In today’s competitive workplace, employee ratings have become an important tool for measuring employee performance and productivity. Creating a rating system can help identify areas where employees need improvement and incentive programs can be put into place to encourage positive changes.
But what is the best way to use these ratings? How can they be used to improve workplace productivity?
Below, we’ll examine:
- What a rating system is
- The different types of employee ratings
- Some key benefits of a rating system
- How to create an effective rating system
- Ways to use employee ratings to improve productivity
- Challenges you might face along the way
Ready? Get your report cards out and let’s dive in!
What is employee rating?
Before getting into our list of tips to effectively use employee ratings to improve productivity, let’s first familiarize ourselves with what exactly these ratings are.
Employee ratings are numbers or percentages that are assigned to employees by their managers; these are usually done on an annual or semi-annual basis.
Ratings can be based on several factors such as:
- Quality of work: How well an employee completes their tasks and projects
- Dependability: Whether an employee can be counted on to show up on time and complete their work
- Creativity: The innovative thinking an employee brings to their work
- Leadership: An employee’s ability to take charge and motivate others
- Communication: How well an employee expresses themselves, both verbally and in written form
- Teamwork: An employee’s ability to work well with others
- Customer service: How well an employee deals with customers or clients
Some employers also include factors such as job knowledge, the quantity of work, and attendance records. These ratings are generally given on a scale, with the most common being 1 to 5 or 1 to 10. Once all employees have been rated, the average rating for each employee is calculated.
They are usually measured either through surveys sent out to customers/clients or completed by a sole evaluator like an HR manager or team supervisor.
At least, that used to be the all-encompassing definition for employee ratings. These ratings have been around since the third century — and have been criticized for just as long.
Many studies and surveys have found that sometimes, performance ratings can generate an attitude of fear and dread that causes them to be counterproductive in the workplace.
Hence why the report card-like definition above can be considered outdated. Indeed, many companies and businesses have adopted new employee rating tactics and practices to make them more effective and beneficial for everyone involved.
Today’s rating systems
Now, companies are finding ways to make ratings more interactive, effective, and positive experiences for both managers and employees.
Here are some modern examples:
- Self-evaluations: Employees complete a self-assessment of their performance before their annual review. This allows them to see how they view themselves in comparison to how their manager will rate them.
- 360-degree evaluations: In this type of evaluation, employees are rated not only by their managers but also by their co-workers, subordinates, and even customers. This provides a more well-rounded view of an employee’s strengths and weaknesses.
- Check-ins: Rather than waiting for an annual review, check-ins allow employees and managers to have regular, informal conversations about performance. These can be done monthly, quarterly, or even weekly depending on the company’s preference.
In addition to these new types of rating systems, there is also a shift in how companies are using ratings to improve productivity. Rather than simply using ratings as a way to identify areas of improvement, many companies are now using them as part of a larger strategy for employee development.
This includes using ratings to create custom development plans for employees and setting goals for employees to work towards. By taking this approach, companies can ensure that their employees are constantly developing and growing in their roles — ultimately leading to a more productive workplace.
If you’ve heard the buzzword gamification over the last few years, it refers to the process of applying game-like mechanics to non-game contexts like the workplace.
One way this is done is by using employee ratings as part of a larger point system. For example, employees could earn points for completing tasks, meeting goals, or displaying positive behaviors such as teamwork or creativity.
These points could then be redeemed for prizes or used to unlock new levels and rewards.
This approach can be an effective way to improve productivity as it encourages employees to not only complete their tasks but also to go above and beyond in their work. In addition, it can create a sense of friendly competition among employees which can lead to even higher levels of productivity.
While gamification may not be right for every company, it is something to consider if you’re looking for new and innovative ways to improve workplace productivity.
Why is employee rating important?
Although they can be a dreaded event at the workplace, employee ratings, when delivered effectively, increase productivity, motivate, and improve employee satisfaction.
Employee ratings offer employers and managers a way of measuring how an employee is performing relative to their peers at your company.
By comparing these ratings across different departments within your organization, you can determine which areas need improvement, resulting in better decision-making about where resources should be spent for identifying problem areas and developing training programs.
Any level of feedback between manager and employee is good, but anonymous feedback can often be taken the wrong way. If an employee rating system is in place, it can help to improve lines of communication as it provides specific, measured, data and an actionable plan.
Show up on time five more times, and your attendance rating will improve. That simplicity can be invaluable when trying to communicate between seniority levels.
This also allows employees to voice their concerns about their job or department without feeling like they are putting themselves at risk. Overall, this leads to a more positive work environment where employees feel like their voices are being heard.
Clarity of expectations
Along the same lines, when an employee rating system is in place, it becomes easier to set expectations for employees.
If you want your team to improve their customer service skills, you can look at the data from the customer service ratings and use that to create training programs or individualized development plans.
The key is to be as specific as possible when setting these goals so that employees know exactly what they need to work on. Without a rating system in place, it can be more difficult to identify areas where employees need improvement.
Enhanced focus on individual development
No employee enjoys company-wide training, that isn’t relevant to their position or skills. But, when you have a rating system in place, you can target specific areas for improvement and create more individualized training programs.
This helps employees feel like they are being valued as individuals and not just cogs in a machine. When employees feel like their company is invested in their development, they are more likely to be engaged in their work and less likely to look for new opportunities elsewhere.
When employees can see how their performance is impacting the company’s bottom line, they are more likely to be motivated to improve. If you make it a goal for each employee to increase their rating by X% each year, you will likely see a bump in productivity as employees strive to reach that target.
You can also use the rating system to create bonus programs or other incentives for employees who outperform their peers. This provides additional motivation for employees to not only improve their performance but also to help raise the bar for those around them.
Better overall performance
A rising tide raises all ships, as they say, and it is no different in the world of employee ratings. By having a rating system in place, you can help to improve the performance of your entire company. As employees strive to improve their ratings, they will also be working to improve the company’s bottom line.
And as we all know, a company that is performing well is more likely to attract and retain top talent. So not only will you see an immediate bump in productivity, but you will also be setting your company up for long-term success.
Remember though that just because someone has a low employee rating doesn’t necessarily mean they’re not doing good work — it could just mean that they are out of their comfort zone and would excel somewhere else.
Employee ratings also make available a way of rewarding top performers and improving employee satisfaction by increasing transparency within your organization about who is striving for excellence.
This is especially true if these ratings are used to determine compensation, bonuses, promotion opportunities, or other rewards for employees at different levels in the workplace hierarchy.
When everyone has the same understanding of what needs to be achieved, improvement can happen more smoothly across departments instead of having people working at cross-purposes without knowing it.
How to create an effective rating system
What are the actual mechanics of a rating system? Let’s look through a quick checklist of how to create one for your company:
- Define what you want to measure: Figure out which areas of employee productivity are most important to your company. Do you want to focus on the quality of work, attendance, customer service, or something else?
- Create rating categories: Once you know what you want to measure, create a few different rating categories. For example, if you’re measuring the quality of work, you might have ” poor,” “average,” and “excellent” as your categories.
- Decide on a scale: You’ll also need to decide on a scale for your ratings. A 1-5 scale is typical, with 5 being the highest rating.
- Train managers: All managers must know how to use the rating system and what it’s meant to accomplish. Managers should be trained on how to fairly and accurately assess employee performance.
- Collect data: Finally, you’ll need to start collecting data. This data can be collected through weekly or monthly check-ins, performance reviews, or some other method.
- Monitor results: Once you have a rating system in place, it’s important to monitor the results not just of the employees, but the system itself. This will help you determine if it is working as intended and identify any areas that need improvement.
Remember, a rating system is just one tool you can use to measure employee productivity. There are many other ways to assess employee performance, and no single method is perfect. The important thing is to find what works best for your company.
Tips to improve productivity with employee ratings
Now that you know why employee rating is important, here are some tips to build on this knowledge and use this to improve workplace productivity:
Studies have shown that more than half of the time, performance ratings are affected by the rater’s personal biases and prejudices rather than the actual characteristics or traits of the subject being rated.
With this in mind, your number one priority should be to make employee ratings as objective and unbiased as possible. Of course, this is easier said than done, as being completely unbiased is practically impossible.
That being said, there are still ways to minimize the personal biases of those performing employee evaluations. One way we’ve found to be effective is offering specific guidelines that have been peer-reviewed and approved by the evaluators.
That way they know what kind of information is necessary to make an assessment, as well as what factors don’t matter in determining the final evaluation.
Another approach that helps ensure employee ratings are objective is having multiple evaluators rather than leaving the task to just one person. Evaluators, aside from HR managers, can be teammates, co-workers, clients, and even outside sources that have no connection to the employee being rated.
Doing this also means that you are gathering more information and documentation, which paints a much clearer picture of how an individual is actually performing, rather than simply relying on one evaluator’s word alone.
Plus, this protects the employee being rated from unfair rating practices, contributing to employee satisfaction.
Make everything clear
When setting goals or expectations for employees during employee reviews (or at any other time really), you want to be as specific as possible about what each goal entails so that there is less room for misinterpretation later on down the line.
This will prevent lengthy discussions between managers and employees after ratings are delivered when everything is clear right from the beginning.
Aside from making goals clear, make sure that the comments being given out during employee ratings are specific, relevant, and useful to the employee being evaluated.
Generic comments such as “you’re doing great!” or “you need improvement” are not helpful and can be misleading depending on how they are phrased. So try to come up with something more constructive than these overused remarks.
Another way of bringing clarity to employee rating time would be having a checklist or rubric for evaluators to reference throughout their rating process — this ensures that everyone knows what information should go into an employee evaluation and nothing important is overlooked in the process.
When everything is made as crystal-clear as possible, from start to finish, there is less room for confusion, which can greatly improve workplace productivity.
Use multiple employee ratings
Not everyone is the same, and employee ratings shouldn’t be either. Different departments have different types of work that need to get done — and just because someone does well in one department does not mean they will do as good of a job if moved to another area.
This means that employee rating should always involve comparing employee performance within a team or group, rather than directly against others rated outside their immediate circle.
By using employee ratings from multiple sources like peers, managers, direct reports, or customers/clients, you can help identify which areas an employee needs improvement in, better enabling them to contribute overall throughout your company’s operations.
Use appropriate performance review phrases
Instead of using the standard 1–5 rating scale that all employees have come to dread, you could use performance review phrases that are positive, relevant, and provide advice or suggestions for improvement.
For example, instead of simply rating an employee a 3, “fully competent”, or “meets expectations” in terms of timeliness, use phrases like “keeps commitments to get work done” or “places a premium on planning.”
This way, employees will have actionable ratings to inform them about their performance, rather than general comments or vague numbers that do not tell them what it is exactly they should keep doing or start working on.
Streamline the process
Try to create rating processes that are not only effective but also efficient, so things don’t get bogged down and cause delays. Doing this allows employee ratings to be done as quickly and painlessly as possible, which is great for employee morale and company productivity.
A great way to streamline the rating process is by using employee rating software to store employee information, track employee progress over time, and automate the rating process itself.
This means no more data entry or manual emailing back-and-forth after each employee is evaluated — just a few clicks of the mouse will get everything done in one go!
One important thing to keep in mind when using employee rating software is to ensure that you are picking out software that is both automated and customizable.
The automation allows for a much faster process, while the customization makes it so the software can fit your company’s specific business practices accordingly.
Challenges you may face along the way
Creating an effective employee rating system is not without its challenges. Here are a few challenges you may face and some tips on how to overcome them.
Resistance from employees
Some employees may resist being rated or may feel that the system is unfair. It’s important to communicate the purpose of the rating system and why it’s being implemented. You should also be clear about what the ratings mean and how they will be used.
One of the biggest challenges with employee ratings is that they can be biased. This can happen if managers only rate employees they like or if they let personal feelings affect their assessment. It’s important to be aware of this bias and to train managers on how to avoid it.
Another challenge is that ratings can sometimes be inaccurate. This can happen if employees are rated on factors that are not indicative of their actual performance or if data is collected incorrectly.
To overcome this challenge, it’s important to be clear about what you’re measuring and to train managers on how to accurately assess employees.
Finally, some companies may rely too heavily on employee ratings. This can lead to managers making decisions based on ratings rather than actual performance.
It can also lead to a feeling of competition among employees rather than cooperation. To avoid this, it’s important to use employee ratings as one tool among many when assessing employee performance.
Despite these challenges, employee ratings can be a helpful tool for measuring employee productivity and identifying areas for improvement. By following the tips above, you can create an effective rating system that can help your company reach its goals.
Employee rating may be dreaded by all, but with the right practices and considerations, it doesn’t have to be a pain in the neck or a waste of time.
By doing ratings right from start to finish with adequate employee evaluation phrases and multiple sources of input, you can help improve productivity by allowing each employee to understand exactly what they need to do to contribute to your company’s operations running as smoothly as possible.
Did you know that time tracking is an essential aspect of determining employee performance? Day.io is a great time tracking software that provides you with accurate, easy-to-read data you can use to effectively conduct your next employee performance rating. Get started with us today!