In two separate studies, Willis Towers Watson found that 45% of employers found that their own performance management systems were ineffective and Deloitte reported that 58% of HR executives felt that performance reviews were a waste of supervisors’ time. These shocking statistics, coming from those who understand the importance of effective feedback, are reflective of the ineffectual nature of rating scales alone. Such scales only provide a snapshot of an employee’s performance, in certain areas. In an attempt to quantify knowledge, skills and behaviors that are rarely quantifiable, many performance management systems turn to rating scales to establish measurable metrics. While rating scales can provide managers a baseline for additional feedback, the way the scale is written, calibrated and used will ultimately determine its success.
The Effectiveness of Rating Scales Depends Largely on the Rater
In spite of the perfection of the system, the effectiveness of a rating scale depends largely on the rater. In the absence of clear wording and specific rubrics for each level on the rating scale, raters are free to interpret the appraisal process according to their knowledge, background and experience. In the basic “three bucket” performance review system, each objective is attached to one of three categories of performance, “Needs Improvement,” “Meets Expectations,” and “Exceeds Expectations.” The validity of such a rating system is inherently flawed. Rarely does everyone exceed the expectation of their rater 100 percent of the time. However, in the absence of proper training and calibration in the system, including a clear rubric for each rating and a thorough explanation of what each rating means, raters begin to interpret the system individually.
What You Call the Scale Has an Impact on How Well it is Received
Even as some organizations choose to opt out of the traditional titles attached to a basic rating scale, social scientists have found that employees would rather be called, “average” than given a numerical rating of “3”. Likewise, being told you are “average” in itself carries a negative connotation. Corporate cultures that tend to value innovation also tend to view an employee who receives a rating of “average” as a poor performer. Bottom line, getting or giving grades is an intimidating process, especially when the expectation for what constitutes those grades is murky at best. In people’s minds, they go back to elementary school, fearful of bringing home a “C” grade. Rating system titles should be focused on development and improvement, not punishment and failure.
Rating Inflation is Real
Individual interpretation of a rating system generally leads to overall rating inflation. No one wants to be told that their performance for the last year has been “below expectations” or even “average”. As a result, employee satisfaction and engagement tends to take a sharp downturn if performance is placed anywhere other than the top of the scale. Eventually, the rating system itself is useless because it does not provide an accurate picture of the employee’s performance.
In an ideal world, rating systems would be a reflection of an employee’s process, devoid of rater bias and employee psychological reaction. As it is, these attempts to quantify behavior must be created with great care an attention to how they are written and how they are used. Trakstar offers employee performance management software that has taken the guess work out of rating systems. Not only does our technologically advanced platforms meet your organizational needs, they also use verbiage that ensures you receive valid, measurable results. For more information or to speak with a Trakstar Account Manager, contact us at Trakstar.com.