Performance Management Rating Scales

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1 Performance Management Rating Scales When looking at Performance Management, a 5 point rating scale is the most common. A CIPD report suggests that: 47% of companies use 5 point scale 28% of companies use 4 point scale 5% of companies use 3 point scale Using a 5 point scale, you can typically expect the majority of employees to fall into the middle category. Some of these companies use just numbers, so rate employees a 1,2,3,4 or 5. Instead of using just numbers, try putting some words around what you mean to make it really clear to employees how they have performed. There is an example below of a simple 5 point scale. Exceptional Quite simply this category is for anyone whose performance against both personal and behavioural objectives stands head and shoulders above everyone else. We d expect this category to apply to a small percentage of employees, and those who achieve this rating should be recognised (in a way that s relevant to their role) as an exceptional contributor. Excellent Those in this category will be regularly exceeding expectations, achieving all of their objectives, and performing to an excellent standard against both their personal and behavioural objectives. Great Stuff Good news: this person is achieving most or all of their objectives, including the agreed behavioural ones. They may even exceed expectations at times. Anyone performing at this level should be congratulated, as they re a highly valued team member, making a good contribution to the business. Getting There This category is for people who aren t quite meeting their objectives. This might mean they ll have some behavioural development needs or just that for some reason they didn t quite achieve their personal objectives. However, it could also apply to anyone in a new role or new to the company, so an action plan isn t always necessary. People in this category might benefit from additional reviews, just to make sure their development remains on track. Unacceptable This category is for people who are clearly not meeting their agreed objectives and there is a need for real development. This level of performance isn t acceptable, so there will need to be an action plan to turn things around.

2 A more detailed example of a 5 point rating scale Rating You re outstanding you exceed what s expected of you in every way. You pro-actively seek out additional responsibility whilst overperforming in delivering your own objectives. You re seen as a role model within your team and have an outstanding reputation with people outside your team You re doing a great job you re delivering all of your objectives, maybe even excelling in a few, as well as behaving in the way that is expected of you. You re a valued member of the team, making a great contribution to the business You re almost there - you re achieving most of your objectives but not all of them and do have some development areas. You might be new to role and had a step up in responsibility, moved to a new area, or be inconsistent in delivery needing to demonstrate performance improvement What you do (your objectives) You re over-delivering on all of your objectives, consistently going the extra mile. You think of new ways of doing things and are seen as a great source of knowledge both inside and outside your team. You continuously deliver high quality outputs and exceed all standards required for your role You re both confident and skilled in your role, consistently delivering what is expected of you and possibly a bit more. You consistently and effectively deliver the high quality and quantity of work that your role requires, achieving your objectives within required timescales You re on your way to achieving your objectives, having achieved some of them, but not all of them. You need to make sure you fully understand what s expected of you and any development needed so you can achieve all of your objectives next time How you do it (your behaviours) The development you need Expected dist. You re a role model in how you behave As you re seen as a role model, you 10 % in all your interactions with others, could consider becoming a mentor or putting the customer at the heart of career coach to help develop others as everything you do and encouraging well as your own skills. You should others to do the same. Your behaviour also consider some stretching means that you stand head and shoulders objectives or projects to develop your above your colleagues and you re skills and behaviours further, as well identified by peers and managers at as identifying any future career moves being excellent at what you do and a key that might be of interest. You can contributor then agree an development plan with your manager that helps you work towards this You demonstrate the behaviours required in your role, almost, if not all of the time. If you re given developmental feedback on any element of your behaviour, you quickly strive to act on it, putting a plan in place to resolve it so it doesn t happen again You re not demonstrating all the behaviours needed for your role and have some development needs. These might have been highlighted to you before but you haven t managed to rectify things or it may be that you re learning new behaviours needed in a new/changed role. You need to work with your manager to understand how to develop/ improve your behaviours You re doing a great job, but you may have some development areas which will help you excel in your role. It may help you to identify your strengths and understand how you can utilise these further. You may also want to start thinking about your next career move and what development options will help you get there You need to make sure you fully understand your objectives, including what is expected of you behaviourally. You should create a development plan that identifies where you need to continue to develop, how you are going to do it and show you re making progress against your plan. All development should be focused on getting up to speed in your current role % %

3 Unsatisfactory you aren t delivering your objectives or may be demonstrating negative behaviours on a regular basis. Your performance is failing to meet the standards expected from you within OUK You aren t delivering against your objectives and meeting the standards expected from you. Your performance fails to meet the requirements and expectations of the role, and deliver the outputs to the required timescales or quality You re not exhibiting the appropriate behaviour needed in your role or may be demonstrating negative behaviours. This may be adversely impacting your colleagues and stakeholders You need to act quickly, putting a formal development plan in place with your line manager and HR to address the areas of poor performance. Your performance against this plan should be tracked, and if improvement is not seen you may be taken through the capability process. All development should be focused on improving performance in the current role 1 5% 4 Point rating scales Some companies prefer to use a 4 point scale, as they feel it s not helpful for the majority of managers to be able to put people in a middle category. Employees also sometimes perceive a 5 point scale negatively, as the majority receive a 3 which is seen as average for doing a good job. Using a 4 point scale does help you get away from this perception. Example of a 4 point rating scale The scale will have categories for: Overachievement. This will mean that employees who are demonstrating outstanding performance can be recognised and rewarded Employees who are performing well. The majority of employees are expected to be in this category Underachievement due to the fact the employee might be new to role and may have had a step up in responsibility or scope. Employees will only be expected to sit in this category for one performance review cycle Underachievement. Employees need to turnaround their performance and start performing. Alternatively they could be in a job which isn t matched to their skills, in which case they need to be given assistance to find a more suitable role

4 Another example of a 4 point scale Significantly exceeds expectations You have significantly exceeded what was expected of you on the majority of your personal objectives, as well as demonstrating the behavioural objectives needed. You consistently go above and beyond what you need to do and probably the person that others turn to for a task that needs to be done well. You stand head and shoulders above your colleagues and are a probably source of knowledge or assistance to the team and demonstrate role model behaviour. Other members of the team may use you as a source of advice and assistance, asking for your opinions. You are constantly focused on the customer and how to make their experience better, as well as the wider business objectives and helping us to differentiate from the competition. You are also probably focused on your own development and keen to improve your own performance, with a career development plan in place that is focused on them reaching their full potential. You constantly look for ways to raise the bar. Achieved all expectations You are doing a really good job. You are achieving all your personal and behavioural objectives and even excelling in a few. Developing into role You are new to the role and might have had a step up in responsibility or moved to a new area and still be finding your feet - we don t expect you to be at full speed straight away. You are well on your way to achieving your objectives and getting up to full performance. You need to make sure you fully understand your objectives and what is expected of you to make sure that next performance review you are achieving the majority of your objectives - it would be unusual for you to sit in this category for more than one performance review cycle. Not fulfilling expectations You aren t achieving your objectives, personal or behavioural, and need to turn things around. Your performance might just have started slipping, but you need to sit down with your manager and work out what you can do to improve things and get them heading in the right direction. You need to discuss any developmental needs with your manager, or you could be in a job that is unsuitable for your skills so may want to discuss changing roles.

5 Problems with rating scales We all interpret our company s rating scales in different ways and have different benchmarks. What one manager sees as good may not be considered good by another manager. Some managers are also influenced by previous performance or a personal relationship with the employee. One way of avoiding biases and ensuring performance reviews are seen as fair and consistent is Calibration. Calibration ensures that employee performance is rated fairly and consistently and increases consistency by reviewing the performance of your people as a management team. In a typical calibration session, managers look at the spread of ratings for their department or function and decide honestly if it accurately reflects the collective performance. The performance of individuals can then discussed to ensure consistency across employees. Calibration shouldn t be about a forced distribution curve, although most companies set some expectations and guidelines to ensure costs don t spiral out of control. In theory employees should like calibration because it encourages fairness and allows great performance to be recognised. In reality though, employees dislike it. Why? Often because of the way it is managed. Managers sometimes avoid difficult discussions, telling employees they would have liked to rate them higher but they can t because of the forced distribution. They might spring underperformance on an employee at a 6 monthly review, when they haven t mentioned it before. So, the problem lies with managers inability to manage their employees performance and have honest discussions, as well as the forced nature of calibration that is sometimes insisted on. This has the effect of dis-engaging employees. Our advice if you are going to do it (and it is a great idea to do it!) consider carefully how you will ensure that your managers are willing and able to support the process. Calibration should: Encourage fairness and consistency across your company Allow managers to get a different perspective on their views Raise the profile of high performing employees Highlight any issues with poor performing employees Encourage consistency around the provision of salary increases and bonuses

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