Each agency performance management system must incorporate the following system standards:

Use critical elements based on OPM-validated executive competencies to evaluate executive leadership and results, including the quality of the executive's performance;

Align performance requirements with agency mission and strategic planning initiatives;

Define performance standards for each of the summary rating performance levels, which also may be used for the individual elements or performance requirements being appraised;

Appraise each senior executive's performance at least annually against performance requirements based on established performance standards and other measures;

Derive an annual summary rating through a mathematical method that ensures executives' performance aligns with level descriptors contained in performance standards that clearly differentiate levels above fully successful, while prohibiting a forced distribution of rating levels for senior executives;

Establish five summary performance levels as follows:

An outstanding level;

An exceeds fully successful level;

A fully successful level;

A minimally satisfactory level; and

An unsatisfactory level;

Include equivalency statements in the system description for agency-specific terms for the five summary performance levels aligning them with the five performance levels required in § 430.305(a)(6); and

Use performance appraisals as a basis to adjust pay, reward, retain, and develop senior executives or make other personnel decisions, including removals as specified in § 430.312.

An agency may develop its own performance management system for senior executives in accordance with the requirements of this section.

OPM may establish, and refine as needed, a basic performance management system incorporating all requirements of this section, which agencies may adopt, with limited adaptation, for performance management of its senior executives.