Resources How-to's Choosing the right method to assess and rate competencies


Choosing the right method to assess and rate competencies

Beyond the fundamental decisions about how to use competencies as part of your employee performance management process (core, leadership, functional, etc.), and which specific competencies are important to your organization/to a department/to a role, as an HR professional, you also need to stop and consider "how" you want managers to assess and rate competencies. There are a variety of approaches and schemes, each bringing its own unique benefits. Deciding which is best for your organization can be a challenge. Here are some general guidelines to help you determine your needs and select an appropriate rating method for your performance appraisal process.

Questions to ask yourself

  • How important is the competency to the role?
  • Do employees across the organization demonstrate the same competency in the same way?
  • How well do employees understand the competency?
  • Is it important for your employees to know specific details on their competency demonstration or need for improvement?
  • Is there a risk that managers will evaluate a competency inconsistently? Is that a problem?
  • How many levels of performance do you need to document? (e.g., pass/fail, 3-levels, 5-levels, etc.)
  • Do you want to force scores to be either better or worse than average?
  • Will you be using competency ratings to drive compensation (pay for performance) strategies?
  • Will you be using competency ratings to drive succession planning?

Choosing a rating scale

Whichever employee rating scheme you choose, you'll need to decide on a rating scale to use. You may be able to use a universal rating scale to evaluate all competencies; however, there are circumstances where you might want or need to use different rating scales for different types of competencies.

The rating scale you use can be as simple as "Demonstrated/Not Demonstrated" or can include several levels of performance "5 - Outstanding; 4 - Exceeds Expectations; 3 - Competent; 2 - Needs Improvement; 1 - Unacceptable". When choosing a rating scale, you need to first think about how you will use the rating information, and then decide how many data points, or what level of granularity you need in your ratings.

  • If you're using competency ratings to drive compensation or succession planning programs, you'll want a large enough scale to be able to differentiate between levels of performance; a 5 point scale is typically effective.
  • If you want to discourage "average" ratings and force either a better or worse than average score, choose a scale with an even number of ratings - 4 or 6; these kinds of scales are preferred by organizations that are results-oriented and that manage a more competitive environment.
  • Some competency models, like Lominger's, use a six point rating scale, reserving the 6th rating level to identify a competency that is overused, to the employee's detriment.
  • If you don't need to differentiate between levels of performance, a simple 2-point rating scale may be sufficient.

Choosing a rating scheme

Short or simple rating scheme

A short or simple rating scheme provides a definition of a competency and invites managers to choose a rating that characterizes the level of performance demonstrated by the employee. Simple rating schemes also sometimes invite managers to provide comments about their rating or the employee's performance. They are typically used for assessing your entire workforce's demonstration of core competencies, or for assessing very specific competencies that an employee either demonstrates or does not.

Although it's important for all rating schemes, with a short rating scheme it's especially critical for you to provide detailed competency descriptions that use language and terminology familiar to your workforce.

eApp Competency Short Rating


  • Quick and easy for managers to fill out.
  • Good for competencies where not everyone needs to demonstrate the same level of performance.
  • Gives everyone a general sense of their level of performance, and gives the organization overall a "pulse" on performance.


  • Doesn't give employees detailed feedback on what they need to improve unless the manager provides detailed comments.
  • May be harder for managers to evaluate in a consistent way since the description tends to be high-level.

Detailed rating scheme

A detailed rating scheme includes not only a general description of a competency, but also descriptions of the various levels of demonstration. Managers rate an employee by choosing the description that best describes their behavior, and can also usually provide additional comments. This rating scheme is ideal for evaluating leadership competencies and functional or role-based competencies.

Competency Long Rating


  • Detailed rating schemes tend to result in more consistent ratings because managers are assessing employees based on specific behavior descriptions.
  • Employees get clear information about how they are performing and can see descriptions of higher levels of performance, so they know what/how to improve.


  • Can make your employee evaluation form very long.
  • Writing the detailed descriptions of the various levels of demonstrations is time consuming.
  • Managers and employees may not read the behavioral descriptions carefully or completely because of "information overload".

Matrix rating scheme

In certain circumstances, to effectively evaluate performance, you need to assess and capture a variety of data, including things like: date observed, frequency of demonstration, method of observation, initials of the person who observed, etc. These criteria are especially important for evaluating clinical competencies in healthcare settings, but can also be important for functions like call centers or manufacturing. Some organizations also choose to have managers first identify the level of performance required for a particular competency, and then rate the employee's performance. In all these cases, a matrix format is the most effective method to rate competencies

Competency Matrix

  • Quick way to gather details of the assessment.
  • Easily handles large number of competencies.
  • Provides managers and employees with lots of detail about performance.


  • Doesn't give employees detailed feedback on what they need to improve unless the manager provides detailed comments.
  • Brief rating key can sometimes lead to mistakes or misinterpretations.

Of course, having a talent management tool that gives you the flexibility to choose the best rating scheme, and even mix and match schemes, is key.

Read how others have harnessed their talent through effective competency management

Swedbank realized in 2001 that it would need to align specific employee skills to the demands of certain customer segments in order to improve customer retention and loyalty. Making the shift from a transaction-based skills model to a relationship-based model would help the bank achieve its business goals but this could only achieve this by re-focusing on competencies. Learn more about how Swedbank sped up competence-to-business.

Success with Talent Management made easy. Experience it for yourself.

Get Started