How many Performance Management levels? Contentious performance levels eat away at individuals motivation.

We find that there is one grumble that arises again and again in organisations concerning the quantity of their performance measurement levels; there are never the right number of them!  Where there are three performance levels, staff will bemoan the lack of scale and argue that there is insufficient differentiation.  Systems with four measurement levels come under attack simply because they fail to provide a middle position for all those very 'middle' folk that work there.  Then there are those heady systems that differentiate with five performance levels that all get knocked because it's just too hard to decide whether someone is a 3 or a 4, or a 4 or a 5, or a 1 or a 2... You get the point!   

It seems as though many believe that the grass is always greener on the other side of the performance management fence.  We've recently been convinced that the problem is actually a different one that has nothing to do with the number of measures/levels within the performance management process. Instead we are finding that the problem frequently lies within the managers who are endeavouring to use the performance scale in the real world and have nothing concrete upon which to base their decisions.  

It's a problem that has two parts: part 1 is related to the quality of the objectives that were set in the first place (we talk about this elsewhere), and part 2; no understanding of how to apply a balance between the letter of the law and use of their professional discretion.  

Whatever scale you are using, it is in our opinion vital that the level descriptors leave no room for interpretation. They need to be worded such that there is no doubt as to when they apply.  So for example a level entitled 'Good' needs to be indisputably clear about what good means.   So the descriptor might read "Met all objectives set". Meaning of course ALL objectives must have been met to acquire the level entitled "Good".  That may be clear, but will inevitably throw up the question (almost every time) "So what if Bob just missed achieving one of his objectives by a sniff, does that mean I have to mark him down a level?".  

Well according to the letter of the law, yes Bob missed the 'Good' level by a sniff.  One might argue he needs to try a little harder next time, but surely there should be some room for the manager to use professional discretion and make a call on Bob's performance level, maybe over-ruling and awarding 'Good' based upon the other results, or things that he Bob did during the assessment year.  

In practice that's often what happens; the challenge however is in calibrating the level of discretion to be exercised within the organisation by the managers.  A very real danger exists that the letter of the law becomes meaningless (discrediting the performance management process) and managers gradually migrate to using almost total discretion when assigning performance levels to staff.  Inconsistency across the organisation grows and further discredit sticks to the performance management system employed.  

So here's what we think is needed:

1. Very clear descriptors for whatever number of levels your system has (by the way we do like 5). Descriptors that leave no room for manoeuvre. If you like, a clear letter of the law.  
2. Managers trained to use their professional discretion in assigning those levels to staff, in the knowledge that the further they stray from the letter of the law, the more they will be required to thoroughly justify that position. 

In a good performance management system the letter of the law does exist in union with the spirit of the law.  The letter serves to provide the datum, or point from which you can apply a level of discretion.  Without this the manager is only able to apply discretion, resulting in total inconstancy of level assignment from one manager to another.  The datum is like a stick in the ground that provides the starting point, the further a manager strays from that starting point, the stronger their argument needs to be.   

So, don't be too worried about the number of levels, instead train your managers to understand exactly what performance is associated with each of the descriptors, articulate this in your documentation in as clear way as possible. Give your managers the datum they need to enable consistent assessment. Then teach them to use their professional discretion, on the basis of clearly justifying any move away from the absolute of the descriptor. 

Download a pdf of this blog here:  www.imanageperformance.com/ithink.html

Bob Bannister