Performance Management - Status flow - Closed/Reject

All - we are not implementing the WF Approval part of the system, but rather utilizing the status flow to manage the process. We want to allow a manager to 'close/Reject' an appraisal document if the employee transfers to a new department during the objective planning (Planning) phase.

I have checked 'Activate Approval Process' which makes Closed/Rejected status available, but when I try to add it to the status flow I get the error message that "Status Change from Objective Planning to Closed Rejected is not allowed".

How should I set up the template to provide for the scenario where the manager needs to get rid of (without deleting) an appraisal document ?