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Leslie Allan

Business Performance Pty Ltd

Managing Director

Read more about Leslie Allan

Blog: Employee performance ratings – the good, the bad and the ugly

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Numbers say a lot about your organization, such as how much money it earns or loses, the strength of sales, and the size of the work force. I’ve made no secret recently about one area where numbers do no good: Employee performance appraisals.

With very few exceptions, attaching a numerical rating to an individual’s performance is fraught with difficulty for both the employee and the manager. It turns the appraisal process into a numbers game in which everyone focuses on the digit, not the message it’s supposed to deliver.
 
Fights erupt over why a manager picked a "3" instead of a "4" even as neither the employee nor the manager can explain the difference (or why it’s unleashed a flurry of emotions). The situation often degenerates further when numbers are attached to rewards – a pay raise, promotion or bonus. Good employee-manager relationships can be torn apart. Overall office morale declines. And, ultimately, productivity plummets.
 
It’s time to retire the summary rating scales. Some managers might find it easier to pick "3 – Meets Expectations" than have a conversation with an employee, but it’s not worth what it will cost your organization.
 
But while numbers have no place in the evaluation of individual employees, they can be an effective tool in other aspects of the appraisal system. Two examples:
 
1. Using multi-rater surveys
The 360-degree feedback process is a popular tool for evaluating employee and team behaviors. Direct reports, peers and supervisors each provide a score for the employee’s specific behaviors. The numbers from each reviewer are never revealed. And I recommend that the total is never tallied into an "overall" score for the individual being evaluated.
 
Instead, with the help of trained facilitators, a summary number is disclosed for each of the surveyed behaviours. These then become a starting point for discussions on strengths and opportunities for improvement. The fact that these numbers are derived from multiple sources solves the problem with numerical ratings in traditional appraisals: They’re from multiple sources, not a lonely manager subjectively picking numbers on a scale.
 
2. Setting or reviewing targets and goals
The most effective systems reviewing the performance of individuals and teams set measurable and quantitative targets. For example, an objective can require that deadlines be met: "At least nine monthly reports turned in by the end of each month over the next year." Or targets can be set: "Reduce the error rate to less than five percent by the end of the year." Such statements are objective, measurable and relevant to job expectations.
 
These exceptions – multi-rater reviews and target-setting – use numbers to start conversations about performance and remove the subjectivity of an individual manager ticking off numbers to rate individual worth. They are also in line with my belief in objectively measuring the successes and failures of a business.
 
Determining targets that are measurable can be a difficult exercise for managers – as difficult as having a constructive conversation with an employee about performance. Picking a number may seem easier, but not when you consider the damage that’s done to the integrity of the performance management system and company performance as a whole.
 
Leslie Allan is Managing Director of management consultancy, Business Performance Pty Ltd.
 
 
We really welcome any and all contributions from the community, so please feel free to share your views and opinions with us, your colleagues and peers via our blogs section.

 
 
 
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Leslie Allan

Managing Director

Read more from Leslie Allan
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