The danger of performance ratings pt2

Julie Lock concludes her piece about the flaws in traditional performance ratings. 

If all research points to this method having a negative effect on employee engagement, why do we continue to use it?

What are the alternatives?

Changing this system, or removing it completely, flies in the face of traditional HR practice. Performance ratings provide instant data, and we’ve become accustomed to measuring, recording and comparing everything – the way we work often depends on it. But that doesn’t mean that change is a bad thing.

If you insist on keeping performance ratings, here are a couple of ways they can be improved:

Use ratings alongside check-ins

Ratings as part of an annual appraisal simply don’t work. Why wait up to a year to find out that some of your staff are performing at unacceptable levels while others are clearly underused. These are issues that require immediate attention. Instead, ratings should be used alongside performance check-ins, providing you with a real-time overview of how your workforce is performing.

Scrap ratings for over-performance

The current 1-5 rating system labels employees that are meeting all expectations – that is the vast majority of people – as average. Would you be happy to admit that most of your employees are merely average? This clearly needs rethinking.

Proper training should be provided to all managers to ensure they are aware of the potential for subjectivity and bias.

If you have to rate people on a numeric scale, why not scrap ratings ‘4’ and ‘5’ and make ‘3’ the top mark? After all, what more can you expect of an employee than them meeting all your expectations? Instead of being labelled as average, most people would be told they are doing a good job. This makes sense, because most people are doing a good job.

Obviously it’s important to reward people when they go over and above their everyday duties, but this should only happen in reaction to an unplanned external event – otherwise it would be part of their job description.

These moments should be recognised as and when they happen, with employees awarded something like a ‘star’ rather than a higher rating. If employees are consistently carrying out extra duties, perhaps it’s time their job title was reconsidered.

Train managers to rate people properly

For any rating system to work, it’s key that managers are objective in their approach. Proper training should be provided to all managers to ensure they are aware of the potential for subjectivity and bias. Simply giving managers a document with a description of each rating is not sufficient.

Managers should also use performance ratings to turn poor performance around rather than punish employees.

Stop skewing the data

We’re asking managers to rate employees, then ignoring the ratings if they don’t fit a prescribed distribution pattern – this is crazy. Streamline the ratings process by doing away with bell curves, forced distribution and quotas – they skew the results and complicate the process. After all, if your managers have been trained properly, you’ll be able to trust their ratings.

For those brave enough to scrap ratings altogether, here are a couple of alternatives:

Judge emotions rather than giving grades

Your employees are intelligent adults, not naughty school children. Why are we grading them at all?

Instead of handing out marks, why not take the time to ask how your employees feel? Are they satisfied, stressed, bored or anxious? Do they feel underappreciated, or perhaps a little out of their depth? How do they feel about their workload – too much or not enough?


These are important questions to ask, and they will never be answered by dishing out ratings. Stop trying to make it an academic exercise and try to understand how people are feeling.

Go with the flow

Understanding how your employees are feeling and what makes them tick will help you keep them in the flow. This is a mental state in which a person is fully engaged and immersed in the task at hand, giving them a sense of energised focus and enjoyment in the process.

To be in the flow, your employees need to be challenged just the right amount – too much and they’ll feel anxious and stressed, not enough and they’ll feel bored and disengaged.

Performance management should focus on keeping your employees in the flow – something ratings are never likely to do.

Final thoughts

What is the purpose of performance management? To a certain extent it’s about an organisation keeping tabs on its employees. But surely its real goal is to help employees develop their talents, making them more effective and efficient in their work.

This in turn gives a CEO confidence that they have the right people in the right jobs, with a talent pipeline for succession and a low flight-risk workforce. With this in mind, it’s high time we looked at performance ratings and asked the question: who is this really benefiting?

Condensing a year’s worth of work into a single number simply isn’t an accurate or fair way of assessing performance. In fact, it’s impossible to equate an individual’s value in this way. Worse still, the process is expensive and lengthy, and serves only to disengage people.

It’s time we moved away from managerial practices that grade and demoralise employees, and move towards those that encourage continuous growth, improvement and engagement – this benefits everyone.


About the author

Julie Lock is Service Development Director at MHR


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