It's important to recognize that manager ratings reveal more about the manager than the person being rated per the Idiosyncratic Rater Effect. This is why trusting manager ratings or cherry-picked peer 360's alone is not a sufficient way to assess a person's performance; Organizational Network Analsis (ONA) is critical to get a holistic, representative perspective of each person's performance.
Nevertheless, it's important to get the perspective of a manager, even acknowledging these problems, as managers often do have insight into the work of people reporting to them.
With this in mind, you have several options for manager rating scales to use in performance reviews. That said, there are a few clear conventions that research shows are ideal, namely:
Ensure that participants see words (e.g. adjectives) instead of a numeric rating, even if you use numeric ratings to represent these words with your HR team for convenience.
Because of the interpersonal challenges introduced when giving a "low" score, it can be helpful to have more options positioned positively versus negatively to ensure a variety of selections which can help increase your signal-to-noise ratio.
Beyond this, the choice largely depends on your company's culture and objectives.
Common conventions include:
1-5 integers only (e.g. 5 = sets a new standard, 4 = exceeds expectations, 3 = meets expectations, 2 = needs improvement, 1 = unacceptable)
[Confirm's choice] 1-5 with 0.5's (same as above but allows for 4.5, 3.5, 2.5, and 1.5 as options to allow managers to differentiate between team members with greater fidelity, so 9 total options)
1-4 integers only (e.g. 4 = superb, 3 = exceeds expectations, 2 = meets expectations, 1 = needs improvement)
1-3 integers only (e.g. 3 = top performer, 2 = meets expectations, 1 = needs improvement)
Some organizations choose to use a more complicated process, e.g. using multiple criteria, each with their own score, or a forced ranking. However, to keep the process simple for managers but useful to make talent decisions, we recommend one of the above options.
When choosing a rating scale, consider the following:
Align the scale with your company's culture and values.
Ensure that the scale is easy to understand and apply for both managers and employees.
Communicate the purpose and process of the performance review clearly to all stakeholders.
Train managers on how to use the scale fairly and consistently.
Ultimately, the choice of rating scale should support your company's performance management objectives and encourage ongoing feedback, development, and improvement for employees.