The Truth About Performance Ratings

Performance ratings are a long-held practice of organizations everywhere, normally given during a year-end performance evaluation. Although the idea of measuring performance and rewarding high performers seems foolproof, the system has some major flaws. These four unfortunate truths about performance ratings have lead many employees to call for an end to the practice.

The Reality of Calibration

Calibration in the performance evaluation process is the practice of comparing performance ratings of workers with those of employees holding similar job titles under other managers. This helps to ensure one manager doesn't unfairly rate workers lower or higher than other managers. Unfortunately, calibration usually results in bringing higher scores down to an average 3, while scores of 3 are very rarely raised or even questioned.

Company Practices Can Affect Your Rating

Companies use a wide variety of methods to distribute performance ratings, and often, this means operating on a bell curve or using a minimum number of low ratings per group. In other words, even if your company has a huge percentage of high performers, some of these employees may still be given low ratings to fit company expectations. This unfortunate reality can damage the healthy drive to succeed and improve as high performers receive unfair ratings just to fill a quota.

Budgetary Constraints Play a Part in Performance Ratings

One of the primary purposes of the traditional performance rating system is to create a fair way to distribute raises, but the reality is that companies often assign a limited budget for each department before evaluations. Although managers can occasionally convince leadership to afford more to the budget to cover raises for a higher number of exceptional workers, this is not the norm. More often, managers find themselves forced to give out more average scores so that pay raises fit within the established budget.

High Scores Aren't Always Worth the Extra Effort

Reaching a performance rating of 4 or 5 may seem like a worthwhile goal, especially because it generally means a better raise. However, what workers need to do to achieve these scores aren't always clear, even to managers. When requirements are known, they generally involve volunteering and longer hours. Even if you do put in the extra work for a minimal increase in pay, the other factors at play still don't guarantee a high score.

Calibration, a company's desired score distribution, and budgetary restrictions can all lead to unfair performance ratings. Even achieving higher scores may not always be worth the effort. As a result, employees shouldn't get too emotionally attached to their scores, striving instead to make themselves a hardworking and invaluable part of the organization, score or no score. After all, until a new system comes into vogue, many companies are stuck with traditional performance ratings.

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