Revamping the Performance Management System – Transition to a 3-Point Rating Scale

Simplified and sharpened the performance assessment framework by moving from a 4-point to a 3-point rating scale, enhancing clarity, fairness, and developmental focus

Time to Read: 4 mins

Background

The earlier 4-point performance rating scale at Mahindra Susten Pvt Ltd part of Mahindra & Mahindra Group, posed significant challenges:

  • Confusion around rating interpretations.
  • Rating inflation due to “safe middle” choices.
  • Lack of sharp differentiation between good and excellent performance.
  • Limited linkage between ratings and development or reward outcomes.

In an environment where performance needed to be tightly aligned to business results and employee growth, a change was imperative.

Objective

To redesign the Performance Management System (PMS) into a simpler, fairer, and business-aligned model that could:

  • Remove rating ambiguities.
  • Enhance manager accountability.
  • Tighten the link between performance and rewards.
  • Foster a culture of feedback and growth.

Actions Taken

  1. Structural Shift to 3-Point Scale:
    • Moved from a 4-point to a 3-point rating scale:
      • Exceeds Expectations
      • Meets Expectations
      • Below Expectations
    • Eliminated “grey areas” where managers previously rated employees as “slightly exceeds” or “almost meets.”
  2. Redefined Performance Philosophy:
    • Shifted focus from annual event-based ratings to continuous feedback.
    • Re-emphasized goal clarity, regular check-ins, and developmental conversations.
  3. Manager Training:
    • Conducted manager enablement sessions on objective assessment, differentiation practices, and feedback coaching.
    • Provided toolkits, calibration guides, and FAQs to ensure consistency across departments.
  4. System and Process Alignment:
    • Updated PeopleSoft modules and internal HR platforms to reflect the new scale.
    • Integrated the 3-point rating system with rewards, promotions, and learning interventions.
  5. Change Management Communication:
    • Ran a robust communication campaign explaining the “why” behind the change to employees and leadership teams.
    • Used townhalls, newsletters, and leadership videos to drive adoption.

Results

  • Rating Clarity: Increased manager confidence and objectivity in rating discussions.
  • Performance Differentiation: Greater spread across top, middle, and lower-performing talent.
  • Talent Decisions: Improved linkage of performance ratings to career development and compensation decisions.
  • Cultural Shift: Strengthened the organization’s culture of transparency, fairness, and continuous development.

Recognition:
This initiative received positive feedback across leadership teams and HR forums, positioning Mahindra Susten PMS program as future-ready and employee-centric in the domain of Solar Industry

"In performance management, simplicity isn’t a compromise, it’s clarity in action. Clear expectations empower great outcomes."

👉  Ready to move beyond complicated rating systems? Let’s build a performance culture where simplicity drives excellence., Connect with us or click here

Leave a comment