Summary: A performance rating scale helps assess employee contributions accurately. Learn why it matters, popular systems, what to evaluate, and key considerations for success.
Evaluating your employees is an important part of running a business. You want to make sure that you’re paying close attention to what they’re doing well and what they might need help on and that means conducting regular performance evaluations.
But with so many different ways to do it … how do you know which one is going to be the best for your business and your employees? Let’s take a closer look.
Why Performance Reviews Matter
There are a number of reasons that performance reviews matter. We’re going to take a closer look at some of the most important, such as:
- Performance reviews allow employers to fairly evaluate employees to make decisions about bonuses, raises, and promotions.
- Performance reviews allow employees to understand how their performance is being perceived by the organization and allows the employer to provide positive recognition and support.
- Performance reviews allow employees to see what they need to work on and where they excel.
So, when you conduct a performance review and subsequently give your employees a rating on a performance review scale, it allows them and you to see what’s going well, what’s not going well, and where improvements can be made (on both sides of the organization).
Adding Ratings to Your Reviews
When you add performance review scales to the reviews you’re going to give your employees something to work toward. Simply telling them that they need to improve their communication skills is helpful, but giving them a rating of three out of five (and even better having specific markers for what makes them a three rather than a two or a four) will help them make more focused improvements for next time around.
The more specific you can be about your review and the ratings that you provide the easier it’s going to be for your employees to do what you need them to do in order to get better and the better the overall result will be for your business. But just what kind of rating system should you use?
Rating Systems to Consider
There are a multitude of different rating systems that you can use and exactly which one you want depends on you (and the rest of the evaluation team), the business, and the employees that you will be evaluating.
Three Point Rating Scale
This is a relatively simplified scale that makes it quick and easy to mark your employees for their skills. With a three-point rating you generally have:
- Needs improvement/Not meeting expectations
- Efficient/Acceptable
- Excellent
While this is simple, it doesn’t give a lot of flexibility. For example, you might have several employees that are doing ‘okay’ at a specific skill or task but aren’t really at a level you would consider as excellent. But they may not be doing it the same.
Perhaps one is doing much better than the others but still not ‘excellent’ or one is doing much worse but not quite at ‘needs improvement.’
Because the three-point scale keeps things very simple it keeps you from being able to differentiate your employees and make sure that they understand what they’re really doing well or why one got a raise and the other didn’t.
Five Point Rating Scale
This is one of the more popular rating scales as it gives you a little more freedom and flexibility to your ratings. You don’t just have the three levels to choose from. This rating scale adds in another option in between the middle rating and the highest and lowest.
You would generally have:
- Needs improvement/not meeting expectations
- Somewhat successful
- Efficient/acceptable
- Highly successful
- Excellent
In this way, you have a little more opportunity to separate out employees who are doing a little better or a little worse on certain skills.
Narrative Scales
What if you don’t want to give someone a number rating or a specific ‘category’ rating? Well then, you can choose to use a narrative scale instead.
These scales allow you to write out an assessment or a detailed description of how each of your employees is doing. You can lay out exactly what each one is doing well or not so well and be as specific and detailed as you want to be.
This type of rating system gives you and your employee the most information possible when doing an evaluation.
Pictorial Scales
You could choose to use a graph of some type, such as a bar graph or line graph. Each of the separate lines or bars could represent a different skill or trait that your employee possesses. Then, you would line of the different points to show how well (or not so well) they do with that specific aspect.
These scales can be great because you can show multiple skills side-by-side and you get a visual understanding of what each employee is doing. On the other hand, they don’t provide a lot of information other than the number rating.
BARS
BARS is a behaviorally anchored rating scale, which allows employers to look at specific behaviors of the employee rather than just skills. These behaviors can make it easier to rate individual employees and also make the entire process more objective, which is a great way to provide the most accurate evaluation for each employee.
With this system you won’t necessarily get a score on something like ‘teamwork’ but you would look at the specific behaviors the employee has exhibited that display teamwork.
360-Degree Feedback
360 feedback is about talking to not just the employee but also anyone who might interact with them. In this method, you would talk to their peers, the people who work directly under them, and the people that are above them on the chain of command.
All of these people will help you understand how they perform in different situations, how they do with different tasks, and what they’re like when interacting with different people within the company.
Management by Objectives
If you have specific skills or traits that you want to emphasize within your team you could use this option. This one lists out those specific objectives you want your employees to meet and then evaluates how well they’re meeting those objectives. It could be specifically about sales targets, bringing in new projects, or any other number of objectives that are important for your business.
What You’re Rating
Now, when you’re rating your employees you need to be sure that you’re using the same scale and same method for everyone, or at least for everyone in the same department. This will keep everything fair and make sure that everyone knows what they need to do moving forward.
While we’re at it, let’s take a quick minute to breakdown just what some of those ratings mean.
We’ll look at the five point scale and the different categories for it, but note that this will also be useful for the three-point scale as well. With the three-point scale you would use the first, third, and fifth category from the five-point scale.
Needs improvement/not meeting expectations
Someone who is at this lowest level is not doing what you expect them to be able to do. They might not be meeting their sales goals (or even seem like they’re trying) or might not be interacting well with others. These are people who are not only not doing what you expect, but are extremely low on the scale and need a great deal of improvement.
These people would need some type of action plan for how to get them up to speed or at least get up to a more acceptable level. If they don’t make improvements or don’t seem to be trying to make improvements people with a number of ratings in ‘needs improvement/not meeting expectations/level 1’ might need to be let go.
Somewhat successful
Someone who is trying but still not achieving the levels that you want them to for specific skills would be rated in this category. They are working toward achieving the goals or working toward doing what they can but they aren’t able to perform at the level that you would like them to be.
These people would need a little help or guidance to get them up to the level you want them to be. They might already be on the right track and continuing to improve or they might think they’re at the level they should be in which case they need a little more support. But the fact that they are trying to improve means they would generally get another chance to keep improving.
Efficient/acceptable
Someone who is meeting the goals that are set for them or is within a ‘margin of error’ for the goals that are set would be considered ‘acceptable.’ This is someone who is doing exactly what is expected of them at least most of the time, but they’re not going above and beyond or they may not be meeting goals 100% of the time (though that’s not exactly feasible).
These people could continue to improve and you could set them up with someone to help them do even better or you could provide additional encouragement to push a little harder. These individuals are doing well enough to keep their job but often won’t be sought out for promotions or advancement or may not receive the highest level of raises and bonuses.
Highly successful
Someone in this category is meeting their goals and even exceeding them on some occasions. They are pushing themselves to do well and seem to take pride in doing their work and doing it to the best of their ability. These are individuals who are trying to improve not only themselves but the business and who seem to always be working hard.
These people will likely continue to improve themselves and always look for opportunities to do more. They are deserving of bonuses and raises and will often be looked at for promotions and advancement. They may also be willing to take on additional responsibilities and opportunities to support the organization.
Excellent
These people are the best of the best on your team. They’re the ones who are constantly going above and beyond in all areas of the business and who are actively looking for ways to improve. They may seek out opportunities and ask for additional responsibilities and tasks.
These people will certainly be candidates for raises, bonuses, promotions, and advancement. They’re the ones that you likely turn to whenever you need help within the business or when you have new people coming in that need to be trained. They’re the ones that you use as an example of exactly what you want for your business.
What Do You Need to Know?
When you’re deciding which specific rating system to use and how you’re going to set your standards it’s important to think about just what you need to know.
How detailed of information do you want about the different tasks that your employees are performing or different skills that they have? If the skill is extremely important to the success of your business or to their success as a member of the team you will likely want to get as detailed as possible. If it’s not as important something less detailed may function just fine.
When it comes to three- and five-point scales you could choose to mix them together. For some skills you may only rate on a three-point marker while others you may want the additional nuance of a five-point scale. But when it comes to other forms of rating and review it’s generally important to choose only one and stick with it throughout the review.
Something else to keep in mind is just how receptive your team is to feedback. You want them to look at their performance review as an opportunity for improvement as well as an opportunity to feel good about what they’ve accomplished or what they’ve already improved in.
By conducting regular employee performance reviews you can get the information you and your employees need to improve your business. It also helps you see where you might be falling short on training or communicating what you’re looking for. That means you can help your employees do better by enhancing training or explanations as well.
Make sure that you’re fostering an environment that supports improvement and growth. Letting an employee go at the first sign of a mistake or a low ranking on a performance review makes the rest of your team more anxious and less likely to take risks that could help your business. On the other hand, showing them that you’re willing to help and you want them to succeed makes your employees more likely to help one another and continue looking for ways to grow and improve.
Performance review scales set you and your employees up for success, so make sure you’re doing everything you can to create a positive experience, even when the review isn’t so positive. The more you can do for your employees the more they’re going to do for your business. So take the time to create a comprehensive and high-quality performance evaluation system, and start right away.
Authors:
Susan is an experienced, certified HR and compliance professional who provides HR and compliance strategies to companies with global and US-based teams.