A company can put a lot of time and effort into finding and measuring what it needs to prosper – but that’s no guarantee of success. Performance reviews are a way to assess the day-to-day effort related to these factors, and companies often uses a numerical rating system to evaluate their employees. This makes calculating a performance rating easier, but can lead to some problems.

Prioritizing Based on Roles

The first issue unweighted performance factors have is related to corporate functioning. Not all dimensions a business assesses are equally important. Although every factor measured should be relevant to the enterprise, some are more essential than others.

A simple solution is to use a numerical scale, but give weighted averages. These place greater importance on skills essential to the business. You can handle weighted averages in one of two ways: use simple scales, but assign each factor points relative to the overall rating depending on importance; or use the same rating scale for all skills, but assign each measurement a percentage of the whole. Consider the following specifics of each approach:

  • Points based on importance. This is a more complex way of measuring performance because your rating scales may not be the same across categories. If they are, you have the problem of converting scale ratings to a point value.
  • Percentage based measurements. After the individual ratings are assigned, you perform a standard weighted average calculation, giving you a number that accounts for all your variables and is an accurate expression of overall performance.

Get Specific with Your Reviews to Improve Results

Using a weighted average offers a solution to the problems employees often have with performance measurement systems. Many laborers are frustrated by receiving a number that doesn’t tell them where they fall in a performance category. If an average rating is 3, telling employees they had a 2 in the category only expresses that they were below average. It doesn’t let them know how close they were to getting a 3 or if they were closer to a 1.

Weighted averages allow you to give primacy to important business factors, and they allow greater flexibility in the rating scales themselves. Weighing averages will often give you a decimal. If so, there’s no reason to keep your category ratings as whole numbers.

Making the scales continuous allows for improved flexibility in rating and lets your employees know where they stand. A rating of 3.9 says a worker just needs to try a little harder to reach a 4, while a 2.1 conveys the need for a much stronger effort.

Numbers to Grow On

All these factors can, and should, have qualitative values, as well. The most common analogy is the school grading system. A student has a letter grade attached, with plusses and minuses to further define his or her work’s quality. When using any form of rating system, consider similar quality ratings that allow your employees to better understand what their rating means. Put together a quality review that accounts for every aspect of your personnel’s efforts. Find help creating a successful performance review with one of our eBooks.