Should I create my own rating system to help differentiate low and average performers?
In response to companywide survey, my company decided to eliminate ratings as part of the performance review process. Instead, everyone will receive a yearend performance review without the rating and get a peanut butter spread merit increase. There are some (high performers) that we can nominate for an adder, so there is somewhat of a rating system. I really feel the company is doing a disservice to the managers with their low and average performers as the incentive is now gone.
Opinion – I believe the negative survey results had a lot more to do with low merit increase that accompanied the rating, not so much the rating itself.
I appreciate any thoughts on the subject.
As HR often says, "it depends".
Yes, if this would enable you to manage performance issues, e.g. get HR approval for a formal "performance improvement plan" for your designated "low" performer. I suppose if you're clcose with HR and they'd see your system as a good thing, you could use it for this. But if your relationship with whomever owns the termination process is lacking, your system could be seen as resisting the company's strategy. Worse, you inventing a way to label people "low" could be suspicious to the cynical HR types, thus hurting support for your recommendations on performance mgmt.
No, if you only would foresee using these terms with your team, thus risking trust considering their manager's going out of his way/against company guidance to label them as "low".
In my opinion, if I understand you, you no longer have compensation decisions to make between low/average performers. Thus the value of a formal rating lessens--no need to bucket performers since the category no longer implies a decision (compensation, promotion, etc.). From the MT perspective, you'd still be using feedback to distinguish low/average performers, thus tie that to their promotion readiness status, or give that input to others when you get asked how they're doing.
Tough to comment more without knowing your company size and how info about performance is shared/used, but I appreciate the question.
Have a great day,