What is Absolute Rating?
Absolute Rating is a system of evaluating employee performance in Human Resources in terms of standards and benchmarks, and not in comparison to other employees. In this system, each employee is analyzed on the basis of the expectations outlined, and not on the group performance.
Unlike relative rating systems where employees are ranked, the absolute rating is solely concerned with the individual’s competencies, accomplishments, and contributions.
The aim is to determine the extent to which a given employee fulfills the specified Organizational and job related expectations.
How does Absolute Rating Work in Human Resources?
Typically, in an absolute rating system, managers or evaluators “score” an employee on their ‘performance in the role’ using a scale (for instance, a rating from 1-5). Job role specific criteria such as the following can be used to rate an employee:
– The employee’s output
– Patterns of attendance
– Willingness to work with other people
– Knowledge involved in doing the job
– Use of language
– Use of analysis
– Other relevant rates of action
Independently of the other employees, each individual is rated. This helps Human Resources and managers to concentrate on the employee’s possible strengths and deficiencies without being influenced by colleagues’ performance.
Key Characteristics in an HR Context:
This technique is still the most essential method for managing performance and is different from “Relative Rating” systems (like forced ranking or “rank and yank systems”). Key points include:
- Standardization: Standards are set prior using Behaviorally Anchored Rating Scales (BARS), graphic rating scales, or rating checklists. These are derived from the job description (JD) and organizational goals (OG).
- Self Assessment: Each employee is evaluated independently. Their score is not impacted by the performance of the rest of the employees in the cycle, be it above or below expectations.
- Objectivity: An emphasis is placed on being as objective as possible to bias that comes from relative comparisons. It attempts to answer, “What does an employee need to do to fulfill the requirements of this role?”
- Commonly Used in: Discrete roles and objectives (e.g, sales, and bonus), clear and tangible output (e.g, customer service) or behavioral competencies that are deficit and specific (e.g, production quotas, leadership).
Advantages and Disadvantages from HR Perspective:
HR managers and decision makers appreciate the benefits of this approach and seek to manage its boundaries:
Advantages:
Clarity and Transparency: Employees are aware of the performance standards because boundaries are set.
Developmental Focus:: Employees are made aware of specific areas needing improvement in order to reduce skill gaps so that strategic training plans can be employed.
- Perceived Fairness: Can be seen as fairer than systems that pit employees against each other, as it focuses on individual achievement.
Disadvantages:
- Rater Bias: Can be susceptible to leniency bias (managers rate everyone highly), severity bias (managers are consistently harsh), or central tendency bias (rating everyone as average).
- Lack of Comparative Data: Does not automatically create a clear “top performer” list for succession planning or calibration across departments, as everyone could theoretically receive a high rating.
- Standard Setting: The effectiveness hinges on the quality and relevance of the predefined standards. Poorly defined criteria lead to inaccurate ratings.
Related Terms: Performance Appraisal, Relative Rating, Forced Ranking, BARS (Behaviorally Anchored Rating Scales), Graphic Rating Scale, Performance Management.