Implementing performance reviews means answering some big questions first. When and how often should they happen? Should you implement a 360-degree review process that accounts for peer feedback, too?
And then there are finer details, like your performance review rating scale. Is there really a meaningful difference between rubrics that give managers three, five, or even six options to choose from?
To find out, our Advisory Services team looked at performance review data from Lattice customers over the last two years. Our analysis included over six million employee ratings, revealing that the rubric you choose significantly impacts scoring distribution and how reviewers evaluate performance.
Rating Scale Options
Before making any recommendations, let’s look at just how prevalent each performance review rating scale actually is. The below represents the top four most popular performance rating scales used by Lattice customers.
Scales with five options are by far the most popular, used for over 60% of all performance review questions. Four-option scales rank a distant second, accounting for 21% of questions. No other rating scale reached the 10% mark.
Lattice Advisory Services has a hypothesis as to why so many teams opt for the five-point scale. First, giving reviewers just three or fewer options to choose from doesn’t provide the nuance nor flexibility needed to give employees detailed feedback. Secondly, and perhaps most importantly, low ratings are disproportionately rare. Averaged across all scales, only a tiny share of reviewers ever give the lowest rating possible: Just 1.3% do when ratings are numeric (e.g., “one”), and 10% when they’re descriptive (e.g., “needs improvement”).
Bottom line? In practice, three-point scales are really two-point scales. Four-point scales are three-point scales, and so forth.
“Many HR professionals would consider the lowest score of a rating question an indicator that the employee needs to be managed out,” said Julia Markish, Director of Advisory Services at Lattice. “Because people are generally less likely to give the lowest score, you need to consider that the number of real options you are giving reviewers is actually one less than the number of options presented.”
Numbers vs. Words
What’s the difference between a “five” and a more descriptive rating, like “outstanding?” As just mentioned, a lot. The choice is about more than semantics. After all, being told by your manager that you need to improve may sting, but it isn’t absolute. On the other hand, being assigned a low numeral may come off as harsh or even dehumanizing.
“Performance reviews are very personal and based on relationships. Whether we like it or not, having numbers associated with the options is actually counterproductive,” Markish said. “It can make giving someone the bottom or second-to-bottom option feel like a condemnation.”
No matter the number of options available, reviewers presented with numeric ratings are less likely to rate individuals with the lowest option. The contrast is most pronounced among rubrics with four and six options, with less than 1% of respondents giving numeric “ones.” By comparison, the same segment was over 10 times more likely to give someone the lowest rating, like “needs improvement.”
There’s also evidence that People teams increasingly agree with that sentiment. In the last twelve months, the share of review questions without numbers has increased by 40% among Lattice customers. Anxieties around mental health and economic uncertainty during the coronavirus pandemic may have played a role in driving the shift.
1. If you’re going to score employees, use a five-point scale.
Using a five-point scale isn’t just the most popular approach to rating performance, it may be the most sensible. Other rubrics either give reviewers too little scoring granularity or too much. While it was rare for reviewers to give the lowest possible rating across all rubrics, it was also rare for them to give the highest rating when they had six or more options to choose from.
“We recommend five-point rating scales. And we especially try to stay away from three-option ratings, as they don’t provide nearly enough nuance,” Markish said. “That’s especially true for your high performers, or so-called ‘10x-ers,’ as it limits their opportunity to get recognized by their peers and managers.”
That recommendation is seconded by Peoplism, a Lattice partner and HR consulting firm that helps companies build more inclusive and equitable workplaces. In HR’s Guide to Making Performance Management More Equitable, the firm notes how the rating scale you choose may even influence diversity, equity, and inclusion (DE&I). A study cited by Peoplism found that women are less likely than men to receive the highest score possible when the rating scale is 10 points. But when the same raters judged people on a five-point scale, women were just as likely as men to receive the highest score possible.
2. Opt for descriptive ratings, not numeric scores.
Numbers and words impact us differently, and we found statistically significant divides between situations where numbers were and weren’t used. To get the most out of your scale and encourage reviewers to actually use the full extent of the options provided, we recommend companies opt for descriptive ratings, not numeric ones.
“Our recommendation is to remove numbers from your rating options and only leave descriptions. The data is already trending in that direction as well,” Markish said, referencing companies’ steady shift away from numbers last year. “The different distribution of scores between numeric and descriptive scores also supports this position.”
Employees are decidedly less wary about giving constructive feedback using words, not numbers. If you want employees to use your performance management process to the fullest, we recommend leaving numeric scores behind for a qualitative alternative, such as the following:
To what extent did this person meet expectations with respect to X in the last year?
- Did not meet expectations
- Sometimes met expectations
- Consistently met expectations
- Sometimes exceeded expectations
- Consistently exceeded expectations
- Far exceeded expectations
Depending on your culture and earlier review cycles, we recommend selecting either a numeric or descriptive scale (but not both) so that you end up with five options at the end.
Lattice Advisory Services helps HR leaders identify and execute the People strategies that fit their unique needs — strategies that create value for their companies and meaning for their employees.
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