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HR industry expert shares insight on Performance Appraisal Ratings

Wednesday, 01 June, 2016

Human Resources professionals recently gained valuable insight regarding performance appraisal ratings and managing the distribution curve of ratings at an event held at University of Wollongong in Dubai (UOWD). Dr Robert Moseley, Global Remuneration Expert and former Senior Vice President of HR at Emirates Group, provided the audience with in-depth knowledge on the current market trend on annual performance appraisals, which remains a headache for many human resources managers.

The event organised jointly by The Human Resources Forum (THRF) and UOWD, was attended by more than 50 delegates from the HR industry. Dr Moseley explained the various rating scales, highlighting the advantages and disadvantages of each and also provided a clear understanding of the specific wording and language that should be used in the rating scales, focussing on meeting/not meeting expectations.

Rumours that a number of global companies are abandoning annual performance appraisals were dismissed by Dr Moseley. He commented that those companies were in fact more focussed on appraisals than ever before but that they have changed their approach by incorporating monthly progress meetings with their employees, building up to the annual appraisal. He said that 7% of companies in the region conduct full appraisals but don’t convert it into ratings. There are a number of advantages of having a rating scale which includes summing up judgements which are not lost in too many words, it is an essential basis for performance related pay and it is also a key tool to identify exceptional performances. Currently the 6-point rating scale, introduced in the 2010’s, are being used by around 25% of the companies in the GCC and works exceptionally well in this region. The 5-point rating scale, introduced in the 1990’s remains the most commonly used scale but he advises that companies should rather migrate to the 6-point scale or explore the new 5-point scale which will come into play in the next few years.

Dr Moseley also discussed the term “snap-ratio” and how to use it to manage the distribution curve of performance ratings. Snap-ratio is a calculation to determine the ratio between employees scoring low and those scoring high in order to establish whether ratings have been applied correctly and in acceptable proportion. A score of   3.5 is desirable where a score below 2 and higher than 4.0 indicates there might be a problem and “force distribution” should be considered. Dr Moseley said: “forced distribution is one of the hardest decisions a company needs to make and are imposed when managers become too lenient in terms of rating their staff”. In the GCC 72% of companies avoid implementing forced distribution. Forced distribution means that only a certain percentage of all employees can be rated on the different scores hence forcing scores to be in acceptable proportion to one another.

UOWD hosts regular seminars, on various HR topics, organised by THRF.

To find out more visit http://thrf.ae or contact Dr Alison Thirlwall at alisonthirlwall@uowdubai.ac.ae.

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