Research shows that top-performing employees perform at 400% of the level of the rest of the organization – yet without rating performance, you wouldn’t be able to identify and act on these performance differences systematically. Properly designed performance ratings help differentiate high performance from low performance, identify areas for improvement, and offer transparency in decision-making. Further, employees want to understand what’s expected of them to get a raise, get promoted, or develop their skills, and that requires some form of measurement around established performance criteria.

Without a universal way to gather structured data, you often open yourself up to inaccuracies and biases when making decisions. As an organization, you need to be able to make data-informed decisions when it comes to promotions, compensation increases, and development opportunities. The simple answer is that organizations need an understanding of how employees perform so the individuals and organization can continue to compete and grow. You may be wondering why we have to rate performance in the first place. In this blog post, we explore why rating scales may be a valuable component of performance reviews and share recommendations on creating one that works for your organization. The key today is to use lots of data and feedback to make these decisions do them in a transparent and fair way clearly communicate what is valued in the company and give people visibility into others’ goals and projects. Organizations need to make decisions about people…and these decisions themselves are essentially evaluative by nature. Industry analyst Josh Bersin echoes this sentiment in one of his recent articles: Let me simply say that after a decade of discussion on the topic, the concepts of ratings themselves are not the issue. While these are valid concerns, the problems with rating scales tend to stem from bad design and bad data, not the rating system itself. They are viewed as impersonal, inaccurate, and lacking in nuance when evaluating employee performance. Rating scales on employee performance reviews often get a bad rap.

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