The changes, designed to reduce administrative burden and attract new talent, have been criticised by workplace unions concerned by a casualisation of the public service.

Mr Lloyd announced the changes in his latest directions, which also foreshadowed changes to merit based selection, affirmative action for indigenous disabled employees and the sharing of talent lists.

The changes allow departments to extend temporary contracts from 12 months to 18 months without a competitive selection process. In certain cases, the contracts may be extended to three years.

The reforms reinforce Mr Lloyd's desire to bring the bureaucracy closer to private sector recruitment and termination practices. But his office has rejected claims the changes indicate a willingness to hire more temporary workers.

The number of temporary staff employed by APS agencies has increased significantly in recent years. In 2014-15, the temporary ranks swelled by 27.2 per cent as the bureaucracy transitioned from a recruitment freeze.

"Most organisations require a core of permanent staff supplemented by employees engaged for a specific task or term," Mr Lloyd said. "The APS is no exception."

"The amendments provide flexibility for APS agency heads to meet contemporary employment demands quickly, in an efficient way."

But Professional Australia ACT director David Smith said the public service was already over-reliant on contractors.

"The consequences of this move is that employees will have less certainty about their ongoing employment and this will have a direct effect on productivity and the capacity to retain critical expertise," he said.

"There is no genuine reason to extend temporary employment status for this period unless the government is trying to extend their capacity to sack employees reason."

The directions also announced plans to streamline performance management and provide management with greater discretion.

"The previous level of detail on performance management was inconsistent with the red tape reduction agenda," the directions said.

Mr Lloyd has routinely warned underperforming staff of efforts to bring the bureaucracy in line with the private sector.

Many senior staff, according to the commissioner, are unwilling to initiate performance conversations with staff due to fear of confrontation.

"It doesn't need to be like this," he said earlier this year. "In many private sector organisations, a mutually respectful parting-of-the-ways works to everyone's benefit. We should aspire to this for the Australian public service."

Mr Smith said the changes could expose public servants to risk without proper consideration of genuine performance management issues.

"Our major concern in relation to performance management relates to how these changes interact with the removal of protections in many APS agreements," he said.