Rating employees is an activity many people dread, whether it’s entry-level workers or the corner office. So much time is spent formulating performance management systems from number scores to the right workplace language to use i.e., “on target” and”meets expectations.”
According to Jennifer Steinmann, a chief strategist at consulting giant Deloitte, the company spends almost 2 million hours every year on its employee rating system from filling out forms to discussing and devising a system.
All of those hours spent creating a system can come up short if ratings reduce workforce morale or do not engage employees in the part they play within the company.
“We’d call them the walking wounded,” Devra Johnson, a human resource director at Intel Corp., told The Wall Street Journal, about employees who received a middling grade.
The computer chip manufacturer still uses a scale ranking system that goes from “outstanding” to “improvement needed” even though other corporations such as The Gap and Microsoft decided to abandon the rankings altogether because of low employee morale.
According to Marc Farrugia, the vice president of Sun Communities Inc., a manufactured home developer, some bosses will use the employee rating system to give good marks and bonuses to high-performing employees that they are afraid might leave. On the other hand, some rating systems just do not give a clear picture because an employer will rate all employees as average to get the paperwork done and out of the way.
“I’m being more and more convinced that ratings are doing more harm than good,” Farrugia told The Wall Street Journal.
A study conducted by the University of Iowa found that 62 percent of the time, a supervisor’s rating of employees depended on the boss’ perceptions and subjectivity.
A new system
So how does a company find a happy medium to encourage employees to do their best but not cause anxiety or confusion? Deloitte thinks they have the answer by using the results from the Iowa study.
Steinmann said the solution is more face-to-face communication between supervisors and employees. Team leaders and bosses need to spend the time they currently use devising rating systems to actually talk with employees on a regular basis to discuss job expectations, how the employee is feeling about their role, how they can grow and where they see their career path going.
Having this dialogue is a better way to know what positions employees would be right for or where they would succeed in the company.
According to Steinmann, these weekly check-ins followed by quarterly meetings with an employee can give employers and human resource departments a better grasp and clearer picture of a hire’s performance rather than a laundry list of predetermined skills the person needs to meet.
The revamped employee review system could also add to retention rates while cutting down on workplace anxiety when it comes time for employees’ performance meetings.