Here’s why comparing an organization’s 5-level rating scale to the A-B-C-D-F grading system used in schools is wrong. A school district can’t exercise any selectivity in choosing its students. They can’t choose to accept some kids (the smart ones, for example) and reject others (the dull ones). The school has to accept every kid who lives in the school district.  

Organizations aren’t like that. They don’t hire people at random — every tenth applicant, for example. And they don’t promote people at random. They hire and promote the best talent they can find. Companies exercise a great deal of selectivity. So a middle rating in the performance appraisal system of a company with tough and demanding standards isn’t comparable to being a C student in school.  

If you want a good analogy for what a middle rating represents, think about shooting par in golf. Par doesn’t mean perfect. Par also doesn’t mean average or mediocre or middle-of-the-road, run-of-the-mill. What par represents is the play that’s expected of an expert. A pro golfer can often do better, but par represents expert play. The same thing is true in companies — the middle rating represents the performance and behavior of an expert.

About the Author

Dick Grote is one of America’s most successful and best-known authors, consultants, and business keynote speakers on employee performance management consulting. He is the Chairman and CEO of Grote Consulting Corporation – www.GroteConsulting.com.

There are other reasons for doing performance appraisal. If it’s done right, performance appraisals tell us who’s a good candidate for promotion and who’s properly placed in their current job (and who’s in over his head…). They tell us where we need to intensify our development efforts. And the truth is, performance appraisal tells us who the people are who’d be better off working somewhere else. The standards and expectations of some companies are just too high for some people to meet, and performance appraisal identifies who those misplaced folks are.  

But all those reasons are secondary. The real reason organizations have a performance appraisal system is to fulfill an ethical obligation.  

Here’s what I mean. Every person who works for an organization wants the answer to two questions: (1) What do you expect of me? and (2) How am I doing at meeting your expectations?  

We answer the first question, What do you expect of me, at the start of the year when we talk about goals and projects and key job responsibilities. We answer the second question, How am I doing, at performance appraisal time.  

We’ve got an ethical obligation to let people know where they stand. Performance appraisal is the formal, structured process that allows us to meet that responsibility.

About the Author

Dick Grote has been a management consultant for almost thirty years, specializing exclusively in the field of employee performance appraisal and management. As a consultant, he has created employee performance management systems for several hundred of the world’s best known and most respected companies, including Texas Instruments, JCPenney, Miller Brewing Company, American Airlines, Macy’s, Raytheon, Burlington Northern Santa Fe Railroad, and Herman Miller. His company, Grote Consulting, specializes in employee performance appraisal, employee improvement and talent management.