When it comes to performance review, there are several aspects you need to focus on, including when to conduct, how to conduct, etc. One important aspect that deserves due recognition is the use of performance rating scales. There are schools of thoughts on both sides of the discussion on using vs not using it. However, if used strategically, a performance rating scale can effectively make the employee performance review process smoother. Through this article we will cover: Show
Performance rating scale: Top use casesWhile preparing your organization for a performance review, you might find yourself conflicted about whether or not you should use a rating scale. A performance rating scale is highly effective in gauging an employee’s performance from a quantitative perspective, but has limited scope when it comes to evaluating performance qualitatively. Therefore, we have identified the top situations and advantages of using a performance rating scale as well as when you should not be using them. When to use a performance rating scaleYou should use a performance rating scale when you need to:
Advantages of a performance rating scaleBased on the use case above, here are a few advantages of using a performance rating scale:
When not to use a performance rating scaleDespite the diverse use cases above, a performance rating scale doesn’t have universal applicability. In fact, using a rating scale in situations it doesn’t fit may lead to a poor performance review for employees. Therefore, you should refrain from using a performance rating scale when:
Disadvantages of a performance rating scaleHere are a few disadvantages of using a performance rating scale:
Types of performance rating scalesDepending on the nature of responses to the scope and intent, there are several types of performance rating scales that you can choose from. Focusing solely on performance, in this section, we will discuss the top 4 types for rating scales that you can use for different situations. 1. The Point ScaleThe point scale is one of the most commonly used employee rating scales used by organizations. It involves rating employee performance on a pre-decided scale across a spectrum of responses. It can range from a 3-point scale to a 10-point scale depending on the scope and the need. For a long time, the 5-point scale was the one that most organizations relied upon. While the 3-point scale gave only a macro level view, the 10-point performance rating scale became too comprehensive. Thus, the 5-point scale maintained a balance of being detailed but not overwhelming, where identifying differences between the points was difficult. The points on your point scale can be numbers or numerals with each number having a corresponding meaning. Alternatively, it could be words like Average, Above Average, Exceptional, etc. to indicate performance levels. In the most recent times, there has been a rise of the 4-point scale which focuses on eliminating the neutral or the middle option which is often seen as an easy way out that requires no further explanation. 4-point scale example2. The Likert ScaleAnother common performance rating scale that many organizations use is the Likert scale. Like the point scale, it generally has 5 parameters on the scale. However, the difference lies in the value of the parameters. They are always written and the same for all questions. The five options on the Likert scale include Strongly Disagree-Disagree-Neither Agree Nor Disagree-Agree-Strongly Agree While the normal range is five options, it can range from 3 to 7 depending on the context and performance parameters. The Likert scale can be used as a matrix with statements on one side and the scale options on the other and can run like a list for performance review. An effective Likert rating scale generally has an equal number of positive and negative outcomes with a neutral option in between. Likert scale example3. A scale to improve above average spreadThis is a reinvention of the point scale which changes the balance of the positive versus the negative options. Generally, a point scale has an equal number of options that indicate that performance needs improvement and for a job well done. However, many organizations claim that a limited number of options on the positive side make it difficult for them to distinguish between good performers and top performers. In most cases, if there are 5 options, with one neutral in the center, there are only two options indicating good performance. Generally, these two options are unable to capture the performance rating for those 1-2% employees who set new expectations and a bar for performance. Invariably, their exceptional performance fails to get noticed and rewarded and is equated with the good performance of other employees. To bridge this gap, many organizations are using a performance rating scale which increases the above average performance spread. The scale for below average performance is limited to one, which can be substantiated with qualitative feedback. On the other hand, the scale focuses on more above average performance options. Example4. The Frequency Scale for interpersonal skillsFinally, when it comes to a performance rating scale for interpersonal skills, the frequency scale is most sought after. Like most scales, it consists of a statement, followed by a few options. However, the nature and scope of the statement and options is what makes a difference. On the statement front, instead of directly asking whether an employee manifests a particular skill or quality, it focuses on a behavior that comes as a result of personalizing that skill. For instance, instead of inquiring if the person has good communication skills, the focus should be on behavioral aspects like display of active listening, ability to articulate thoughts, confidence of presenting in front of a group, etc. The options, on the other hand, seek to understand how frequently that behavior has been observed. The idea is to gauge whether the employee has been consistently displaying the desired behaviors or is there a particular pattern to it or if it has just been observed as an off chance. Frequency scale exampleThe employee starts and ends meetings on time and runs them with a concrete agenda
This question can help gauge the time management, organization and planning skills for an employee, without directly asking the question. When to use numbers vs words performance rating scale?As you have seen above, your performance rating scale can have options in the form of words or numbers. However, choosing which way to go can have an impact on the overall efficacy of the performance review process. It is best to use a rating scale with words over numbers because it is:
However, you can still use the number rating scales to review performance in situations where you need an absolute rating or when there is a clear and uniform understanding of what each number represents. How to choose the best performance rating scale?Working with multiple growing organizations over the years, we have been able to identify a few tips and tricks that can help you select the right employee rating scale for your next performance review. 1. Go for a 4 or a 5-point scaleAs a growing organization, choosing a 4 or 5-point performance rating scale makes sense because, it:
2. Choose description over numberTo augment the efficacy of your performance review rating scale, choose one which provides options in words or a description over numbers to:
3. Be aware of the biasesAlmost all performance rating scales are vulnerable to biases both in their scope and nature as well as for the rater themselves. Thus, when you pick a rating scale, you need to be aware about the potential biases and have remedial actions in place to ensure that they don’t give you an unauthentic picture of the overall performance. We will talk about some of the common pitfalls and biases in the next section for greater clarity. 4. Create clear differencesWhen you choose a performance rating scale, you need to ensure that the difference in options is very clear and not ambiguous for the raters to figure out on their own. There are several aspects to it:
5. Use the right wordsNext, it is very important to use the right words in the statements and options that you choose. When it comes to the options, make sure there is a clear index of what each option means, especially if it is numeric. This index must be shared with all the stakeholder, the raters, those analyzing the results as well as the employees. Similarly, the questions should be very specific on one performance aspect. For instance, if you combine performance on communication and punctuality, it might lead to a lot of confusion. An employee might have great communication skills, but may not be punctual and thus, addressing them in the same question will be difficult. Furthermore, even aspects within the same performance parameter like active listening and ability to present in a large group can be separate. Common biases in a performance rating scaleNow, let’s look at some of the common biases a performance rating scale might be vulnerable to that you need to be aware of and try to avoid to the maximum extent possible: 1. Definition biasAs discussed above as well, the definition for options can be significantly different even when they are descriptive. This is so because all of us have different notions for each term. For instance, a manager might award an exceptional rating to some of his/her employees because they have been performing consistently well and that’s how they define exceptional. On the other hand, the bar for perfectionism might be too high for another, leading to a lower incidence of being awarded exceptional. Similarly, in instances where the options talk about meets or exceeds expectations, bias on what the expectations are can set in. How to prevent this: The easiest way to prevent the definition bias is to have very clear definitions for all options which are communicated time and again to all. 2. Leniency biasThe leniency bias occurs when the rater tends to give a more lenient or positive rating to an employee than what the performance actually begets. This can be seen when the rating is more on the positive side. Mostly the reason is that managers don’t want to demotivate their employees with a lower rating and, thus, end up giving a higher rating, which may not be a true reflection of the performance. How to prevent this:Leverage a performance rating scale which increases the above average spread and talks about different aspects like top performers, outstanding, etc. This will ensure that decent performance is ranged at above average while exceptional ones have a separate rating. 3. Numeric biasNumbers can have different meanings for different raters in a rating scale. While each number can have a different meaning, the entire spectrum can be also looked at from two lenses. For instance, on a scale of 1-10, both 1 and 10 can be perceived as the top or the bottom. How to prevent this:Similar to the definition bias, the numeric bias for a performance rating scale can be prevented by using a clear index which clearly illustrates how the spectrum works and a definition against each number. 4. Centrality biasThis is a very common bias when it comes to using a performance rating scale. Here, the rater tends to select the neutral or the central option to avoid any conflict or external explanation. More often than not, poor performance needs to be substantiated with improvement actions while high performance needs to be supplemented with evidence and rewards. To avoid any such actions, some raters take the easy way out, which doesn’t help differentiating between high and low performers. How to prevent this: The easiest way to prevent the centrality bias is to remove the center or the neutral option. As shared above, you can simply go for a 4-point scale which doesn’t have a neutral option and thus, the rater has to distinguish between high and low performers. If you are dealing with consistent poor performance issues within your team, this article on Performance Improvement Plan might help. Performance rating scale questionsInvariably, you will have a statement or a question which will become the basis of the ratings for your managers. This final section will focus on the different nuances around performance rating scale questions that you must be aware of. How to choose right rating scale questionsLet’s start with a basic understanding of how to choose the questions for your performance review rating scale which can help you yield the best responses. To make the right choice, you must ensure that your questions are:
Read: 150+ performance review phrases to find a diverse set of questions and statements for your rating scale across 17 employee qualities Common questions for different types of performance rating scalesBefore we conclude, here are some examples of common questions you can use for different types of performance rating scales. These questions can help you understand which scale is most appropriate for you depending on the situation. Point scale
Likert scale
Frequency scale
Wrapping UpWhile there are different views on whether or not a performance rating scale is the best tool to measure employee performance, there is no doubt about the merits it brings along. Therefore, it is critical for organizations to leverage this potential. Here’s a quick revision of everything you need to know about performance rating scales:
Now that you have a comprehensive understanding about performance rating scales, you should get started with applying the same to gauge performance levels in your organization. Follow the best practices and be aware of the pitfalls to make a dent in organizational success. Suggested Reading150+ performance review phrases to use in your next employee review 100+ most useful self appraisal comments How to address poor employee performance at work |