The glowing picture of everyone in calendar year 2013, the most recent data available to auditors, is, on one level, good news for federal agencies. But it underscores a more likely reality to many in and outside of government. Rather than so many federal workers being exceptional, the system for rating them isn’t working right.

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“Does anyone truly believe that 75 percent of employees rated on a five-level system are outstanding or exceed fully successful?” asked Jeffrey Neal, former personnel chief for the Department of Homeland Security and now a senior vice president for ICF International.

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“These rating processes, for all of their promises to the contrary, are highly subjective and fall victim to pressure to take the easy way out and give most employees a rating that says they are great.”

At the other end of the spectrum, it is “equally not credible” that just 1 percent of employees are not doing a good job, he said.

GAO itself noted that “modern, credible and effective employee performance management systems has been a long-standing challenge for federal agencies” and suggested that a “cultural shift might be needed among agencies and employees to acknowledge that a rating of ‘fully successful’ is already a high bar and should be valued and rewarded and that ‘outstanding’ is a difficult level to achieve.”

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Federal workers themselves have long complained in annual surveys that their agencies do not deal with poor performers, hurting morale and efficiency. Lawmakers complain that it is nearly impossible to fire these employees, but bills to take away some of their their rights to appeal bad reviews have languished in Congress.

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The Department of Veterans Affairs, still reeling from a scandal over long waits for medical appointments and staff members that covered them up, continues to come under fire from House Republicans for its relatively slow pace of discipline for wrongdoers.

“Apparently the federal bureaucrats grading one another think virtually everyone who works for the government is doing a fantastic job,” Rep. Jeff Miller (R-Fla.), chairman of the House Committee on Veterans’ Affairs, said in a statement.

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“But given the dysfunction we’ve seen throughout the federal government over the last several years, that can’t possibly be true,” Miller said. “While most federal employees are dedicated and competent, everyone knows the government’s personnel system is rigged to protect those who can’t or won’t do their jobs.”

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The report was requested by Senate Homeland Security & Governmental Affairs Committee Chairman Sen. Ron Johnson (R-Wis.) “If government managers simply give essentially every employee a passing grade, then at best they are encouraging mediocrity and at worst they are failing to hold accountable those who fail to serve the public well,” he said in a statement.

Most federal employees are rated using a system of five performance levels, (unacceptable, minimally successful, fully successful, exceeds fully successful and outstanding) with a smaller number rated using pass-fail or other systems. Overall, 61 percent of those GAO looked at were rated as “outstanding” or “exceeds fully successful.”

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Under the five-level appraisal system, 74 percent received ratings in the top two levels, with 38.6 percent of employees as “outstanding,” 35.1 percent with “exceeds fully successful” and 25.5 percent with “fully successful.” Overall, the different appraisal systems gave about 99 percent of employees a rating at or above “fully successful.”

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A report GAO did last year on performance ratings for senior executives found similar inflated scores, concluding that agencies needed to make more rigorous judgments. About 85 percent of senior executives received “outstanding” or “exceeds fully successful” ratings in their performance reviews between fiscal years 2010 and 2013.