Following a pilot program involving 30,000 workers, GE said that their staff found a performance review system “without a rating was more motivating, and managers told us they were still able to make talent decisions”.
In fact, there are multiple flaws with performance ratings, said Kris Duggan, CEO of BetterWorks.
“I think people don’t like being turned into a number,” he told L&D Professional
Duggan added that he was recently talking to people who said their company gives them a rating, but they didn’t even know what the rating was based on.
Moreover, they didn’t know how to improve their rating and they said it was only the recent things they had done which they were being judged on.
“It wasn’t a full view on their entire period of time and they didn’t know how a rating in one department compared to a rating in a different department. It was just completely confusing to them,” said Duggan.
“I think it’s alright to give quantitative feedback to people, but to turn everything that they have done (their contribution, their goals, how they demonstrated the values of the company, how they are supporting people in the company, etc) into one number is a demoralising thing.”
Duggan said that there is only a downside in giving ratings to people. For example, let’s say you have got a five-point scale: three is ‘meets expectations’, four is ‘exceeds expectations’ and five is ‘consistently exceeds expectations’.
“When you tell the threes that they are threes, they actually think they are fours. So you have upset all the threes,” said Duggan.
“When you tell the fours that they are fours, they think they are fives. So you have just upset all the fours.
“And when you tell the fives that they are fives, they already know they are fives. So there are only downsides by trying to distil this all into one number.”
How performance feedback is evolving
General Electric Co. has become the latest major employer to get rid of performance ratings.