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Performance Ratings And The Pursuit Of Individual Excellence

by James Canada

As the name indicates, the bottom line of any Results Based Performance system is the actual bottom line: Getting results in terms of People, Knowledge, Sales, Service, and Culture (our five Mega-Processes). But from a practical perspective, on an employee-by-employee basis, you need another way to quantify individual performance.

This is where tiered performance ratings are vital in letting each employee know precisely where they stand in the eyes of their manager or employer. Such a grading system can be structured in a variety of ways — each with its own benefits and limitations depending on the scenario.

For instance, to assess Engagement Updates (i.e., field assignment reviews), you might choose to implement a three-tiered scale, using letter ratings as follows:

E: Exceeds Requirements — Employee acts as a role model for coworkers on this engagement.
M: Meets Requirements — Employee fully meets all expectations.
N: Needs Improvement — Employee performance exhibits weaknesses that need to be addressed.

Experience dictates that a relatively smaller amount of data from one engagement serves as a better basis for distinctions among those three levels. However, that might not be enough information to ensure that reviewers can consistently assess performance over an extended period, involving multiple engagements or roles.

On the other hand, a five-point rating scale might provide a more accurate long-term assessment by forcing the reviewer to make finer distinctions in performance. This works particularly well when the rater has access to a large amount of information from multiple sources, as is the case when evaluating overall performance at the end of the year. A typical five-point scale might look like this:

5: Far Exceeds Requirements — Employee performance significantly and consistently exceeds all expectations and is of highest quality and value.
4: Exceeds Requirements — Employee performance usually exceeds all expectations.
3: Meets Requirements — Employee performance fully meets all expectations.
2: Need Improvement — Employee performance meets some, but not all expectations. There is a need for improvement or additional experience.
1: Unacceptable — Employee performance does not meet minimal expectations.

The use of different scales for Engagement Updates and Annual Performance Reviews means that you will not “average” the ratings to come up with a final grade. Instead, you must use your judgement to translate data from various sources throughout the year into an accurate overall assessment. No matter the methodology, it’s important for the process to be completely transparent.

James H. Canada is managing partner/CEO for Alliance Technologies LLC, ITEN mentor and author of “Corporate to Entrepreneur: Strategies for Success.” Contact Jim at, 636-734-2337 or

Submitted 1 years 66 days ago
Categories: categoryEntrepreneur's Toolbox
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