Why Rating Goals Doesn’t Work

Remember in grade school when your report cards rated qualities like “plays well with others” and “shares well?” Chances are you hated being rated then, and you likely enjoy it even less now that you’re a fully-grown adult in the working world. Especially when what’s being rated are your goals, and even more so if these subjective ratings have a meaningful impact on your annual performance review.

People have been evaluated on their goals for some time now, thanks to the prevalence of goal-centric management systems like Management by Objective (MBO). But ratings turn goals from high-level aspirations that people are continually working towards into competitive, time-pressed success measures that allow the enormous pressures of performance and bonus numbers to outweigh the many benefits of setting goals.

Comparing Apples and Oranges

Whether you’re rating goals numerically or using qualitative ratings like “performs well” and “underperforms,” it reduces goals — whether they be hard success metrics or soft, behavior-based personal objectives — to impersonal measures you can quantify and rate. It forces equality between disparate goals, whether they be significant, long-term personal improvements or quarterly, performance-based metrics.

In fact, a recent Vanity Fair article claims that “stack ranking,” a goal rating method where employee’s performance is ranked from best performers to poorest performers, is directly to blame for Microsoft’s downfall from its position as captain of the tech industry  to underperforming has-been. According to the piece, stack ranking forces employees to focus on internal competition instead of competing with other companies.

“If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get a mediocre review, and 1 was going to get a terrible review,” a former software developer told Vanity Fair. And every single current and former Microsoft employee interviewed for the piece cited stack ranking as the most destructive process inside Microsoft, the process that forced out droves of employees and irrevocably harmed the company’s ability to innovate.

Rating Goals Amplifies Unwanted Behaviors

“Numeric ratings are one of the most abused components of any measurement and assessment system,” asserts an article about ratings on performance measures from About.com. “They make people angry, destroy fragile working relationships, make one employee judge another, and create an artificial, thoroughly uncomfortable situation for both the rater and the person whose work is being rated.” This is understandable, since the purpose of using a ratings system is to make a comparison between employees in the same or different roles. But since everyone’s goals are, or at least should be, individualized and different, how can you make a fair comparison?

Driving a Wedge Between Managers and Employees

Like other top-down goal setting systems, rating goals also puts goal setting in the hands of the manager instead of the employee, so not only are managers tasked with assigning ratings, but they must also decide which goals are being rated. This undoubtedly causes a significant amount of distrust between the employee and manager, since subjectivity is inevitable when qualitative competencies are being rated.

A Loss of Focus on What’s Really Important

Furthermore, rating goals promotes a “one size fits all” solution where people’s individual objectives are being rated against the same measures, regardless of personal progress and work styles. And since a simple rating is much easier than having to craft a well thought-out review, there is often a long list of goals being rated instead of just the most important goals. Understandably, this is very confusing for the employee. How can you focus on your most important goals if you’re being rated on a long laundry list?

Instead of rating employee goals and creating dread and fear, focus your goal-setting process on building alignment and driving results.