The Traditional Rating Scale: NEEDS IMPROVEMENT

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By: John Smith

Since its inception, CRG emPerform has been providing users with a flexible and functionally robust tool that lets HR practitioners customize the content, which includes their own forms and rating scales. This bodes well for many businesses and is one of the reasons behind emPerform’s growing success; however, we believe that some commonly used rating scales aren’t hitting the mark on accurately assessing employee performance.

Over the last few years, HR practitioners are taking employee performance management to the next level by moving past simply automating appraisals to striving to implement all-out strategic Talent Management processes. With this shift, the need for effective and correct rating scales has never been more important. Appraisal inaccuracies can snowball into larger problems when decision makers rely on the results for making other organizational and employee plans.

The traditional ‘Exceeds, Meets, Needs Improvement’ rating scale (and all its variations) places the reviewer in the position of ‘judge’.  Our experience tells us that people are biased when handing out ratings and they tend to be more “nice” than “accurate”. This is reflected in the fact that when firms use these traditional rating scales, 90% (sometimes greater) end up in the Meets, Exceeds or Significantly Exceeds position.

At the end of the day why does this matter? These biased and inaccurate ratings can create a myriad of problems from general misunderstandings to outright angst in the mind of the employees. It also paints a grossly inaccurate picture of the health of an organization’s talent pool. “O great! Everyone this year Met or Exceeded Expectations!”. When in fact, managers created a basket of apples and oranges and handed it over to HR for comparison.

Fairness and standardization across the board simply cannot be achieved when different managers playing “judge” create an unequal playing field with no basis for comparison.  This issue is compounded in today’s rapidly evolving Integrated Talent Management World because most talent management systems now use these ratings as the basis for crucial decision making processes such as; compensation management, succession planning, development plans,  and most importantly – employee performance reporting. If the foundation of the results are rating scales and the ratings aren’t well thought-out, standard, or fair, then then the results also won’t be accurate, well-thought out, or fair. It is like a jury deriving a verdict of ‘innocent’ based on incomplete evidence.

How can these problems be avoided? Below are some examples of best-practice rating scales that will create a solid foundation from which you can be confident basing other decisions upon.

Competency-Based Rating Scale

Seven years ago, I read an article by Dick Grote that talked about using behavior frequency scales to assess competencies.  The overall message derived from the article was that competencies are integral to the performance appraisal because they represent the behaviors, skills, and attributes one should possess in order to be successful in their position.  Instead of using the traditional 5 point judgment scale, we suggest trying to measure “how often”  we see the competency behaviors. We recommend using something along the lines of the following rating scale:

Consistently Observed This competency is observed on a constant basis; everyone in contact with this person would observe excellence in this area
Observed This competency is observed, please continue to focus on it so that it is observed constantly without exception
Observed Sometimes The competency is observed on an infrequent basis, there is a clear development opportunity here
Seldom Observed Needs Immediate Improvement

What matters most here is that this scale lends itself to BOTH employee and manager understanding.

Objective-Based Rating Scale

The same can be said for Objectives.  Instead of beating around the bush, let’s make it black and white.

Goal Achieved: All milestones and success measures have been achieved
Active Goal: The goal is still in progress, some milestones may have been achieved
Goal Not Met: Timeframe for Goal has been met; however, some or all milestones and success measures have not been met 
Goal Deferred: For timing or business reasons, this goal has been deferred

Although Integrated Talent Management is quickly becoming a necessary part of any solid business strategy, it is important to pay special attention to something as seemingly small as appraisal form ratings scales. After all, they are the smaller gears keep the whole system running properly. From a best practice perspective, there is really no room for rating scales that don’t offer accurate results – not when so much depends on them.

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