performance rating review

Applying behavioural science to employee performance ratings

The spring 2014 Employee Outlook Report from CIPD found that one in three employees feel their performance management process, and the communication from their managers, is unfair. If you think your employees might be in the same boat, taking another look at your performance rating scale is a simple way make improvements.

The most familiar rating scale in used performance reviews is the ‘likert’ developed by psychologist Rensis Likert in 1932 as a way of gaining graded responses from his surveys. It’s quick to complete and an easy way to view scores in comparison or in isolation. However, doing it the Likert way has some pitfalls which can result in dodgy numbers and dissatisfied employees. Below are some easy fixes to ensure your ratings are as effective and accurate as possible.

  1. Fighting the Drift to the Average

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One of the disadvantages of many employee rating scales is that they are unidimensional. The narrower the range between the extremes, the harder it becomes to actually understand where people actually place themselves. The most common number range is between one and five, with three representing the average.

It is often the case that managers avoid choosing the extremes and tick a safer number somewhere in the middle. This bias causes distorted results and ultimately a collection of numbers that has no bearing on the true performance within an organisation.

Suggestion: Provide your employees with a scale that is wider than the common five-point scale to be able to catch more nuances in their rating. A scale that ends in an even number will ensure employees and managers alike are encouraged to pick one side or the other.

  1. Category Framing

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Numbers have cognitive weight. When you ask people to choose a number to describe themselves, they will not only respond pretty quickly, but will also happily explain why that number suits them.

Most employees will have pre-existing assumptions about how to rate their performance on a purely numeric basis. However, if this assumption doesn’t meet the reality, this can lead to a shock when it comes to their review.

Suggestion: Guide your employees with clear descriptions to indicate how the categories relate to their performance bands. This will help them understand and learn from their ratings, while also helping managers make an informed choice.
A frequent example of poor framing is the classic ‘average performance’ category. What is average performance? Avoid this moniker, unless you provide clear examples of what average performance means for your organisation.

  1. Use of Colour

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As with numbers, colours prompt cognitive associations; prison cells around the world have been painted pink since 1979, after researchers in colour psychology showed a linked reduction aggressive behaviour.

Adding colour to your rating categories will evoke an emotional response that complements its verbal reasoning, while the use of shading is an easy way to indicate nuances between each choice.

For example, a lower number like ‘3’ may evoke negativity, but if it is shaded as light green next to a darker green ‘4’ and ‘5’, it indicates to the respondent that he or she is still in the spectrum of acceptable performance.

Suggestion: Colour your categories to avoid negative associations with numbers, and add shading variations to ratings. An easy way to ensure your colours resonate is to use the traffic light model of green, yellow and red to easily communicate to your employees where their performance fits within the organisation’s expectations.

  1. Avoid the Bonus Trap

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Employee reviews are a great way to improve output and productivity, but for many organisations this becomes secondary to HR spreadsheet completion and bonus allocation.

On both the employee and management side, biasing performance reviews towards bonuses can add stress and blinker individuals. Managers may attempt to be fair to one employee or another by bumping or lowering their ratings. Equally, employees can see a rating scale as an opportunity to make a case for a fatter cheque, rather than as an opportunity for development.

This is particularly the case when both figures are presented simultaneously to the employees. An obsession over bonuses can also reduce employee trust in the ratings, as the process may appear to be more about capping money spent than it is about helping employees to develop or maximise their progress.

Suggestion: Separate performance rating from your bonus awarding. A simple way to achieve this is to give employees individual ratings for specific aspects of their work output such as team work, organisational skills and work quality. The average can be used to calculate a bonus, but as you have severed the direct tie between the bonus amount and a single rating number, employees are more likely to use these numbers in a productive way.

Small changes can make a big difference

You wouldn’t be alone if you haven’t given your review rating scale a second thought in years. But if behavioural economics has taught the world anything, it’s that a few small changes to elements we’ve long ago accepted as set, can make a huge difference to your desired outcome.

This article was originally posted on HRZone.

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