According to the firm’s new resource, ineffective performance management leaves room for subjectivity and bias and can have far-reaching effects on other HR functions.
In a time of economic uncertainty, the talent management function of HR is increasingly being challenged to make cost-effective decisions that align with organizational needs. Performance reviews and ratings are key components of performance and talent management. McLean & Company, the trusted research and advisory partner of HR leaders around the world, is responding to the need for guidance on how to select and customize a performance rating scale that meets organizational needs with its new Performance Ratings Guide.
“Ineffective rating methods have a negative ripple effect on other programs within and outside of the talent management framework,” says Grace Ewles, manager, HR Research & Advisory Services, at McLean & Company. “Ineffective or inaccurate performance assessments can negatively impact other key decisions, including successor selection and compensation decisions, and they often come with invisible yet significant long-term expenses.”
The firm’s industry guide explains that ratings help organizations by providing an accurate understanding of employee performance and helping to identify gaps. Ratings also allow employees to see a clear summary of their performance with objective feedback, which helps drive performance conversations and employee reflection. Furthermore, data gathered from performance evaluations are frequently used as input in other talent programs, meaning effective rating methods offer a host of benefits to organizations and employees alike.
“Selecting an appropriate scale is not enough to guarantee performance will be measured accurately,” adds Ewles. “Maintaining accuracy requires ongoing effort to ensure the successful application of the scale and that performance continues to be assessed in a valid and reliable way.”
The new industry resource aims to provide HR teams with data-backed tips and guidance to improve, implement, or adjust their rating processes, including:
- Risk mitigation for both organizations and their employees.
- An overview of the different types of rating scales, including recommendations for organizations to select the best option for their unique needs.
- Guidance on selecting and customizing performance rating scales.
- Best practices to ensure rating accuracy.
- Recommendations for communicating and rolling out the rating approach.
- Insight on the feasibility of removing ratings, if applicable, and exploring alternative approaches.
