Performance rating is the step in the work measurement in which the analyst observes the worker's performance and records a value representing that performance relative to the analyst's concept of standard performance.[1]
Performance rating helps people do their jobs better, identifies training and education needs, assigns people to work they can excel in, and maintains fairness in salaries, benefits, promotion, hiring, and firing. Most workers want to know how they are doing on the job. Workers need performance feedback to work effectively. Accessing an employee timely, accurate, constructive feedback is key to effective performance.[2] Motivational strategies such as goal setting depend upon regular performance updates. While there are many sources of error with performance ratings, error can be reduced through rater training and through the use of behaviorally anchored rating scales. In industrial and organizational psychology such scales are used to clearly define the behaviors that constitute poor, average, and superior performance.
There are several methods of performance rating. The simplest and most common method is based on speed or pace. Dexterity and effectiveness are also important considerations when assessing performance. Standard performance is denoted as 100.[3] A performance rating greater than 100 means the worker's performance is more than standard, and less than 100 means the worker's performance is less than standard. It is important to note that standard performance is not necessarily the performance level expected of workers, the term standard can be misleading. For example, a standard performance rating of a worker walking is 4.5 miles/hour. The ratings is used in conjunction with a timing study to level out actual time (observed time) taken by the worker under observation. This leads to a basic minute value (observed time/100*rating). This balances out fast and slow workers to get to a standard/average time. Standard at a 100 is not a percentage, it simply makes the calculations easier. Most companies that set targets using work study methods will set it at a level of around 85, not 100.