Performance rating scales are beneficial to every type of business. They allow employers to gauge worker progress and help employees understand company objectives. Rating scales are often utilized because they are generally easy to administer, are low cost, and create quantitative assessments that are useful for employees, managers, HR representatives, and even executives. Here’s an outline of what must go into developing a performance rating policy:
Developing a Scale
There are a variety of scales for management officials to choose from when structuring a system—which can make the process a bit confusing. However, once a manager decides on the appropriate measurement system, performance management will become easier and offer more insight. These are a few of the most common types of rating systems:
- Numeric: In this system, employees are rated on a numeric scale such as 1-5 or 1-10. By using numbers, employers can track performance using a scale that is easy to understand for employees and managers alike.
Be sure to include rating documents that explain why a rating of “1” is termed as poor performance and “5” is above average. If an employer is looking for a more precise assessment, he or she can use a scale of 1-10 and assign each numeric figure as a highly specific rating.
- Alphabetic: This method employs the use of letters as markers of achievement. Managers can develop a rating system in which traditional alphabetic values are assigned to each letter.
For example, an “A” would mark an exemplary performance, while a “C” would indicate satisfactory achievement.
- Verbal Phrases: Rather than employing a coded numeric or alphabetic system, companies can opt to utilize a method in which phrases mark performance. One can use the terms “Unacceptable,” “Basic,” “Effective,” and “Very Effective.”
Because phrasing can be interpreted in several different ways, it behooves managers to define criteria for each designation. For example, it should be made clear that rating a worker as “very effective” would mean that the individual consistently produces high-quality work, has strong ethics, and benefits the company as a whole.
Selecting a plan doesn’t have to be tricky. Consider these three basic rating systems as a starting ground to assess employee performance.
Guidelines for Assessment
Once a method of appraisal has been selected, HR representatives and managers can decide on assessment criteria. Here are a few examples of ranking programs:
- Behavior Appraisal: Managers can assess employee efforts by focusing on their behavior. Being a star employee is about more than just showing up every day and producing results—behavior can affect office morale and client interactions.
It’s important that rating systems take into account employee performance metrics, attendance, and qualitative benchmarks such as attitude. If a supervisor wants to understand his or her company as a whole, he or she can take these rating systems and rank employees from high achieving to those who most need to improve. Being able to see a clear breakdown of employee performance is extremely valuable and can help decision makers guide their company in the right talent management direction.
- Trait Valuation: While the behavior-appraisal method focuses on quantitative data as well as specific employee actions, trait appraisal focuses more heavily on subjective qualities. Some criteria such as willing to make the extra effort can easily be determined and feed into measuring return on employee investment.
Supervisors can create a checklist with categories like helpfulness and dependability and mark off positive qualities for each of their employees. This method is particularly popular in customer-service companies, where human interactions are the key to success.
- Paired Comparisons: This method compares each team member against the rest of his colleagues to develop an understanding of team dynamics and areas in which to improve on in departmental collaboration, for instance. Paired comparisons also provide managers with breakdowns that are supremely resourceful in trying to decide between promotion considerations between two or more candidates.
Whichever rating system HR professionals settle upon, it is essential to effective talent management through assessments that are clearly defined. Such strategies enable companies to diagnose their workforce and gain greater insight into employee engagement, efficiency, and productivity.