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Performance Appraisals – How to Use Numerical Ratings

Submitted by  on July 27th, 2011

Yellow builders rulerLately I’ve been sounding off about the damaging effects on employee morale of putting a numerical rating on each individual. This typically occurs during the annual performance appraisal cycle. I’ve been saying that we need to throw out summary rating scales altogether.

Managers and employees alike get so hung up on whether an employee is a ‘3’ or a ‘4’ that the basic message gets lost entirely in the pent up emotions released when fighting over a number. And tying the magic number to a reward, whether it is a promotion, salary increase or a bonus, only further blackens the emotional blind spots -not to mention the resulting fractured working relationship from that point forward.

I am often asked whether numbers can be used at all during the appraisal process. I am a firm advocate of using measures to plan and review business performance. So, how can a disdain for putting people in numbered boxes be reconciled with a strong measurement focus? Here is how I think numbers can be used to great effectiveness in a well-performing performance management system:

1. Multi-rater feedback systems

Where appropriate and in places where trained facilitators are available to debrief, use one of the popular 360 degree feedback survey instruments to rate employee and team behaviors. The trick here is to not summarize all of the specific scores into an overall figure and apply to an individual. Centre the discussion on the feedback score for each behavior, discussing key strengths and developmental opportunities. Using a multi-rater instrument also avoids the perceived subjectivity of an individual manager ticking a number on a rating scale.

2. Goal setting and review

For each individual and team, set agreed and measurable targets. For example: “At least 10 out of 12 monthly reports submitted by the end of the month.” “Defect rate less than 2% by end of year.” These are objectively measurable and focus the discussion on outcomes and what is needed to meet targets. The focus is off notions of individual worth.

Yes, setting measurable targets is difficult for many managers and supervisors. I’ve met some that would rather have their tongue pierced with a red hot iron. And yes, many managers find it excruciating having to have an honest but respectful conversation with an employee about their performance. Bestowing a largely subjective assessment of ‘2 – Needs improvement’ may seem easier; the manager doesn’t need to do much work to declare a number. However, the cost in nervous sweat and bottoming morale is high.

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Posted in Performance, Processes | Comments (2)

2 Responses to “Performance Appraisals – How to Use Numerical Ratings”

  1. Mark Burke Says:

    Leslie –
    Nice ideas. I would go further and say that the measurement instrument is more important to get right than the delivery. If you have a criterion-based instrument that is completely objective, these wouldn’t be a need for involving multiple raters or having subjective conversations about arbitrary number-based scoring systems. Managers know their content area. They should take a shot at setting expectations for the employees and then translate those expectations into a checklist of Yes/No on meeting them. Otherwise, it’s all just subjective checking-the-performance-assessment stuff.

    Mark Burke
    Accurate Assessment

  2. Leslie Allan Says:

    Hi Mark, Sure, use criterion-based instruments where possible and where appropriate. However, that doesn’t preclude the use of multi-rater instruments where relevant. For example, getting feedback from customers on a customer service representative’s customer service interactions. Another example is getting feedback from other project team members on dependability, co-operation and listening.

    These kinds of ratings can be as much criterion-referenced as “Produce 12 widgets per hour with no Category A defects”. In my first example, the criterion could be “Achieve a minimum score of 4 on the monthly customer service survey.” Some aspects of most people’s jobs involve interaction and/or collaboration with others. Yes, let’s be as objective as possible, but let’s not forget the human dimension. What do others think? Is there a place for multi-rater instruments?

    Regards, Les Allan

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