By Claudine Kapel
On a scale of one to five, how effective is your performance rating scale?
Is it exceeding your expectations? Or does it need a performance improvement plan?
Many performance review frameworks include a step that involves assigning employees a performance rating. The rating is typically used to support decisions around salary increases and can also flag performance issues that need to be addressed.
But the process of assigning a rating can get mired in confusion, debate, and disappointment if the rating scale has not been thoughtfully designed.
Here are three key tips to ensure your rating scale is a strong performer.
1) Keep it simple. Common scales have four or five points, sometime seven points. The more complex the scale, the harder it will be for managers to identify the most appropriate rating.
Complexity generally leads to ambiguity, which makes the performance discussion more challenging.
2) Ensure every point on the rating scale is well defined and that each level is clearly differentiated. Without such clarity it becomes more challenging for managers to explain the rating selected to employees.
If you have two or three levels on the scale that can be used to rate performance that exceeds expectations, what guidance are you providing so managers can pick most appropriate level? What distinguishes performance that is rated a 4 from performance that is rated a 5?
There should be a clear and reasonably obvious connection between what the employee achieved during the year and the performance rating. A manager should be able to tell an employee why a rating was selected and have that decision make sense to the employee.
3) Use language to anchor the scale to levels of achievement, not personal attributes. The performance appraisal should be focused on assessing how the employee contributed over the course of the year, particularly relative to the objectives for the year.
That’s why common performance rating scales use language such as “meets” or “exceeds” expectations. If instead you use language related to aptitude or ability to characterize employee performance, you’ll probably create unintended issues.
For example, if you define the highest performance rating as “highly capable,” then employees receiving lower ratings may perceive their rating as a slight. This could lead to discord with individuals who are performing well and meeting expectations.
Equally challenging is what could happen after an employee is rated as “highly capable.” Does that mean a manager must maintain that rating level forever more? If not, how does a manager explain that one year an employee was “highly capable” and the next year not? The employee’s capabilities didn’t really change year-over-year – it was how the employee delivered against objectives that changed.
An optimal performance review focuses on quality dialogue between a manager and an employee. The aim is to acknowledge where the employee has performed well and to address opportunities for improvement and development needs.
Attention to the tools used to support that dialogue can help ensure the medium doesn’t undermine the message.
Claudine Kapel is principal of Kapel and Associates Inc., a Toronto-based human resources and communications consulting firm specializing in the design and implementation of compensation and total rewards programs. For more information, visit www.kapelandassociates.com.