Employee Performance Evaluation

Common Rating Methods

Employee performance evaluation tips and techniques

 

 

“What is the right rating method for my employee performance evaluations?”

 

Rating Method Overview

The right rating method for your employee evaluations depends on the number of people you have doing the same job, the size of your organisation and the benefit you receive from investing in your evaluation tools. Then you need to consider the resources that you have available to develop your rating methods. 

You will find that rating methods will vary considerably in their complexity ranging from a basic summation of performance written by the employee’s manager, though to the use of complex behavioural descriptors used to compare and contrast individual performance.

Without a doubt the best way to rate employee performance also happens to be the most expensive method to use, see BARS below. However, before you decide to use this method you will need to determine if your business will benefit from its use.

You are more likely to benefit from these more expensive methods if you have a large number of people doing a simular job, with large starting in the hundreds of employees.

In practice you will find that most employee performance evaluations include a combination of two or more of the following rating methods.

• Graphic rating scale
• Global Rating
• Essay Method
• Behavioural anchored rating scales (BARS)
• Management by objectives

Graphic Rating Scale

Graphic rating scales are used in many surveys, they normally consist of a line with four or five rating criteria listed, such as

• Unsatisfactory
• Below expectation
• Satisfactory
• Above average
• Outstanding

An example of this type of rating criteria

Performance Criteria	Unsatis-factory	Below Expect-ations	Satis-factory	Above Average	Out-standing
Productivity			X
Quality				X

Or

Performance Criteria	1	2	3	4	5
Productivity			X
Quality				X

Typically there will be a range of criteria such as productivity, quality, teamwork, customer service, or concern for safety etc. The team leader or manager will rate each employee based on their judgement of the employee’s performance, time their assessment is supported by data.

This method is typically subject to considerable bias, which makes it hard to compare people doing different jobs or even the same job in different teams. There is generally no criterion to determine the difference between each of the graduations on the rating scale.

To remove the bias some businesses assign criteria to some of the elements. For example, a sales person may score a 3 if they meet their sales budget, exceeding by 10% scores a 4 and by 20% of more scores a 5, If they miss target by 10% they score a 3 and by 20% or more they score a 1.

You will find that most efforts to clarify the rating criteria tend to be on those rating criteria that are quantitative.

Many people will also debate having 4 or 5 rating criteria, while there is some merit in the debate when this method is used in employee surveys and market research; there is no validity in the debate when this method is used for employee performance evaluations.

 

 

Global Rating

Some organisations use a single global rating of overall job performance to evaluate an employee. While this method would be expedient for the employer and may assist with decision such as paying bonus and allocating performance based pay increases, it is unlikely to provide the employee with any ideas on how to improve their performance.

For example

Performance Criteria	Unsatis-factory	Below expect-ations	Satis-factory	Above Average	Out-standing
Overall Performance			X

Note: This is not recommended for your employee performance evaluations

 

 

The Essay Method

In the essay method the appraiser writes a statement to describe the employee’s strengths and weaknesses and to make recommendations about the employee’s developmental needs. This method gives the appraiser some freedom to describe the employee’s unique characteristics, promotability and special talents.

This method is reliant on the appraisers writing skills and their ability to express their thoughts through the written word. To ensure consistency and improve the content of this written evaluation a checklist of things to cover can be created and could include items such as

• Job performance
• Quality of work
• Team work

However once this check list is created you could use it to create a graphic rating scale, and provide a comments section for appraiser to add additional comments.

When used in conjunction with other methods, such as the graphic rating scale, the essay method does not require a lengthy statement and can add value to your employee performance evaluations.

 

Behaviourally Anchored Rating Scales (BARS)

The behavioural Anchored Rating Scale method is normally used only for part of your employee perfromance evaluations, that being the assessment of employee behaviour. For other performance criteria such as Judgement or decision making other methods of appraisal are generally used.

As with the graphic rating scale, the behavioural anchored rating scale aims to assign a score to a range of performance criteria. However, the BARS method focuses only on observable behaviour and provides examples of the observable behaviour for each score. This makes it easier to have consistent rating across a large organisation.

For example when assessing a leader on their passion for people you may consider

Score 7, 8 or 9	Conducts one on one with each employee monthly, reschedules missed one on ones as a priority. Actively seeks opportunities to give positive informal feedback to their employees Has several touch points with each employee each day Provides their employees with development opportunities Seeks opportunities to share their good people with others in the business Consults their team on decisions that effect them
Score 4, 5 or 6	Provides one on ones periodically to most employees Provides occasional feedback tot heir employees Communicated mostly to team in email Talks to employees mostly about tasks, and sticks to own team
Score 1, 2 or 3	Arrives quietly and keeps to self Provides little direction to their team Communicates extensively in email Tends to blame own employees for performance

 

Management by Objectives (MBO)

Management by objectives is a process where longer term goals are set, normally collaboratively, for the business as a whole. These goals are then cascaded down to each division or sub-unit of the business.

These goals tend to be longer term, ranging from 12 month to three years. However, some shorter term objectives can also be set.

You will find MBO is generally used to define the performance standards of people completing non routine tasks such as management tasks or short-term projects.

How it works

• The manager and employee (the employee is normally a manager too) agree on the employee’s goals and how they will be measured. 
• Once the goals are set they meet regularly to discuss progress towards these goals.  It is also a good idea to discuss the method by which the goals will be achieved. During the discussions the manager provides feedback on progress towards interim goals.

The manager and employee need to be open to removing goals that become inappropriate when new inputs are received and to add new goals that become required.

• At the end of the agreed period the manager completes a review of the employee’s performance against the new and revised goals.

In MBO Programs there also needs to be an assessment of the way in which the goals were achieved, for example

• Did the project manager follow the business project management processes?
• Were stakeholders engaged appropriately
• Did the manager meet objectives in an ethical manner?
• Was the brand or long term future of the business placed at risk?

In your employee performance evaluations, you will find that MBO programs tend to be used in conjunction with other appraisal systems to get a complete view of job performance.

 

Choosing the right method for your employee performance evaluations

You will now have an overview of the five common rating methods used for employee performance evaluation. Whilst here they are all presented here as discrete methods you will find that in most cases a combination of rating methods is used.

• Graphic rating scale
• Global Rating
• Essay Method
• Behavioural anchored rating scales (BARS)
• Management by objectives

The ideal rating method for your employee performance evaluations is the one that “makes sense” for you. To determine the right method for your application you need to workout

• How many people will be evaluated?
• What resources do you have to invest in developing your rating system?
• How much value will additional investment in the rating method deliver for your business?
• How frequently can you measure performance?

 

Next Steps

Your employee performance evaluations require you to assess your people against a performance standard, what is considered to be a fair standard? Click here to find out how you can determine a fair performance standard for your people.