all but one of its bureaus, however, were using efficiency ratings
the Treasury devoted considerable time to their study and on May 13,
1947, published circular 14, which contained instructions for a uniform
ungraded system for the Treasury Department. This supplanted the
other ungraded systems in use in the bureaus.
Their first system was patterned after the system used in one of
the bureaus, the Coast Guard, for its largest installation. Further
study of the matter convinced the Department that it would be well, if
possible, to synchronize the ungraded system with the uniform system,
using, wherever possible, the same standards, terminology, and
concept. Accordingly, considerable study was again devoted to the
rating system with the result that the Treasury adopted a very
much simplified report of efficiency rating for nonsupervisory
ungraded employees, and a similar form for supervisory ungraded
employees. In arriving at the new system, a committee composed of
representations from the bureaus affected met and formulated a
rating system and pattern. In considering the new system, the
Bureau of Engraving submitted the draft of the revised forms and
regulations to union committees, division superintendents, and fore-
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 :CIA-RDP57-00384Q~~~~9~Q~EQa~
STUDY OF EFFICIENCY RATING SYSTEMS IN FE
men in the bureau. Before final acceptance of the system the
Department had the bureaus concerned use this system on a trial
basis and made such changes as seemed desirable as the result of
this trial run. After adoption of the revised forms and regulations,
the same union committees, division superintendents, and foremen
of the Bureau of Engraving were called in and sat with officials of
the bureau in selecting the rating pattern for the positions evaluated,
which patterns were approved by them. The definitions for degrees
of performance are similar to those of the uniform system, as are the
element markings, and over-all appraisals. With this simplification
of their efficiency-rating system they provided that the efficiency-
rating committees for the uniform system would act on and approve
all types of ratings, and any appeals from the ratings which are not
adjusted in the agency would be heard by the statutory board of
review.
The regulations pertaining to both the uniform and ungraded systems
are the same. Entrance ratings and regular ratings are the only two
types of ratings which find a permanent place in the employee's file.
Unofficial administrative ratings may be made for either system only
where essential for advisory needs of rating and reviewing officials,
such as when there is a change of supervision during the rating period.
January 31 is the rating date for all ungraded employees.
Appeals procedures are the same for the ungraded as for the uniform
system and comply with the general regulations pertaining to that
system. Warnings prior to "fair" or "unsatisfactory" ratings are
mandatory under both systems. Adverse actions based on ratings
are the same as they are for the uniform system and require demotion
of one step for employees receiving a "fair" rating and a salary above
the middle step of the wage range, while an "unsatisfactory" rating
requires that the employee be reassigned, demoted, or dismissed.
Generally speaking, the agency makes the same use of the ungraded
ratings as it does of the uniform system ratings. Both are used as a
means of discussing, at least annually, work performance with em-
ployees. Ungraded ratings are used for purposes of step increases
within the wage range.
The Department feels that the mechanics of its system are as satis-
factory as can be devised to fit the circumstances. It gives a basis
for rating performance similar to the basis of the uniform system,
appears to be understood by most supervisors, and because of its
similarity to the uniform system, requires no additional administrative
activity. No serious complaint against the system has been received
from employees or management. Only two employees appealed their
ratings during the current year. However, there have been some
objections to the rating system from a few supervisory employees.
Basically, these objections are the same as those made against any
rating system. Some supervisors felt that they could evaluate
employees in general terms with%ut specifically studying the element
factors which are concerned with the job and objected on occasion to
evaluating employees in the terms of the elements which are concerned
with their positions. The Treasury Department plans to continue
its ungraded system on the basis of similarity to the uniform system,
and will consider revision of the ungraded system if the uniform
system is changed.
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
22 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
Approximately 4,500 employees are now under the ungraded system.
In. addition, the new Classification Act of 1949 will place approxi-
mately 4,000 clerical-mechanical employees under the ungraded
system, making a total of about 8,500 employees of the Department.
who are evaluated under this system. The Department estimates
that the clerical-mechanical employees will be rated under the un-
graded system for the first time on January 31, 1950.
Veterans' Canteen Service (Veterans' Administration)
The efficiency rating system for the Veterans' Canteen Service was
established pursuant to the act of August 7, 1946 (Public Law No. 636,
79th Cong.), as amended. The system became partially effective in
August 1947, and was fully in effect for the February 1948 efficiency
ratings. Under the system approximately 1,400 full-time and 300 part-
time excepted employees are rated. The Canteen Service operates 135
canteens with the number of employees in each varying from 3 to 60
people. The employees occupy many various types of positions, such
as sales clerk, stock clerk, barber, dishwasher, and cook. Adminis-
trative employees directing the Veterans' Canteen Service are rated
under the uniform efficiency rating system. The canteen officer and
his assistant are rated on standard form 51 by administrative choice.
All other employees in the canteens themselves are rated under the
Canteen Service system. One of the primary reasons for the establish-
ment of the efficiency-rating system was the need for ratings in case of
reduction in force in view of the provisions of the Veterans' Preference
Act.
Before the rating system was established, a number of systems used
in private industry for rating employees in similar types of positions
were studied. However, in view of requirements in this particular
service, a, new form was designed which would comply with the
principles of efficiency rating systems used in other parts of the Federal
service. The rating form, titled "Analysis of Service," consists of six
rating items, all of which are rated for each job except the last item,
titled "Attitude Toward Patients and Other Customers," which is not
pertinent to certain positions. Provision is made for three evaluation
levels for the rating items; namely, "unsatisfactory," "satisfactory,"
and "outstanding." Numerical values are assigned to each evaluation
level. The values are different for each rating item. All of the
numbers in the unsatisfactory column are of a negative value and
serve to reduce the total score of the rating. By a conversion table
the appropriate adjective rating is determined. There are four final
adjective rating levels; namely, "unsatisfactory," "satisfactory,"
"outstanding," and "superior."
The canteen officer or his assistant serves as the rater, and the rating
is reviewed by a committee at a field office which handles the adminis-
trative affairs of the canteen. One member of the committee is the
auditor or field supervisor who hasjurisdiction over the particular
canteen and who is familiar with the operation of that canteen. It
is required that the proposed rating be discussed with the employee
by the canteen officer at the time of its preparation. Efficiency
ratings are used for information purposes only; therefore, an "unsatis-
factory" rating would not necessarily result in removal of the employee,
and a "superior" rating would not necessarily result in a promotion
of an employee. The agency believes that the primary value of an
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE 23
efficiency rating is the fact that it compels supervisors to inform
employees as to what the supervisors think of them. It is felt that
the discussion, which is informal in nature, will reveal factors which
affect an employee's performance, such as faulty equipment, improper
working space, inadequate instructions, or misunderstanding of duties.
Efficiency ratings are utilized also in analyzing the effectiveness of
canteen officers in running their organizations, particularly the effec-
tiveness of training programs. There are no established variations
from the rating process as outlined in the operating manual.
The efficiency rating system was designed to eliminate as much
paper work as possible from the duties of the canteen officer. The
headings of the rating forms are filled in at the field offices. Only six
rating items, those believed to be the simplest and most readily
understood, are used.
Consideration is being given to revising the system because the
canteen people do not like numerical ratings. They have under con-
sideration a plan whereby adjective ratings would be determined on
the basis of over-all definitions of performance and not directly on the
Noe basis of elements that would be evaluated. The agency feels that
the rating items should be improved and the number of items increased
so as to fully reflect all of the performance factors that should be
-evaluated. It is desired to design a form which will not need further
explanation or amplification for its effective use by raters. The
rating process has stimulated an interest on the part of supervisory
employees so that they desire to participate in the design of a now
rating form. Because ratings are used for information purposes only,
employees have indicated no special interest in the ratings, and only
one rating has been appealed since the system went into effect. Under
the system written appeals may be filed with the field director, who
considers appeals with a committee in his office.
Uniform efficiency rating system prescribed by the Civil Service Com-
mission
There are records of efficiency-rating systems in Government depart-
ments as early as 1887, when they were required to be used in promo-
tion examinations. Presidents Cleveland and Benjamin Harrison
both made efforts to have efficiency ratings made so that advancements
to higher-paying positions would be based on efficiency. A commit-
tee, appointed by President Theodore Roosevelt in 1905, recommended
the preparation of semiannual efficiency ratings. It was not until
1912, however, that any serious attempt was made to provide for uni-
form systems of efficiency ratings.
By the act of August 23, 1912 (37 Stat. 413, 414), the Civil Service
-Commission was directed to establish uniform systems of efficiency
ratings for all departmental services in the District of Columbia, and
heads of departments were ordered to rate employees in keeping with
such systems.
Under this authority, the Division of Efficiency of the Commission
assisted in planning and installing a rating system in the Division of
Dead Letters in the Post Office Department. Shortly thereafter, in
1914, the system was modified and extended to all departmental ac-
tivities of the Post Office Department.
The Division of Efficiency of the Commission became an independ-
ent Bureau of Efficiency by the act of February 28, 1916 (39 Stat. 15),
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
24 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
and continued cooperative efforts with different departments in the
establishment of rating systems.
On October 24, 1921, the President directed the Bureau of Efficiency
to "prescribe a system of rating of employees of the classified services.
of the Federal Government in the District of Columbia." Heads of
departments and independent establishments were directed to apply
this system to all employees (Executive Order No. 3567).
Section 9 of the Classification Act of 1923 (42 Stat. 1488), authorized
the Personnel Classification Board to review and revise uniform sys-
tems of efficiency ratings, and established standards for such rating
systems. The law required a rating level which must be attained to
receive salary adv?ncement within a grade, a rating level to permit
retention in the grade without advancement or reduction in pay, a
rating level to require reduction in pay within the grade, and a rating
level which would require dismissal or demotion in grade. Dismissals,
demotions, and pay reductions required by ratings were to be made by
heads of departments, subject to the approval of the Board.
By the act of June 20, 1932 (47 Stat. 416), the functions, powers, and
duties of the Personnel Classification Board were transferred to the
Civil Service Commission, effective October 1, 1932. The following
year the Bureau of Efficiency was abolished by the act of March 3,
1933 (47 Stat. 1519), and its property and records were transferred to
the Bureau of the Budget.
Section 7 of the Ramspeck Act of November 26, 1940 (54 Stat. 1215),.
authorized the establishment of independent boards of review to hear
and decide efficiency-rating appeals.
Efficiency ratings for employees in the field services were first re-
quired by the act of August 1, 1941 (55 Stat. 614), which directed the
Commission and heads of departments and independent establishments
to apply the efficiency-rating provisions of the Classification and Ram-
speck Acts, "as nearly as practicable," to all employees paid under the
compensation schedules of the Classification Act.
Efficiency ratings as a factor in reductions in force had been pre-
viously authorized by Executive orders, but their use was required by
law under the terms of section 12 of the Veterans' Preference Act of
June 27, 1944 (58 Stat. 387).
The act of July 31, 1946 (60 Stat. 751), requires Civil Service Com-
mission approval for any efficiency-rating system used for rating em-
ployees in the executive branch of the Government, except the Ten-
nessee Valley Authority and the field service of the Post Office Depart-
ment.
The first efficiency-rating system established under the authority of
the Classification. Act was developed around a "graphic rating scale."
Supervisors made check marks in black ink indicating their opinion
of services rendered under different elements or factors on graduated
scales. These check marks were reviewed by higher-level supervisors.
who concurred in the initial marks or indicated differences of opinion
by check marks in red ink. The rating forms were then routed to
central offices, known as boards of review, where codes were applied
to produce a final rating on a percentage basis, specific to two decimal
points. These boards of review were also authorized, in their judg
ment, to adjust ratings to conform to a predetermined pattern of dis-
tribution.
This rating system was devised to eliminate the personal element
from the ratings. The supervisor did not make the rating-he merely
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE 25
reported his opinion of performance under a group of factors which
applied to the employee's position. The reviewing supervisor did not
make or approve a rating-he merely reviewed the initial supervisor's
judgment as to performance under the various factors. The board of
review did not use personal opinion but merely applied a code of
weights to the opinions of the supervisors.
During the 10 years of its use, the graphic scale system of rating was
very unpopular. No employee was able to obtain an explanation of
his rating from any of his supervisors. Supervisors had difficulty in
advising employees how to improve performance in order to receive
a better rating. Everyone was suspicious of the results at every.
rating period.
After a series of conferences with representatives of all departments
and independent establishments, the Commission revised the efficiency-
rating system in 1935. In every possible way, the revised system was
the direct opposite of the graphic rating scale system. Factors were
grouped under three headings: "Quality of performance," "Produc-
tiveness," and "Qualifications shown on job." Each factor was
NW, marked with a "plus" for strong, "minus" for weak, or a check mark if
"neither strong nor weak." Numerical ratings were assigned under
each heading; 1 or 2 if "excellent," 3 or 4 if "very good," 5 or T6 if
he
"good," 7 or 8 if "fair," and 9 or 10 if "unsatisfactory."
numerical ratings were independent of the factor marks. The final
rating was the sum of the three numerical ratings. Adjective ratings
were as follows: 3 to 7 "excellent," 8 to 13 "very good," 14 to 19
"good," 20 to 24 "fair," and 25 to 30 "unsatisfactory." There were
no definitions. No adjustments were permitted to reach a desired
pattern of distribution.
This system also became unpopular because of the absence of any
guide lines to indicate what kind of performance was excellent, very
good, good, fair, or unsatisfactory. There was almost no basis upon
which reviewers of ratings could discover differences of rating stand
ard.s. Employees soon learned that what was considered as "Good"
performance in one department was rated as "Excellent" in a different
department.
Numerous changes have been made since 1940 in the rating system
for employees in Classification Act positions. Rating elements have
been made more specific. Supervisory judgments are reported on the
rating elements by the use of symbols designating three evaluation
levels. Plus marks now indicate outstanding performance and not
merely a show of strength. A check mark signifies adequate per-
formance and not "Neither strong nor weak." Numerical ratings
were modified and then eliminated. Final adjective ratings are keyed
to the element marks by a definite standard.
The uniform efficiency rating system has been devised by the Civil
Service Commission (with the cooperation of the Federal agencies
through the Federal Personnel Council), and applies to all Federal
employees occupying positions paid under the compensation schedules.
of the Classification Act.
Ratings are prepared initially by the immediate supervisor, reviewed
by higher supervisors, and reviewed and approved by an efficiency
rating committee which exercises the authority of the head of the
agency. Regular efficiency ratings are made on a standard form which
contains 20 factors that are applicable to nonsupervisory positions
and 11 factors that are available for administrative, planning, and
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
26 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
supervisory positions. Only those factors which pertain to the position
of the employee are used for the appraisal of that employee's work
performance. In a few experiments now being conducted with the
approval of the Commission, the work operations or the duties of the
position are used instead of the factors listed on the rating form.
After the appropriate factors are selected for a particular position,
the especially important ones are shown. by underlining. Then a
symbol is placed in front of each pertinent factor indicating whether
the employee's performance has (/) met, (+) exceeded, or (-) failed
to measure up to job requirements. On the basis of these evaluations,
a final adjective rating is assigned.
Five adjective ratings are provided: Excellent, very good, good,
fair, and unsatisfactory. Each employee is notified of the particular
adjective rating assigned by means of a standard form which tells the
significance and meaning of the rating and what initial step he may
take if he is not satisfied that the rating is correct. Under the uniform
plan, the employee has the right to see his own rating form, to know
the ratings of other employees of his agency, and to appeal his rating 40 k
to a board of review.
Up to January 15, 1948, three types of ratings were provided :
Regular, probational, and special. Regular ratings were to be made
as of March 31 of each year, probational ratings at, the end of the
tenth month of the probational period, and special ratings when there
was no current appropriate rating on record and one was needed for
within-grade salary advancement or reduction in force. After the
cessation of hostilities, when the size of the Government service was
being reduced rapidly, a great many special ratings were made which
were based on short periods of service. Consideration of this prob-
lem resulted in a change in the uniform efficiency-rating system which
eliminated special ratings. Effective January 15, 1948, the system
provides for two types of ratings: Entrance and regular. An entrance
rating is given when an employee is appointed or changes his position.
A regular rating is assigned when the employee has been in his posi-
tion for 6 months, and annually thereafter on March 31 or in accord-
ance with an agency plan approved by the Commission which might
provide a different date or anniversary ratings for individual employees.
Another of the recent revisions of the uniform system incorporates
the principle that ratings of "Fair" or "Unsatisfactory" should not be
assigned unless the employee was given a warning 3 to 6 months prior
to the rating, specifically informing him (a) how his performance fails
to meet requirements, (b) how he may improve his performance, (c)
that lie has the opportunity to bring about such improvement, and
(d) that lie will receive a "Fair" or "Unsatisfactory" rating if his
performance does not improve to meet required standards.
Prior to 1941, an employee who was dissatisfied with his efficiency
rating could appeal only to his supervisors who had approved the
rating. If any hearing was held, it was before an official, or a board
of officials, in his own agency. However, the act of November 26,
1940, authorized the establishment of boards of review to consider
efficiency-rating appeals.
This act provided for boards having three members-the chairman
to be designated by the Civil Service Commission, one member to be
designated by the head of the department, and the third member to
be designated by the employees of the department in the manner
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
STUDY OF EFFICIENCY RATING. SYSTEMS IN. FEDERAL SERVICE 27
determined by the Commission. Employees are entitled, as a matter
of right, to a hearing and review of their efficiency ratings. They
have the right to be represented, to submit information, and to hear,
examine, and reply to information presented by other persons at the
hearing.
Boards of review were established and began operating in 1941, At
that time,. only departmental-service employees whose positions were
under the Classification Act could appeal to boards of review. This
right was extended, insofar as practicable, to Classification Act em-
ployees in the field service by the act of August 1, 1941. Regulations
were issued in 1942, whereby field service employees whose positions
were under the Classification Act were permitted to appeal in writing
even though no boards were established in the field service. The
departmental service boards took care of these appeals. The right
of appeal was extended to other employees by the act of July 31,
1946, even though their positions were not subject to the Classifica-
tion Act. This law, however, specifically exempted employees in the
field service of the Post Office Department and all employees of the
0, Tennessee Valley Authority. The right of a hearing and review for
field-service employees whose positions were not under the Classifica-
tion Act was postponed until field boards of review were established.
In 1948, the Commission appointed chairmen of boards in its regional
offices and field boards began to be established. A number of them
are now in operation.
Efficiency ratings are used as a basis for within-grade pay increases..
Title VII of the Classification Act of 1949 provides for successive
salary advancements based on several factors, one of which is efficiency
ratings. Ratings of "Good" or better permit periodic salary advance-
ment by successive steps up to and including the maximum rate for
the grade. Periodic within-grade salary advancements under the
law and regulations are made by departments and agencies without
review by the Commission.
Efficiency ratings are likewise a factor in calculating the retention.
credits which are used in determining the order in which employees are
affected by reduction in force.
Reductions in compensation, demotions, and dismissals are actions
that flow from efficiency ratings of below "Good" and are subject to
approval by the Commission in the cases of all graded and ungraded
1r/ employees in the departmental and field services, except employees of
the Tennessee Valley Authority and the field service of the Post
Office Department. Accordingly, specific procedures have been
issued, governing salary reductions, demotions, and dismissals by
heads of departments based on efficiency ratings. These procedures
do not apply to employees serving probational periods.
Under these procedures, the employee is given a written notice, at
least 30 calendar days in advance of the proposed effective date of
the proposed action, stating (1) specifically what the performance
requirements of his position are and how he failed to meet these
performance requirements; (2) the nature and date of the proposed
action, and, in any case of reduction in pay, the grade and title of
the position and the new salary rate; and (3) that he may make a
written reply to the agency within a specified period which shall be not
less than one calendar week from the date of receipt of the notice, stat-
ing why the action should not be taken. The agency is required to
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
28 STTJDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
consider the employee's answer and make such changes and adjust-
ments in the efficiency rating and in the action resulting therefrom
as are deemed appropriate. If these procedures are followed, the
department's action is approved. In the case of a veteran, the
approval is subject to any appeal by the employee under section 14 of
the Veterans' Preference Act of 1944. If the employee has appealed
his efficiency rating to a board of review, approval is subject to the
board's decision on the :merits of the rating.
Approved variations within the uniform efficiency rating system authorized
by the United States Civil Service Commission
The following departments and agencies have been granted author-
ity by the Civil Service Commission to use the uniform efficiency
rating system in rating their employees who are not subject to the
Classification Act and not, therefore, required to be rated under the
uniform system, except under administrative decision of the depart-
ment or agency concerned :
Department of Agriculture.
Department of the Army-Office, Chief of Transportation, for
marine personnel serving on Army vessels.
Department of Commerce.
Bureau of Mines and Bureau of Indian Affairs of the Department
of the Interior.
Central Intelligence Agency.
Federal Deposit Insurance Corporation.
General Accounting Office.
Housing and Home Finance Agency for certain of its constituent
agencies.
International Boundary and Water Commission, United States
and Mexico.
National Advisory Committee for Aeronautics.
Office of Housing Expediter.
Office of Selective Service Records.
The Panama Canal and the Panama Railroad Company on the
Isthmus except craft journeymen and craft supervisory
employees.
Reconstruction Finance Agency.
Securities and Exchange Commission.
General Services Administration for all employees except for
ungraded employees in the Federal Bureau of Supply.
Authority was granted by the Civil Service Commission to the
following departments and agencies, upon their request, to use lists
of tasks or work operations in place of the list of elements on SF 51,
"Report of Efficiency Rating."
Department of Agriculture (now in use in Farmers Home Admin-
istration and Forest Service).
Department of the Army (for Sixth Army and Office of The
Adjutant General, both of whom are rating all employees
(graded and ungraded) on task statements, using uniform
system in other respects).
Department of the Navy-experimental use for scientific and
technical personnel in selected naval research activities under
Office of Naval Research.
Department of Justice-Bureau of Prisons.
1t
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R00050009000 5
STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE 9
Civil Service Commission.
Economic Cooperation Administration.
Federal Security Agency.
Bureau of Old-Age and Survivors Insurance.
General Accounting Office.,
Authority was granted by the Civil Service Commission to the
following departments and agencies to rate on the anniversary of the
date of entrance in position rather than on March 31 of each year:
Department of Agriculture.
Department of the Air Force.
Department of the Army, except Office, Chief of Ordnance.
Department of Commerce-Bureau of the Census.
Department of Labor.
State Department.
Treasury Department, except Bureau of Accounts and Internal
Revenue.
Civil Service Commission.
Economic Cooperation Administration.
Federal Power Commission.
Federal Security Agency.
Federal Works Agency-Bureau of Community Facilities.
Housing and Home Finance Agency.
Commission on Organization of Executive Branch of the Govern-
ment.
New York and Chicago regions of the Railroad Retirement Board.
Veterans' Administration.
ecific date other than March 31 was
a s
t
p
e on
Authority to ra
granted by the Civil Service Commission to the Bureau of Accounts
and the Bureau of Internal Revenue, Treasury Department, both of
which will rate on September 30 of each year; the Office of Housing
Expediter will rate on June 30 of each year.
Authority was granted by the Civil Service Commission to the
Veterans' Administration to rate field station managers on the basis
of their contributions to the operation of various programs under
their jurisdiction rather than rating on the elements listed on SF 51,
"Report of Efficiency Rating."
The real complexities of the uniform efficiency rating system under
the various laws are not fully revealed by a narrative description of
the system itself. Not only have a number of laws been passed at
different times requiring the use of efficiency ratings in connection
with. a variety of personnel actions, but the Commission has been
required to attempt to secure actual uniformity of ratings throughout
the Federal. service. Under these circumstances the system has
inevitably reached a condition of great complexity.
It is believed that the present elaborate procedure for handling
appeals of efficiency ratings is not warranted by the small volume of
justifiable cases handled. During the year 1949 approximately 1,200
cases were received; of the total number of cases decided by the
boards of review, 58 percent of the ratings were sustained and 41
percent were raised. Each year several hundred cases which are
received are disposed of without decision by the boards. These cases
include cases adjusltednor are canceled explained byrthe agencies , to and then satisfaction
of the appellants.
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
30 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
Many protests have reached the Commission on efficiency ratings..
They are one of the greatest causes of confusion and dissatisfaction
in the Government service. We are of the opinion, therefore, that
the uniform efficiency rating system does not provide an effective
means of improving work performance and the competency of the
Federal service.
CHAPTER IT. RECOMMENDATIONS FOR PERFORMANCE EVALUATION
PLANS
NATURE OF '`HE PROBLEM OF APPRAISING WORK PERFORMANCE
The primary purpose of plans for evaluating the work performance
of Federal employees should be to increase the competence of the
service. All other considerations should be subordinated. to this
primary objective.
Evaluation of work performance. in relation to job requirements is
an integral part of administration and supervision. Those who are
responsible for getting work done must make judgments about how
well work is being done. Those who are employed to perform work
should know how performance compares with the performance
expected of them.
Experience has shown that different supervisors are inclined to
appraise work performance, on various bases. However, the best
basis for appraising work performance is the job that the employee
fills and the requirements of that job.
How to secure correct appraisals of work performance is an im-
portant problem. Attempts to solve this problem have taken several
different turns. The method that has worked out best, and which
has received most acceptance, is the one that recognizes administra-
tive authority in its practical sense. It relies on the first line super-
visor to make the initial and most complete appraisal because he is
in the best position to observe an employee's whole performance on a
considerable period of time basis. It relies on higher supervisors to,
review the immediate supervisor's appraisals because they are re-
sponsible for reviewing, all of their subordinate supervisors' judgments.
The appraisals are approved as an agency decision by delegated
authority of the agency head, recognizing normal processes of admin-
istrative responsibility.
In performance appraisal. there are two main forms. Either
appraisal of quality and character or performance with respect to,
which performance is evaluated, or appraisal of qualities of the
employee himself with respect to which he is evaluated.
Rating elements have been used in many appraisal plans for measur-
ing both the amount and quality of performance and also for apprais-
ing the quality and characteristics of the individual. In the first type
the supervisor makes only an observation of the performance in
comparison with job requirements. The second type may aim at an
analysis of such performance to determine the personal characteristics
or nature of the employee.
Of the two kinds of evaluation, those based on performance are
usually more acceptable to rating officials and to employees. Em-
ployees see a closer relationship between the reported performance
and the actual performance, and feel that the area for arbitrary
judgment has been narrowed.
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE 31
Appraisal of the qualities and characteristics of the employee are not
expressed in work terms but in terms of personal attributes.
A system for the periodic appraisal of work performance should keep
constantly in perspective its eventual value in use. These values may
be broken down as follows: (1) Values to an agency; (2) values to
supervisors; and (3) values to employees.
From the standpoint of the agency, periodic appraisals of work per-
formance should reveal how effectively employees do their work and
fit into their assignments. An analysis of the appraisals often can re-
veal the causes of incompetency. The tendency of periodic appraisals
is to improve supervisory practices, and to check on the effectiveness
of supervisory practices. The appraisals should also provide informa-
tion useful in determining personnel policies of promotion, assignment,
selection for training, and reporting within the agency.
Periodic appraisals of work performance could assist a supervisor in
maintaining a smooth running force if they are used as an inventory
of his personnel. Subordinates can make suggestions which are valu-
able for increasing the effectiveness of a supervisor's organization and
program.
Employees may be able to estimate how well their work meets the
requirements of their positions, and be encouraged to greater accom-
plishment if the appraisal reveals that their work has been outstanding.
They may discover the particular phases of their work in which they
are considered weak and the direction in which improvement is
advisable.
EMPHASIS ON PURPOSE OF PERFORMANCE EVALUATION PLANS RATHER
THAN METHODS OF RATING
Considerable emphasis has been placed on the need of uniformity in
performance ratings throughout the Federal service. Experience has
shown, however, that uniformity as to form, methods, and procedures
does not necessarily bring about desirable results. It is a fallacy to
assume that any arbitrary or mechanical system of appraisal of work
performance is necessarily correct. Morale is often adversely affected
by mechanical rating because no advance understanding of work or
standards of performance ordinarily is established. What is needed
is the simplest method that will meet the objectives of improving and
increasing the effectiveness of the service. The Commission is con-
vinced that the present uniform system of measuring and rating
efficiency and reviewing the same is an unnecessarily expensive and
time-consuming operation. Accordingly, it is recommending that the
present provisions of law requiring such a system be repealed.
Since it is more important to have improved operation than to have
uniformity of rating details, it is desirable to stress the purpose to be
accomplished by periodic appraisals instead of forms, methods, and
procedures. For this reason it is recommended that the statutory
authorization for work performance evaluation plans emphasize the
.purpose of evaluation rather than the method of ratings, and provide
considerable latitude for operating agencies to formulate and apply
plans that will aid in achieving the desired results. Each agency
should then adopt a plan which would be useful in its own administra-
tive program. In formulating its plan the agency should consider
what would be practical for its supervisors and employees, and should
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
be able to make changes in its plan as conditions and experience
warrant.
While there should be considerable latitude for operating agencies
to work out the details of performance evaluation plans, there are
some fundamental principles which should be observed, such as:
1. Such plans should provide for practical methods of developing,
between employees, supervisors, and administrators, a mutual under-
standing of proper standards of work performance and securing actual
performance in relation to such standards.
2. Arbitrary controls of rating judgments are undesirable. Per-
formance requirements and performance results are factual matters
and should be expressed and reviewed on a factual basis where
possible.
3. Performance evaluations should be made on a periodic basis, at
least annually, and should cover past performance and progress.
Summary ratings should not be required.
4. Evaluations may permit recognition of outstanding performance,
as well as satisfactory performance, and performance that is not
satisfactory.. A supervisor who evaluates an employee "Unsatis-
factory" should be required to state in writing the reasons for the
rating, the means he proposes to secure improvement in the perform-
ance of the employee, and his grounds for believing that such improve-
ment is likely. The same procedure should be followed when evaluat-
ing an employee "Outstanding." The supervisor should be required
to make a factual written statement showing in what particular
respects the employee's performance has been really outstanding.
No written report should be required where the employee meets the
standards of performance established for his position.
5. Methods should not be too rigid. Flexibility is desirable in.
order to arrive at appropriate evaluations under unusual circumstances.
It is suggested that no rigid plan of consultations between super-
visors and employees be required, but that the principle of periodid
conferences to promote mutual understanding be encouraged where
practicable.
In order to secure observance of these principles, and to prevent
possible misuse of a particular plan to the detriment of employees,
performance evaluation plans proposed by operating agencies should
be discussed with, modified when necessary, and put into effect upon.
approval of the Civil Service Commission. The Commission should
also exercise general leadership in promoting the efficiency of the
service by encouraging Federal agencies to establish methods of
evaluating work performance that may be used by the agencies as a
means of improving the effectiveness with which individuals do their
work and the effectiveness and economy of the operation of organiza-
tional units.
RELATIONSHIP OF PERFORMANCE RATINGS TO PERSONNEL ACTIONS
Under existing law agencies are required to use efficiency ratings as
the basis for many personnel actions. It is the Commission's observa-
tion that this has not increased efficiency nor improved service.
Although periodic performance appraisals may provide information
useful in determining appropriate personnel policies and later actions,
we are of the opinion that summary performance ratings should not
be used as the sole basis for any personnel actions.
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE: 33
With particular reference to separation for inefficiency, there is no
necessity for a separate procedure to be required for this personnel
action on the basis of an unsatisfactory performance rating. If it is
determined that an employee's performance is not likely to improve in
his present position, and he cannot be satisfactorily placed in another
position, the existing procedure for separation on charges should be
utilized. It has been our experience that reliance on an unsatisfactory
efficiency rating has the effect of slowing down the separation.
Accordingly, it is recommended that all existing statutory provisions
requiring the use of efficiency or performance ratings as the sole basis
for personnel actions be repealed.
If efficiency or performance ratings are discontinued as the basis for,
any personnel actions, there will be no need to maintain machinery
of the boards of review, but, at the request of any affected employee,
one impartial review of any performance evaluation should be pro-
vided in each agency. For this reason, the Commission has not rec-
ommended appeal procedures in connection with the work perform-
ance evaluation plans to be established by agencies for the purpose
of promoting the effectiveness and economy of organization units,
Good and just administration can accomplish large improvement in
this field.
The Commission is recommending no change in the present language
of section 12 of the Veterans' Preference Act of 1.944 with respect to
reductions in force. The whole problem of reduction in force is being
given further study and consideration. However, full effect will con-
tinue to be given to the preference in retention now provided for
veterans.
In addition to requiring the establishment of an efficiency-rating
system, section 4 of the act of August 23, 1912 (37 Stat. 413, 5 U. S. C.
648), contained a proviso with respect to retention of veterans in
reduction in force. The Commission is of the opinion that this pro-
viso was superseded by section 12 of the Veterans' Preference Act,
and this opinion is supported by the legislative history of that act,
Accordingly, the proposed repeal of section 4 of the act of August 23,
1912, applies only to the direction that there shall be established &
system of efficiency ratings.. Section 12. of. the Veterans' Preference
Act would remain in full force and effect should the recommendations
made in this report be approved by Congress.
CHAPTER III. LEGISLATIVE PROPOSALS
A Bill To authorize the establishment of methods for the evaluation of the
performance of work of Federal employees, and for other purposes
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That, for the purpose of
promoting the effectiveness with which individuals do their work and
the effectiveness and economy of operations of organization units,
any agency in the executive branch of the Government is authorized
to establish a plan for evaluating the work performance of its officers
and employees. Such plan shall provide practical methods (including
periodic consultations when practicable) of developing a mutual under-
standing of proper standards of work performance between employees,
supervisors, and administrators, and of securing actual performance
in relation to such standards.
SEc. 2. Plans proposed to be established under section 1 of this.
Act shall be submitted to the Civil Service Commission for discussion,
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
 Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5
34 STUDY OF EFFICIENCY RATING SYSTEMS IN FEDERAL SERVICE
and modification if necessary, and shall become effective only after
approval by the Commission. The Commission shall issue general
regulations for the establishment, inspection, and modification, if
necessary, of work performance evaluation plans.
SEC. 3. Performance evaluations as contemplated by section 2 shall
not be the sole basis for any personnel action.
SEc. 4. Upon request of the employee concerned, each agency shall
provide one impartial review of his performance evaluation.
SEC. 5. Section 701 of the Classification Act of 1949 (Public Law
429, Eighty-first Congress, approved October 28, 1949) is hereby
amended to read as follows:
"SEC. 701. Each officer or employee compensated on a per annum
basis, and occupying a permanent position within the scope of the
compensation schedules fixed by this Act, who has not attained the
maximum scheduled rate of compensation for the grade in which his
position is placed, shall, upon the issuance of a certificate of satisfac-
tory service and conduct. by the appropriate administrative officer, be
advanced in compensation successively to the next higher rate within AN,
the grade at the beginning of the next pay period following the com-
pletion of (1) each fifty-two calendar weeks of service if his position
is in a grade in which the step increases are less than $200, or (2)
each seventy-eight calendar weeks of service if his position is in a
grade in which the step increases are $200 or more, subject to the
following conditions:
"(A) That no equivalent increase in compensation from any cause
was received during such period, except increase made pursuant to
section 702 or 1002;
"(B) That the benefit of successive step increases shall be pre-
served, under regulations issued by the Commission, for officers and
employees whose continuous service is interrupted in the public
interest by service with the armed forces or by service in essential
non-Government civilian employment during a period of war or
national emergency."
SEC. 6. Section 702 (b) (2) of title VII of the Classification Act of
1949 (Public Law 429, Eighty-first Congress, approved October 28,
1949) is hereby amended to read: "(2) No officer or employee shall
receive a longevity step increase unless his service and conduct are
certified as being satisfactory by the department."
SEC. 7. The following Acts or parts of Acts are hereby repealed:
(1) Section 4 of the Act of August 23, 1912 (37 Stat. 413; 5 U. S. C.
648);
(2) The Act of July 3 L, 1946 (60 Stat. 751, 5 U. S. C. 669a);
(3) Title IX of the Classification Act of 1949 (Public Law 429,
Eighty-first Congress).
SEC. S. This Act shall not apply to the field branches of the Post
Office Department, the Tennessee Valley Authority, the Foreign
Service of the State Department, or the Department'of Medicine and
Surgery of the Veterans' Administration.
SEC. 9. This Act shall take effect sixty days after enactment.
SEC. 10. There are hereby authorized to be appropriated such sums
as may be necessary to carry out the provisions of this Act.
SEC. 11. All Acts or parts of Acts in conflict herewith are hereby
repealed to the extent of such conflict.
O
Approved For Release 2001/07/25 : CIA-RDP57-00384R000500090005-5