Do ratings have a place in performance reviews?
Ask the Expert with Ashleigh Myerscough — Episode 20
Ashleigh Myerscough, Senior Performance Coach at 7Geese answers your questions about human resources and people management during the pandemic.
Q: Should we consider removing ratings from our performance reviews?
AM: As human beings, we crave to know where we stand, so ratings have their place in reviews, but it’s how you rate and what you rate against that makes the difference.
Our first recommendation for ratings within your review is to consider the perceived fairness your employee walks away with. The ratings you choose impact your employee’s experience. Be sure that your team members, your managers, and your individual contributors understand and agree with the ratings systems before the reviews take place.
Biases in performance review ratings scales
Ratings also leave the opportunity for biases. The first you should be aware of what we call the central tendency bias. When we’re using a three or five-point scale, we want to try and make that middle number above-average performance. This way, you avoid having people just picking in the middle. Or you can move to having a four-point scale such as not meeting, meeting, above and exceeding. This means that a “2” on the scale means you’re meeting expectations.
There is also another bias that can happen when we know the “why” of the review. Compensation ratings tend to have higher ratings with less accuracy compared to growth and development ratings, which are going to be more accurate, but lower in results. This is because managers tend to rate higher on compensation ratings. There’s a lot of opportunity for conflict when there are disagreements about those ratings, so naturally, we will try to have higher ratings for compensation reviews.
Improve your ratings schemes and keep them in your reviews
Having behavioral ratings anchor scales, also known as bars, across all of the same dimensions can significantly help with ratings and the opportunity for things to go awry. A bar delivers explicit behaviors tied to each rating scale, so there’s no question about whether a team member is meeting, exceeding, or under-developing in that particular role.
My suggestion would be to keep your ratings systems, but look at how your ratings were developed. What’s the knowledge of that rating scheme across your team members? Is there an understanding and an agreement with the rating, and do we have very explicit behaviors for each of the ratings on that scale?
What about rankings?
Rankings always come up when we talk about ratings. Ratings tell us where we stand against a criteria, versus rankings, which tell us where we stand against one another.
Rankings can often be a de-motivator, which is the opposite intention of a good performance review. We recommend not having rankings within your performance reviews.
Ranking can provide an overview of where your talent stands, so if you’re looking at a distribution, potentially a force distribution, it can provide you a good overview of where your talent lies. We don’t recommend you share these ratings with your team, as it will potentially lead to demotivation, which doesn’t drive future performance. Use ratings, but avoid rankings in your reviews.
To learn more about how we do this at 7Geese, using 7Geese, reach out for a tour.