Is There a Place for User Rating Systems in Performance Management?

Is There a Place for User Rating Systems in Performance Management?

A recent article at the Economist described Uber’s user rating system for drivers as a strategy for supplanting traditional performance management, arguing that these ratings “increasingly function to make management cheaper by shifting the burden of monitoring workers to users.” Uber has an interest in ensuring that customers have a consistently good experience and thus is harmed when drivers perform poorly, but instead of devoting resources to monitoring and managing drivers’ performance, it counts on customers to assess it instead. Meanwhile, the platform gives drivers a strong incentive to earn high marks, “aligning the firm’s interests with those of workers,” with the risk of being deactivated if their average rating falls too low.

This type of outsourced performance rating has expanded outside of the gig economy, the author adds, pointing to the ratings and feedback companies increasingly solicit from customers online after they interact with employees, such as in a customer service call.

As the Economist points out, user ratings systems are an attractive method for crowdsourcing the monitoring of employee performance without having to spend the time, money, and effort of having managers do it themselves. And it’s no surprise that organizations are looking for an easy way out. Our own data at CEB, now Gartner, shows that 55 percent of managers believe performance management is too time consuming, and only 4 percent of HR leaders believe their current process accurately assesses performance. With all the effort that has ostensibly been wasted trying to fix performance management, leaving it up to the wisdom of the crowd sure is tempting.

This makes a lot of sense for Uber, which treats its drivers as contractors and will never need them to perform a task other than driving. Customer ratings may be all the performance information Uber needs to decide whether or not to allow a driver to continue working on its platform. With more conventional models of employment, this usually isn’t an option, so most organizations that choose to integrate user ratings into their performance management process must do so more carefully.

In our research, we’ve identified a few performance management strategies that actually have an impact on performance, any of which could potentially be complemented with some form of user rating system:

  • Provide ongoing, not episodic, performance feedback: User rating systems can be an effective way of adding a real-time measure of performance to the feedback employees receive. Regular feedback from a manager is still needed, however, to help employees diagnose any changes in ratings and identify ways to improve.
  • Include performance feedback from peers, not just managers: While many organizations incorporate 360-degree feedback in their performance reviews, it can be difficult to assess the performance of one’s peers over the span of weeks or months. The technology behind a user rating system can also work as an internal ratings systems, with peers giving instant, documented feedback on a task or project basis, rather than at most a few times per year.
  • Make performance reviews forward looking, not backward looking: Understanding the ability of employees to meet future business needs is critical for developing employees and placing them in the right roles at the right times. A standard user satisfaction rating only captures past performance, but adapting a user ratings system to ask questions about specific behaviors or abilities could be a useful method for building a profile of employee skills. While a whole battery of questions would discourage anyone from actually using the ratings system, the beauty of crowdsourcing means that asking each reviewer a different question will still quickly build a usable data set.

For any organization, keeping in mind the goals of the performance management process is critical. A company like Uber, which above all else needs to satisfy its customers and keep them using its service, can rely heavily on a performance management system that only assesses customer satisfaction. But for organizations whose employees have multiple critical objectives, such as driving growth, enhancing the effectiveness of their colleagues, and behaving ethically, such ratings should be only one of several sources of data evaluated in the performance management process.