Although workplaces are rapidly changing, traditional employee ranking metrics are stubbornly persisting. These ratings, such as “meets expectations” or “performed well,” don’t really tell managers anything about their workforces and harm employee morale, but companies seem unsure of what to do without them. For example, Intel has traditionally ranked its employees on a four-level scale, ranging from “outstanding” to “improvement required.” According to Devra Johnson, a human resources director for the company, about 70 percent of the company’s workforce receives a “successful” rating every year—the second-lowest rank. This saps morale levels, and isn’t nuanced enough to give management a clear picture of an individual employee’s performance. As part of an experiment, the company allowed 1,700 of its workers to forgo the traditional evaluation process for two years. While managers found they could still identify their team’s top performers and fairly distribute compensation, the company wasn’t ready to give up the old system, saying it feared forsaking the rating system because that could remove a healthy tension from the workplace. “We don’t want to be in a place where everyone’s an outstanding,” Johnson said. “We worry a lot, as we should, about unintended consequences. You make a little tweak in an innocuous place—you don’t know, sometimes, the impact it might have.”
Employee Evaluations – Not Hugely Helpful, But What’s the Alternative?