In my opinion, 3 point scale will not do the justice to the performance Management system. Besides experiencing a central tendency , the 3 point scale will also restrict the ability of the organisation to differentiate between the best, better, average and poor performers and does not provide a legroom to deal with non performance.

affluenthr

There will always be a 'local wisdom' in operation. This wisdom will have both 'signal' and 'noise'. To differentiate, you would need to understand why is it that your co. is planning to move to a 3 point scale, from an already existing 5 point one? What benefit does it see over the five point system? Is it really a system problem (fix the rating scale and all will be fine)? Find out if the problem is the action arising out of the instrument? Is differentiating between people becoming the sole responsibility of the system?

To me, the next 75% band is too large. The persons at the top end of the 75% band and at the bottom end of the 75% band are different and there is a danger of equating them. There is also a danger that the organisation would keep tweaking the system for answers when the issues really lie elsewhere.

You will cramp yourself with a 3 point scale.

All the best to you...

The five point system works well from Indian Context.....People grade the employees in the grade as under:

9 and above: Excellent... rare cases....Less than 15% .

7, 8 ..Very Good... 20%

5,6   Good......20 %

3, 4.... Avg... Needs improvement......30-40 %

1,2 ... Poor.....around 10 to 15%.......Need closer Review ..may be every quarter

We can still identify those performing at grades of 1 and 2, and take a call on such employees

Regards...E Sivaraman