How to Choose the Right Performance Rating Scale?

One of the most important aspects of effective employee performance reviews is to use objective and accurate performance review scales. A proper performance rating scale permits your managers to accurately and objectively express your employees’ competencies and determine the areas they need to improve. It’s vital to choose the best rating scale for performance reviews for your organization, and we’re going to help you do that!

What is a Performance Rating Scale?

Employers frequently use rating scales as a means of assessing employee performance or accomplishments. These scales are uncomplicated to implement, offer a thorough evaluation, and allow employers to discern which employees are thriving and which ones may need further assistance.

Rating Employee Performance 

Organizations use performance rating scales to understand individual employee performances, which provides companies with the data needed to improve and grow. To effectively collect and analyze employee performance data, your organization needs to use clear and objective performance metrics to avoid biases or inaccuracies during performance reviews. 

Objective employee rating scales are also beneficial for employees. Employees need to clearly see their performance levels and areas of improvement. In the absence of such improvement, they will lose out on raises and promotions. Furthermore, an objective performance rating scale enables transparent measurement of employee performance. 

When it comes to employer benefits, an objective job performance rating scale shows how employees are performing and helps in determining rewards and recognition. 

Important considerations when choosing an employee rating scale

Given the importance of performance management rating scales, your company needs to invest time and effort to produce the best rating scale for performance reviews to maximize results. To achieve that, you need to take the following considerations into account. 

1. Type of data to choose for the right performance review ratings

There are different ways of measuring employee performance. The data type you choose impacts what scale would be optimal for you. There are essentially three types of data: 

  • Nominal 

Also known as ‘categorical.’ This type includes data items that have no relationship with one another. In other words, the data items aren’t ordered or have an arithmetic relationship. An example of nominal data would include asking a qualitative question like, “How do you feel about your workplace?” The answers to this question would be non-numerical and impossible to order. 

  • Binary 

Binary questions give a choice between one of two options. Most commonly, binary questions will ask you to choose between yes and no. An example of a binary question in this context is, “Did you complete your monthly goals?” The answers to this question would be a yes or a no. 

  • Ordinal 

Ordinary data includes a rating scale with answers that can be ordered, but the difference between each item cannot be detected. For example, a question could ask an employee to rate workplace experience between poor, below average, satisfactory, above average, and good. The choices for this question can clearly be ordered, but the degree of difference between each answer cannot be quantified. 

2. Validity of your questions and categories

The most important consideration for designing the best rating scale for performance reviews is the data’s spread and validity. Spread and validity are important since most conventional data scales tend to be weakest in that area. 

  • Spread

We also know spread as variance, differentiation, and range. The term refers to the degree of difference among the data points. Ideally, your spread should be great enough to record as much nuance as possible. Most conventional performance analysis tools suffer in this category because they have a low spread. One example of a problem caused by a lack of spread would be if your managers rated all employees as high-performing. That’s because the scale being used doesn’t provide enough meaningful difference for managers to express nuance. The solution is to design performance management rating scales with diverse responses, like “Above average.” 

  • Validity 

Validity refers to the accuracy of the data recorded regarding the questions asked. As in, are your measuring tools measuring the data that your organization wants? For instance, if you measure caloric intake, does it affect relevant real-world metrics? You need to make sure your scales ask for data that are actually useful for your organization from an actionable perspective. 

3. Transparency

You need to train employees to properly understand and use the scales. They also need to be taught how to accurately interpret response options so that they select the apt ones. For that reason, transparency is the foundation of good employee performance measurement. Transparency also increases trust in your organization and builds its reputation for fairness, and encourages employees to be more accurate in their responses. One of the biggest mistakes that many companies make is that they openly claim to abolish the scale system, but secretly continue using it among executive and management teams. 

4. Presentation of Data

There are two primary ways to represent rating scale results: 

  • Numeric 

Numeric scales contain numbers and only express data arithmetically. Employees often dislike numeric scales due to the vagueness that surrounds them. For example, how would a manager meaningfully distinguish between awarding a rank of 4 vs. a 5 for an employee in a subjective metric like “leadership”? The difference between successive points can be difficult to narrow. Therefore, managers exercise high subjectivity, which reduces accuracy. 

  • Descriptive 

Descriptive scales provide qualitative information, usually as descriptions of what each scale item represents. Descriptive scales range in complexity, from different agreement levels to a specific set of actions the employees must take for each question. An example of a descriptive scale could include asking employees if they feel workplace culture is accepting of them and providing them with a scale that ranges from agree to disagree.

Types of Performance Rating Scales

Here are some existing performance rating scales you could use. 

1. Likert Scales

Performance rating scale: Likert

The Likert scale is used for measuring responses to statements. The most common Likert scale has values ranging from ‘Strongly Disagree’ to ‘Strongly Agree’ with ‘Disagree,’ ‘Neutral,’ and ‘Agree’ in between. Likert scales are symmetrical and contain an equal number of positive and negative responses to provide balance. 

The above-described scale is the most common, but there are other options. The number of scale options is even or odd. An odd number Likert scale will usually have the middle value representing neutrality. An even number Likert scale is considered a ‘forced choice’ scale since participants will be forced to choose a side. 

2. Semantic Scales 

Performance rating scale: Semantic

Semantic scales present two extremes, with several unnamed choices in between. The idea behind the semantic scale is to provide the recipient with an intuitive range of expression. For instance, you could ask an employee whether they think a project was a success or failure with a scale ranging from success to failure, with 7 options in between to represent the degree of agreement. 

3. Custom Scales 

If existing scales prove ineffective for your needs, you could build custom ones. The advantages of custom scales are that HR teams can build them to solve their company’s specific problems. But, custom scales could lead to distortions in data if you’re not careful about how you construct them. 

4. The four-point rating scale for performance reviews

The 3-point rating scale is the industry norm, but the 4-point scale has increased in popularity. The 4-point rating scale is the best option for you if you want more nuance than the 3-point scale provides. 3-point scales have been criticized in the past for being too restrictive. As explained previously, the greater the spread a scale has, the more insightful information it’s able to provide. So, a 4 point scale is a better choice than a 3-point one. 

Here’s an example for 4-point scale: 

“Does the employee meet expectations?”

Option 1: Needs Development 

Option 2: Occasionally Meets Expectations 

Option 3: Consistently Meets Expectations 

Option 4: Exceeds Expectations 

We’ve increased the question’s spread by introducing the additional “Occasionally Meets Expectations” option from an original 3-point scale that lacked it. 4-point scales are useful for simple questions that don’t have too much nuance, but they’re unsuitable for complex questions. Depending on the complexity of your employee performance review, using a 4-point scale may or may not be advisable. 

The best advantage of the 4-point scale is that it avoids centrality bias. Centrality bias is when your managers award average scores to all employees, leaving your overall performance review showing most employees as average. By introducing a 4-point scale, managers can no longer award average scores to most employees. 

5. UC Berkeley Scale

The UC Berkeley Scale was developed by the University of California, Berkeley. The scale has a 5-level system with ratings that range from ‘Unsatisfactory’ to ‘Exceptional.’ Supervisors assign values to employees based on their overall performance. It’s expected that managers will assign the Exceptional ranking rarely to employees to ensure that it’s done properly. 

6. Harvard Scale

Harvard University developed multiple rating scales for different metrics. The following 4 are the most important scales: 

1. Overall Performance

The overall performance rating scale has the 5 following points: 

  • Leading
  • Strong 
  • Solid 
  • Building
  • Not Meeting Expectations

2. Goals

The Goals scale uses a 3-point rating that measures whether a goal was successfully completed. 

  • Goal was met 
  • Goal was partially met 
  • Goal was unfinished 

3. Competencies 

The Competences scale has 4 points, and it determines whether employees possess thorough or inadequate knowledge of the organization’s major competencies. The scale has the following points: 

  • Advanced 
  • Proficient 
  • Developing 
  • Does not demonstrate knowledge 

4. Direct Report Rating 

Managers only use the direct report rating scale to determine the effectiveness of employees’ abilities. It has the following points. 

  • Highly Effective 
  • Effective 
  • Requires Improvement 

In conclusion, your organization could adopt many job performance rating scales. But, given the importance of effective and objective performance measurement for your organization, it’d be best to find the best scale for you. The best rating scale for performance reviews for your organization depends on your specific needs and what your organization wants to achieve.

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