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  • Writer's pictureTom Stypulkoski

Why a Ratingless System?

Updated: Jul 13, 2023


Employee Performance Ratings

Welcome back to our continuation of the perform management dialogue. Last month we covered the issue of “Performance Ratings – The Never Ending Conflict”. If you haven’t visited our first blog please feel free – it covers some of the unsolvable issues with rating categorizations that has led us to today. (I was informed there was a glitch in the system regarding the ability to leave comments. This has since been fixed, so I welcome you providing your thoughts and contributions to the May topic.)


We have come to the realization that ratings have been very problematic in assessing and driving performance and engagement, and various combinations of ratings have only succeeded in moving the pain point boundaries without alleviating the discomfort. The only true way to alleviate this long embedded issue in workforce management is to embrace the concept of a performance management system that is ratingless. Initially this concept makes many talent management professionals and general management skittish, but that uneasiness can be alleviated when one comes to understand that a ratingless system doesn’t need to abandon the concept of ranking.


Ranking, even if informal, is a fabric of human behavior that everyone applies in their professional and personal lives. When we buy a home or lease a car, or when we are choosing between contractors for repair, we are a


lways comparing and mentally ranking to make decisions. This same concept can still hold true in a ratingless system, even when we eliminate performance categories, because the rigidity tied to categories can be abandoned. We will get into these details in our July blog. For now, let’s focus on why elimination of ratings can be beneficial.


By having the performance management system focus on the priorities that exist for both employees and managers, and having that process prioritize future development while incorporating current performance, actual rating categories become unimportant. So, what are those priorities?


Employees want:

· To be fairly assessed during the year, with immediate feedback.

· A process that focuses on skill and career development.

· An engaged manager providing feedback throughout the year.

· A more comfortable assessment dialogue to occur.

· A reward system that recognizes accomplishments and potential.

Managers want:

· Employees who are more open to constructive feedback.

· A system that focuses on skill growth to benefit the employee and the company.

· To avoid a time-consuming year-end process.

· To avoid the anxiety and consternation that comes with communicating ratings most employees will not be happy with.

· Some flexibility to effectively determine employee rewards.


When reviewing the above lists, there appears to be no direct correlation to a requirement to incorporate ratings to deliver on these priorities. Over time, ratings have been introduced for a few main reasons:

· To add a more systematic way to manage employee performance and its impact on compensation (such as the use of the merit increase matrix)

· A more systematic way to try and ensure fairness in assigned performance levels, as it allows for statistical assessment of results.


None of the above adds any substantive value to management and employee priorities to drive their productivity and engagement. What is needed now is to break away from the long standing performance management program “comfort zone” that most organizations have been living under, especially since it provides far less “comfort” for both the employees and managers living under it.


I welcome you all to share your comments and experiences regarding this topic. The more we share, the more we generate creative thought that feeds innovation.

In July we will continue the dialogue when we outline how a ratingless system can be effectively designed.


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