In my spare time, I’m teaching a human resources class at a local university and we got into this discussion about graphic rating scales on performance appraisals. If you’re not familiar, these are the 1-5 ratings given employees in various areas: quality of work, quantity of work, etc. Many companies use them because they’re easy to administer.
But I must admit, I struggle with a couple of things about graphic rating scales that I really wish organizations would address.
First is the issue about what the rating 3 (out of 5) represents. Most employees think it indicates average performance. I always say that’s wrong. It represents meeting the standard. And since most companies I know have pretty high standards, then 3 is good and maybe even great. It means you’re meeting the (high) standard.
Last time I checked, there’s nothing wrong with meeting the standard. If all of our employees met the standard, just think how great the company would be?!
The second issue is the 1 and 2 ratings. If 3 means you meet the standard, then 1 and 2 represent not meeting the standard. But I’ve never heard of degrees to which a person does not meet a standard. Either you meet the standard or you don’t. And if you don’t, why wouldn’t the rating be 0?
Dealing with 1’s and 2’s is merely a statistical manipulation of the numbers. Probably so managers can still give employees pay increases without dealing directly with the issues. My feeling is you’re not doing your employees any favors by playing this numbers game. If someone doesn’t meet the standard, it should be a 0 rating.
Graphic rating scales (or any kind of performance appraisal rating for that matter) only work if they’re clearly defined and managers understand them. If managers aren’t properly trained on how to set expectations and explain the performance management process, they’ll do things like call employees “average”. Or they’ll tell employees they aren’t performing to the company standard, give them a 2 rating and make sure they get a merit increase.
One of the best ways to keep employees engaged and get high performance is via a well-defined and properly executed performance appraisal and feedback process. I’m not talking big, elaborate or complex. Just make sure everyone understands how it works and use it properly.
TheHRD says
Really interesting post. This is a topic that I have seen wrestled with in so many organisations and never really nailed. Instead we mess around with the rating definitions in the hope that we will encourage use of the 1 and 5 boxes. On the other hand, with a three point scale, are we saying that all over performers and under performers are the same?
And the argument goes on in cyclical fashion……
John Jorgensen says
Good post. I think that the area of performance evaluation and measurement is an area where many organizations struggle and fail to excel at. You have made excellent points that I will steal. Fair warning.
hr bartender says
@TheHRD – Thanks for sharing. It’s an interesting point. I wonder if we will ever find a fair and effective way to communicate performance…
@John – Steal away! There’s no reason to ever recreate the wheel. Thanks for commenting.
Wally Bock says
I think you’ve described accurately a core reason why most current performance appraisal systems don’t work. We don’t differentiate between “expectations” and clear performance measures. That means that a new employee can receive an “exceeds expectations” rating even if he or she can’t perform the core tasks of the job without close supervision and more training.
Nathaniel says
Good post! If the goal of a performance appraisal is to help employees develop and improve, how does a rating system help achieve this goal. I’m a 3…great. Now what? How do I become a 5? Is it even possible? Is it worth the extra effort on my part to become a 5? The rating system seems like an easy way for companies to categorize and rank people for deciding who should get a raise. I maybe way off. Love to get your thoughts. I wrote a summary on a BusinessWeek debate on the value of performance reviews. http://bit.ly/cPyvRH You might find it interesting. Enjoyed your post!
hr bartender says
@Wally – I agree performance management systems in general need some revamping. It all starts with setting clear expectations – whether that’s during the interview, orientation or just on a daily basis. Thanks for commenting.
@Nathaniel – Thanks for sharing. You’re absolutely correct that reviews should cover not only past performance but future development.