Creating the Right Employee Evaluation Rating Scale

Posted by Dave • January 21, 2020 (Last modified January 29, 2021) • 5 min read

At the heart of every organization’s employee review process is the rating scale. It’s the medium in which managers and other raters express how well an employee performs at their job, conducts themselves in the workplace, and embodies the organization’s values. It also provides a system for quantifying evaluations and generating data for succession and compensation planning.

Most HR professionals put a lot of thought into the competencies included on employee appraisal forms but too many overlook the rating scales that accompany them. The wrong scale can cause raters to misunderstand their scoring options and allows biases to creep into the evaluation process. The result is inconsistent and inaccurate evaluations which naturally hurts employee engagement and morale. 

But the right rating scale leads to every employee getting the recognition they deserve. They learn where they’re excelling and where they can improve. In this blog post, we’ll cover all things employee evaluation rating scales so you know what to consider when building a scoring system for performance reviews. 

The five-point rating scale has its shortcoming

Let’s start with the five-point rating scale since it has long been the default method for formally evaluating employee performance. It’s simple for raters to complete and allows HR to tally up a final score for each review.

The problem with the five-point scale is it lacks context. For example, each rater can have a different idea of what a “3” means on a competency like communication. It gives them too much latitude in how they interpret scoring options and opens the door for these common rater biases:  

  • The leniency bias – Some raters don’t want to be too critical so they give every employee “4s” and “5s.”
  • The central tendency bias – Other raters veer toward the middle, giving employees mostly “3s” with a couple of higher and lower scores mixed in for good measure.
  • The strictness bias – And then there are the raters who believe a “5” means perfection and gravitate toward the lower end of the scale on each competency. 

When each rater takes a different approach, evaluations land all over the map. Some employees get good marks that overstate their performance while others are told they’re underperforming in every area. And in the case of the central tendency bias, the employee doesn’t receive any actionable feedback at all. 

And if your organization uses multi-rater feedback, an employee’s scores on a single competency can end up not making any sense. When each rater gives a different score, it’s confusing and frustrating for the employee and the HR team member tasked with recommending next steps. 

Use a semi-quantitative scale with rating titles

A quantitative scale is still necessary, raters just need to know what each option means. A five-point scale that includes titles (e.g. “not effective,” “minimally effective,” “effective,” “highly effective,” “exceptional”) provides the context that a pure five-point scale lacks.

Whereas a “4” is easy to check without much thought, a title of “highly effective” means the employee is truly making a difference in that area. It encourages the rate to think before they choose a score. They may conclude the employee is doing a fine job but not necessarily exceeding expectations, so an “effective” score is correct.

A semi-quantitative scale also makes for productive conversations between the manager and employee. When the manager thinks through their ratings, they can later convey that feedback to the direct report when they sit down to go over the review results. They can say, “here is what you can do to get a ‘highly effective’ or ‘exceptional’ grade next time around.” 

Achieve proper spread in your rating scale

With Trakstar, you can customize rating scales to your organization’s liking. You can create specific titles that match your organizational values or the specific competencies employees are evaluated on. 

The key when determining rating scale titles is to achieve proper spread—or distinction from one scoring option to the next. Remember, the goal is to provide context so raters need to have a clear understanding of each option on the scale or they’ll end up making their own assumptions. 

You can achieve spread by providing additional information with each scoring option. For example, the title “not effective” could include a description of “below minimum job requirements” while the title “minimally effective” is described as “barely meets job requirements.” These extra details remove the guesswork and help raters provide accurate scores. 

Using Trakstar, you can customize the descriptions at every level of a rating scale. Our team has also created a library of 100+ fully built competencies and rating scales you can use to quickly create detailed evaluation forms.  

Other best practices for rating scales

We’ve covered that a semi-quantitative rating scale consisting of titles and descriptions will help result in accurate employee appraisals. But what else is required to create the best possible scoring system? Let’s conclude with some quick tips for creating effective rating scales:

  • Assign values to each rating scale option so evaluation scores can be calculated. We recommend using increments of 20 on a five-point scale to ensure even scoring with the highest rating option valued at 100.
  • Include a “not applicable” (NA) option for competencies that don’t apply to every employee. You never want factors that are irrelevant to an employee’s job to influence their final evaluation score.
  • Feel free to use different rating scales that are appropriate for each competency. For example, a straightforward “yes” or “no” option might be called for at times. In the case of goals, a scale of “not started,” “in progress,” and “complete” may make for better measurement. 
  • In addition to providing descriptions for rating scale options, explain what each competency means. This is especially important for behavioral competencies that aren’t quantifiable.  

Rating scales are only part of the equation

The takeaway of this blog post is rating scales matter—a lot. However, many factors go into making a successful employee appraisal process. Trakstar will not only provide you with an industry-leading solution for tracking and measuring employee performance. We also have a team of experts who will help you build a great evaluation process from rating scales onward. 

Ready to learn more? Request a live Trakstar demo today!

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