Rating Employee Performance: Watch Out For Inflation

performance-reviewThe second article in a series about annual performance reviews.

Most organizations create a process and framework for rating employee performance. Some draw on a competency structure. Others evaluate duties and responsibilities from job descriptions. Many organizations do both. In most cases supervisors are asked to rate performance in these areas on an established scale. Whether it’s a numeric scale (say, 1 to 5) or a descriptive ratings set (Poor Performer, Marginal Performer, etc.) many employees and their leaders aren’t taught how to rate performance correctly. The result is often miscommunication, inflated ratings, and an inaccurate cataloging of performance.

For some the problem is the use of ratings as a reward system. I’ve known many leaders who assign the highest available ratings on a scale to their “best” employees. It’s their way of acknowledging the employee’s value to the team. In many organizations higher ratings are necessary to maximize merit increases.  Using ratings in this way, however, doesn’t accurately reflect the performance of the employee. In some instances it can even lead to complacency or entitlement. And if (when) that employee works with a new supervisor that uses ratings correctly, they will experience a perceived drop in the recognition of their performance.

If a leader is going to assign a high performance rating to an employee in an area of their job it’s imperative to support that rating with specific examples of the employee exceeding expectations. How are they going above and beyond? In what ways are they doing more than what is expected?  What are they doing, occasionally or frequently, that is not included or implied in the job description? Use specific examples to justify ratings at the top end of the scale.

This is also true for the employee authoring a self-review. Truly most of the time employees are meeting expectations. They are doing what is expected from the leader and the organization without issue or concern. What happens for some is that they want these efforts to be seen as exemplary…they want the highest score available. It’s common across almost every industry that managers get handed self-reviews with 5’s or Role Model Performer selected from top to bottom.  Really we can’t blame the employee for this. It’s likely they haven’t been taught how to properly use the ratings scale either. That selection of the highest marks available? It’s human nature. Why?  Because we all, at some point in our lives, went to school.

Our experiences as students conditioned us to expect the highest grade when meeting expectations. Think about it. As a student you are graded for performance.  And when you do everything that is expected in school- turn in all the homework, show up to all the classes, answer all the questions correctly on quizzes and tests, you get an A…the highest grade available on the scale. By the time employees enter the workforce most every experience they’ve had with rating performance has been done in this way. For some, not getting an “A” on their performance review (for doing what was expected) is jarring.

We have to help employees (and leaders too!) by recalibrating their use of the performance rating scale. In most organizations “meeting expectations” lives at the center of a ratings scale, which means that most employee performance lives there. But employees perceive the center as “average” or, in our school example above, as a C grade.  It’s not. The center of the scale, the “meeting expectations” rating, is essentially the A grade. If an employee is meeting expectations it means their performance is solid and there are no issues or concerns.  If they actively and attentively complete the expected duties of their role they are meeting expectations.

So when do you use those higher ratings? When behavioral evidence exists of doing more than is required or expected. If the employee is going above and beyond the standard for the position, then they are probably worthy of a higher rating in that area.  There’s a very simple way to tell: If you think you’ve identified ways the employee exceeds expectations ask the question “Is this something that anyone in this role would be expected to do?”  If the answer is yes, then they are likely meeting expectations, not exceeding them.

Ratings below the mid-point should be used when there are gaps in employee performance. Put another way, if the employee is not meeting expectations they should not be given a rating that suggests they are. Using a “meeting expectations” rating then authoring comments that highlight areas for improvement (things that need to change) is contradictory. In this instance rating the performance as a 2 or a Marginal Performer is appropriate. It’s not a penalty nor is it a character judgment. It’s the area where incremental change is needed in order to get to the standard for the leader or organization.

Prior to beginning the review process or charging your team with the task of doing a self-review, explain the ratings scale to your team. Calibrate for them how to use the scale properly. Give them a clear preview of how you will use the scale. If you are replacing a leader that inflated ratings gently explain that you are using the scale in this way to comply with the expectations of the organization (blame HR…we don’t mind). Proactively reviewing the scale can reset their expectations, cut down on differences in perception, and head off feelings of frustration or disappointment that may come when the employee doesn’t get “straight A’s.”

What do you think? Comment below! Also, if you are so inclined, please share, re-tweet, and “Like” this article as appropriate. Thanks! ~Joe

Other articles in this series:

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3 thoughts on “Rating Employee Performance: Watch Out For Inflation

  1. Pingback: 5 Key Strategies for Writing Your Self-Review | Inch by Inch: A Blog for Leaders

  2. Pingback: How to Write Performance Reviews That Get Results | Inch by Inch: A Blog for Leaders

  3. Pingback: How to Hold Successful Review Meetings | Inch by Inch: A Blog for Leaders

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